Studied about the Amul Ice Cream Company situated in India and analyzed its cost sheet on the basis of various aspects to answer some of the most important questions pertaining to its manufacturing costs and cost sheet.

1. Numerical Case Study
On
“Cost Accounting”
By
Aditya Purohit
(BBA 2nd Year)
106/10 civil lines,
Ajmer 305001
Website: www.dezyneecole.com
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2. Page 2
Contents
Introduction of Amul ice cream company……………….…… 3
What is cost sheet……………………………………………... 4
Objectives of cost sheet………………………………………..5
Format of cost sheet…………………………………………… 6
Cost sheet of Amul ice cream…...……………………………..12
Analysis of cost sheet………………………………………….14
Conclusion……………………………………………………..15

3. INTRODUCTON OF AMUL ICE CREAM COMPANY
Amul Ice Cream was launched on 10th March, 1996 in Gujarat. The portfolio
consisted of impulse products like sticks, cones, cups as well as take home packs
and institutional/catering packs. Amul ice cream was launched on the platform of
‘Real Milk. Real Ice Cream’ given that it is a milk company and the
wholesomeness of its products gives it a competitive advantage.
In 1997, Amul ice creams entered Mumbai followed by Chennai in 1998 and
Kolkata and Delhi in 2002. Nationally it was rolled out across the country in
1999.
It has combated competition like Walls, Mother Dairy and achieved the No 1
position in the country. This position was achieved in 2001 and it has continued to
remain at the top.
Today the market share of Amul ice cream is 38% share against the 9% market
share of HLL, thus making it 4 times larger than its closest competitor.
Not only has it grown at a phenomenal rate but has added a vast variety of flavours
to its ever growing range. Currently it offers a selection of 220 products. Amul has
always brought newness in its products and the same applies for ice creams.
In January 2007, Amul introduced SUGAR FREE & ProLife Probiotic
Wellness Ice Cream, which was a first in India. This range of SUGAR FREE,
LOW FAT Diabetic Delight & ProLife Probiotic Wellness Ice Cream is created for
the health conscious.
Amul’s entry into ice creams is regarded as successful due to the large market
share it was able to capture within a short period of time – due to price differential,
quality of products and of course the brand name.
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4. What is Cost?
Cost means ‘the amount of expenditure (actual or notional)
incurred on or attributable to a given thing.’
What is Cost Sheet?
“The system of cost accounting in which costs are determined
per unit of a single product in a continuous manufacturing
activity is known as Cost Sheet”
The per unit cost can be arrived at after dividing the total
expenditure by the quantity produced. A statement of cost or a
cost sheet is made out which throws light on every aspect of
cost.
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5. Objectives of Cost sheet
The main objectives of Cost Sheet are as follows:-
• To Find total cost and per unit cost.
• To analyze the expenses incurred on the cost unit.
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• Comparative analysis.
• To find the proportion of each element of cost in the total cost.
• Basis for determining selling price.

6. Format of detailed Cost Sheet
(Cost Sheet of…………….For the period……………)
Output……………. Units Unit………….
Particulars Total
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Cost
Rs.
Cost per
Unit
Rs.
Rs.
Direct Material Consumed :
Opening Stock of Material ……… ………
Add: Purchases ……… ………
Carriage Inward ……… ………
Custom Duty and Octori ……… ………
Dock Charges ……… ………
Freight Inward ……… ………
Primary Packaging Material ……… ………
……… ………
Less: Closing Stock of Material ……… ………
Direct Wages
Royalty on Production ………
Other Direct Expenses/Chargeable Expenses ………

7. Page 7
PRIME COST
………
………
Add: Factory Overheads :
Factory, Rent, Rates and insurance ………
Factory Lighting ………
Factory Supervision ………
Drawing Office Salaries ………
Motive Power ………
Fuel & Oil ………
Grease, Water etc. ………
Steam ………
Welfare Expenses ………
Laboratory Expenses ………
Depreciation of Plant & Machinery ………
Depreciation of Factory Building ………
Repair & Maintenance of Factory ………
Indirect Wages ………
Technical Director’s fees ………
Haulage ………

8. Loose Tools Written-off ………
Material Storage Expenses ………
Material Handling Charges ………
Factory Stationery ………
Works-Manager’s Salary ………
Works Clerical Staff’s Salary ………
Supervisor’s Salary ………
Storekeeper’s Salary ………
Service Department’s Expenses ………
Factory Cleaning ………
All Other Factory Expenses ……… ………
Add: Opening Work-in-Progress ………
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………
Less: Closing Work-in-Progress ……… ………
FACTORY COST/WORKS COST ………
Add: Office Overheads: ………
Office Rent, Rates & Taxes ………
Staff Salaries ………
Office Lighting ………
Office Cleaning ………

