COST SHEET – PARLE G BISCUITS INDIA

PARTICULARS amount amount

RAW MATERIALS CONSUMED
1. Wheat flour
2. Sugar
3. Partially hydrogenated edible vegetable oils
4. Invert syrup
5. Leavening agents (503 Baking powder)
6. Milk
7. solids Salt Emulsifiers (E 322 or E 471 or E 481) Dough
conditioners (E 223)

DEDUCT (WASTAGE OF MATERIAL)*

DIRECT WAGES (LABOUR)

1. Machine tool operator
2. Assembler
3. Machine polisher
4. Equipment operators

DIRECT CHARGES *

PRIME COST (1) ***

Add :- FACTORY OVER HEADS:
 Factory Rent
 Factory Power
 Laboratory expenses
 Indirect Material
 Indirect Wages include storekeepers
wages .The inventory of the company that is
the raw material is of a week is kept in the
store room
 Supervisor Salary
 Drawing Office Salary
 Factory Insurance
 Factory Asset Depreciation on following
machines
• Stephan mixture
• Rotary moulder
• Oven
• Cooling conveyor
• Counting unit
• Stalking table
• Auto feeding machine
WORKS COST INCURRED ***
Add: Opening Stock of WIP
Less: Closing Stock of WIP
Works cost (2) ***
Add:- ADMINISTRATION OVER HEADS:-
Stockiest salary*
Office Rent
General Charges
Audit Fees
Bank Charges
Counting house Salary
Other Office Expenses
COST OF PRODUCTION (3) ***
Add: Opening stock of Finished Goods
Less: Closing stock of Finished Goods
COST OF GOODS SOLD ***
Add:- SELLING AND DISTRIBUTION OVERHEADS*:-
1. Packaging
2. Advertising
3. Sales commission
4. Carriage outward
5. Sales Tax
6. Bad Debts
COST OF SALES (5) ***
PROFIT (BALANCING FIGURE) ***
SALES ***
 NOTES
*There are two type of wastage in factory. First is the waste materials fallen on
ground. Such waste material is of 1% which is marginal and acceptable which goes
into total waste. Second types of waste are the biscuit collected in tray of the multi-
pack wrapping machine, since these biscuit are broken they are not packed and sold
to the customer but collected in other tray and sold as broken pieces and sold for less
price for cattle feeding. Will deduct these wastes from the raw material consumed.

 * cost of manufacturing limited edition Parle Milano manufactured by trained

experts in Australia.

 Stockiest salary-a person responsible for distribution of parle g in rural areas

SELLING AND DISTRIBUTION EXPENSES

1. Packaging: The cost of the outer covering of biscuits i.e. the poly bags in which
they are packed is a selling and distribution cost. The colorful and attractive
packaging is to promote sales. Also the packaging helps in easy distribution of
biscuits without damaging them. The cost of labeling is a part of the packaging
cost only.

2. Advertising: Expenses to advertise the biscuits on hoardings, T.V. and radio are
selling and distribution costs. The biscuits industry is highly competitive and
advertising is of much importance to boast sales. Expenses for promotion
activities, like sponsoring local events, or special events to attract customers also
come under advertising expenses.

3. Sales commission: As a part of encouragement for sales people , they are given a
percentage of total sales done them as sales commission. This is to promote sales
and is therefore classified as selling and distribution cost. PARLE G for instance,
gives 5% of the total sales done by the sales people as sales commission.

4. Loose biscuits: On the stalking table one to two rows of baked biscuits are kept
aside for selling it as loose biscuits. They are normally assumed to be damaged
biscuits but they are not damaged or broken but company keep such loose packets
of biscuits to sell it to the local people for marginal rate of Rs. 33 / kg. Sometimes
these can also be distributed as free samples as a part of introductory schemes or
simply for tasting. All these initiatives are to promote the sales and hence fall
under selling and distribution costs.

5. Carriage outward: Mostly the factories making biscuits are located on the
outskirts of the city. The transportation cost to make these finished goods
available to wholesalers and retailers for sale to the final consumer is a part of its
selling and distribution cost. The carriage outward for PARLE G biscuits for
instance is Rs.0.12798 per unit.