North south University

Course: ACT-202
Course instructor: Mr. Shahidullah (Slh)
Section: 20

Submitted by
Name Id
Syed salman Rahman 1410729030
Farhana Sharmin Amy 1410014630
Jannatul Ferdushi 1331014630
Md. Muhaiminul Islam 1411043630
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 Table of Content

Serial no. Name of the topic Page no.

1 Letter of submission 4
2 Acknowledgement 5
3 Executive summary 6
4 Product details 7-8
5 Production process 9
6 Determining the cost of the product 9
7 Costing method 9
8 Profit margin 9
9 Contribution margin 9
10 Break-even point units 10
11 Breakeven revenue 10
12 Feedback 10
13 Appendix 11

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 Letter of Submission

3rd August, 2016

Mr. Shahidullah

Instructor, Accounting

Lecturer School of Business North South

North South University,

Dhaka-1213

Subject: Submission of ACT- 202 group assignment

Respected Sir,

It is being a great pleasure for us to submit this project on determining the cost of the product of a
small business. This report has been prepared by a group of 4 people as a part of this course. We have
tried our best to implement our learning from this course. It is prepared after doing some research and
gathering information. We tried to include all the required information in this report. which we were
assigned. It was a great opportunity for us to acquire knowledge and experience in respect of the
functions, procedures and operation activity, other than my topic of study.

We have concentrated our best efforts to achieve the objectives of the assignment study and hope our
endeavor will serve the purpose

Sincerely yours,

Syed salman Rahman

Farhana Sharmin Amy

Jannatul Ferdushi
Md. Muhaiminul Islam

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 Acknowledgement
This report is made possible through the help and support from everyone, including: parents,
teachers, family, friends, and the Almighty Allah.

We would like to take this opportunity to express our profound gratitude and deep regard to Mr.
Shahidullah for the chance to do this project. We would also like to thank him for his exemplary
guidance, patience, motivation, and immense knowledge. Working under him was an extremely
knowledgeable experience for us. We would also like to thank our group mates for their support
and hard work throughout his project.

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 Executive summary
We have chosen a fuchka cart named Ruhul Amin fuchka for preparing its production process and
it’s daily selling process. We have gathered all information and activities starting from its
production process till its process of selling to its customer. We tried our best to gather knowledge
on how Ruhul Amin operates his production and selling process so that we may get the most
accurate type of information in preparing ruhul Amin’s business process.
In this report we discuss about direct materials, direct labor & MOH.Ruhul Amin using process
costing method. We also calculate profit margin, contribution margin, break-even point units,
break even revenue of his daily business process.

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PRODUCT DETAILS:
 Amin selling his product is fuchka [main product fuchka and ghugni]
 The ingredients which he needs and the cost of the ingredients are given below: [this
information are for his one-day production]

Product name Quantity Unit price Total price

Flour 5 kg 30 150tk

soybean 4ltr 90 360tk

Dabli 3 kg 50 150tk

Onion 1 kg 20 20tk

Green chili ½ kg 20 10tk

Red chili 1/10 kg 50 5tk

salt ½ kg 30 15tk

Total raw
material cost of = 710tk
main product:

 These ingredients needed for the main product of fuchka called fuchka and ghugni

Side products:

Product name Quantity Unit price Total price

Tamarind 1/10 150tk 15tk

sugar 2/10 50tk 10tk

spices 1 packet 50tk 50tk

Total raw = 75tk
materials side
products

These are the total direct material cost of Ruhul Amin’s fuchkas.
He made 600 fuchka per day using this material. He sells 60 plate fuchka every day and he serve

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10 fuchka in a plate. Now we are going to calculate single plate fuchka cost is given below:

Product name Quantity of plate Quantity of per plate Total amount of per
fuchka plate fuchka
Flour 1 10 2.5 (150/60)
Soybean 1 10 6 (360/60)
Dabli 1 10 2.5 (150/60)
Onion 1 10 0.35 (20/60)
Green chili 1 10 0.17 (10/60)
Red chili 1 10 0.09 (5/60)
Salt 1 10 0.25 (15/60)
Tamarind 1 10 0.25 (15/60)
Sugar 1 10 0.17 (10/60)
Spices 1 10 0.83 (50/60)
Total 13.11

 Direct Labor: He himself is the owner, seller, and labor of his business.