9. Printing & Stationery ………
Postage & Telegram ………
Office Conveyance ………
Depreciation of Office Bldg & Furniture ………
All Expenses of Directors ………
Depreciation on Office Equipments ………
Office Repairs ………
Sundry Expenses ………
General Expenses ………
Legal Expenses ………
Audit Fees ………
Bank Charges ………
Total Office Overhead ………
COST OF PRODUCTION/COST OF
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OUTPUT
………
Add: Opening Stock of Finished Goods ………
………
Less: Closing Stock of Finished Goods ………
COST OF FINISHED GOODS SOLD ………
Add: Selling Overheads:

10. Advertisement ………
Show Room Expenses ………
Travelling expenses ………
Commission on Sales ………
Salesman Salaries ………
Expenses on Market Research ………
Bad Debts (If treated part of Cost) ………
Sample and Gifts ………
Counting House Salaries ………
Service Expenses ………
Demonstration Expenses ………
Packaging Expenses ………
Loading and Carriage Charges on Sales ………
Rent of Warehouse (of finished goods) ………
Insurance & Lighting of Warehouse ………
Expenses of Delivery Van ………
Salaries of Packing Department ………
Collection Charges ………
Cost of Catalogues ………
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11. Cost of Mailing Literature ………
Cost of Tenders ………
Branch Expenses ………
Total Selling and Distribution Overhead ………
TOTAL COST OF GOODS SOLD OR
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COST OF SALES
………
PROFIT
………
SALES
………

12. Amul-Ice-Cream Company’s Cost Sheet
Following are the particulars of the Amul- Ice-Cream
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12
company’s cost sheet:
Particulars Total
Cost
Rs.
Cost per
Unit
Rs.
Rs.
Direct Material
Consumed:
Opening stock of Material 100000 10
Raw material 300000 3
Dry fruit 250000 2.5
Milk 300000 3
Flavours 350000 3.5
Other ingredients 200000 2
Sugar 250000 2.5
Cup 150000 1.5
Cutlery 100000 1
Seasonal fruit 50000 0.5
Waffle 100000 1
Cocoa 150000 1.5 3200000
Carriage inward 1.845 184500
Raw material consumed 33.845 3384500
Direct expenses 2.2 220000
Direct labour 5.3 530000
Prime Cost 41.345 4134500
Factory overhead: Fixed:
Deprecation 250000 2.5
Rent 100000 1
Power 175000 1.75

13. Insurance 150000 1.5
Superior’s Salary 60000 0.6
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Variable :
Electricity 70000 0.7
Running expenses of
machine
100000 1
9.05 905000
Work cost 50.395 5039500
Office overheads:
Employee cost 1000000 10
Other expenditure
Computer 120000 1.2
Telephone 10000 0.1
Taxes 40000 0.4
Carriage outward 20000 0.2
11.9 1190000
Cost of Production 62.295 6229500
Opening stock closing stock 2 200000
Cost of goods sold 64.295 6429500
Selling &Distribution
expenses:
Advertisement` 400000 4
Delivery vehicles 350000 3.5
Petrol 175000 1.75
Packaging Rates 50500 0.505
9.755 975500
Cost of sales 74.05 7405000
Profit 18.5 1851250
Sales 92.5625 9256250

14. Question1: Comment of the company production and
sales aspects and estimate the profit?
Question2: Estimate the company’s per-unit profit of Ice-cream?
Question3: Calculate the selling price (S.P.) the
company?
SOLUTIONS
Answer1: By analyzing the cost sheet of the Amul Ice Cream
Company, we can see that the total cost of Ice Cream production
of the company is Rs. 6229500; therefore, cost per unit of the
production will be Rs.62.295. After introducing the product (Ice
cream) into the market, the company estimated the cost of sales
to be Rs.7405000, therefore, cost per unit will be Rs.74.05 but
before introducing the product in the market, the company will
calculate its profit by adding 25% into the total cost of sales of
the product, so the company will generate a profit of
Rs.1851250.
Answer2: Total selling price of the company is Rs-9256250 and
the selling price of the ice-cream per unit is Rs-92.5625. Then
per unit profit for ice-cream would be Rs-18.5.
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15. Answer3: The selling price of the company is Rs.9256250
which is 20% at the cost.
CONCLUSION
By preparing the cost sheet, company can compare its
position with that of its competitors. According to the
analyses of the company’s cost sheet the company will
earn the profit of Rs.1851250 at the cost of Rs.7405000
which is a good profit to be considered.
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