 MOH cost:

Variable cost:
Product name Amount

Washing and cleaning cost 20tk

Total 20tk

Fixed cost:

Product name Amount

Stand 70
Bowl 130
Transportation cost 20
Total 220

Total MOH cost are (20+220) =240

Now, per plate MOH cost is
Total MOH cost/total sells plate
= 240/60
=4 taka

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PRODUCTION PROCESS:

1. At first he makes the fuchka. which he makes by mixing the flour, salt and some spices
and frying them on the soybean oil for five minutes.
2. Then he makes ghugni by mixing the dabli, onion, red chili, green chili, salt and the
other spices.
3. Then he makes the tok by mixing water, tamarind, sugar and spices.

 Then in the time of selling he poured the fuchkas with the ghugni and give it to the
customers with a cup of tok.

DETERMINIG THE COST OF THE PRODUCT:

Direct material = 13.11
Direct labor = 0
MOH = 4
Total cost of per plate fuchka = 13.11+4
=17.11
This is the cost of one plate fuchka.

COSTING METHOD:
The fuchka dokan is using the costing method called Process costing method.
Process costing method is a method in which a single product is produced either on a continuous
basis or for a long period of time. In this costing method one single product which is
indistinguishable produced by the company or by the firm and it is sold to the customers.
Processing cost is used when nearly identical units are mass produced.
In the Fuchka dokan one single product called fuchka is made by the dokan and it is sold to the
customers. All of the production process is dedicated to make one complete product which is mass
produced called fuchka and for the costing a single product is used.

PROFIT MARGIN:
Ruhul Amin mama sells each plate fuchka by 25 taka
So his profit margin is 25-17.11=7.89

CONTRIBUTION MARGIN:
(Sales per unit – variable cost per unit)
= 25 – (13.11+0.33)
= (25-13.44)
=11.56
*[we calculatedly variable cost per units by adding material cost 13.11 with variable cost per unit
0.33]

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BREAK EVEN POINT UNITS:

 Unit contribution margin: 11.56 taka

 Fixed expenses:220 taka
Now,
(Fixed expense/unit contribution margin)
= (220/11.56)
= 19.03

 To calculate breakeven point, we need to divide fixed expenses with unit contribution
margin.to get unit contribution margin. Our Fixed expenses is 220 and our Unit
contribution margin is 11.56. that’s how we calculated our breakeven point per unit which
is 19.03.

BREAK EVEN REVENUE:

 {Total fixed cost/ (variable cost per plate/prices per plate)}

= {220/ (13.44/25)}
= (220/0.43)
=511.63

 To calculate break even revenue, we have to divide total fixed cost by the results that we
will get dividing variable cost per plate by price per plate. So here our fixed cost is 220-
taka variable cost per plate is 13.44 taka and price per plate is 25 takas.

FEEDBACK:

In this assignment we worked for a daily production and selling process of Ruhul Amin’s fuchkas
usually sells his product in the street of narda, boshundhara main gate and vatara bazar. We meet
with him before complete this report and gather some information from him. Based on his
information we complete our report and also we find something that can help him for his business
welfare. We provide some feedback given below which can be help him to be more attractive
towards their customers:

 We noticed that the plates and spoons which is needed to serve the fuchkas is look dirty.
Which is unhygienic for health.so that some of the customers are not willing to buy his
fuchkas.so he has to concern about that and he have to take a step to keep neat and clean
his tools.
 Ruhul Amin also should be concern for his fuchka’s materials. We have seen that one of
his materials called ‘ghugni’ was not cover up properly. For that dust and other insects fall
on it. It’s also unhygienic for health. So he had better to keep it cover up carefully.
 Making his fuchka he has lack of his materials to prepare his fuchka to customer. Making
his fuchka he used ghugni, dabli, chili, tok, slice of onions and green chili. Which is not
enough materials to make a proper fuchka for nowadays challenging market.so Ruhul
Amin should add some materials like egg, mixed salad etc. Using more material, it could
help to be more attractive towards customer.
 Ruhul Amin needs to be more concerned about his platers of fuchka. He doesn’t provide

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 enough fuchka in one plate according to his price. So for getting more customer in this
challenging market he needs to be more concern for it.
 Ruhul Amin sells his fuchka in various place.so we think he could not get his daily target
customer. For our personal perspective if he sells his fuchka in front of school or college
he will get his desired customer.
 In this present world people more conscious about their health.so people are not willing to
take street food though fuchka is the delicious food which is favorite to maximum people.
For wellbeing of his customer he should concern of making fuchka. He should wear gloves
and making his fuchka very carefully.

APPENDIX:

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