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INTERPRETATION:
The above table shows that the prime cost of the cost sheet during the year 2000-
2001 to 2006-2007. In the year of 2000-2001 the prime cost was 11.58% of sale. It has
increased at 12.43% of sale in the year 2001-2002. From the year 2002-2006 the prime
cost was decreased (12.43 to 6.76). It was maximum at 14.109% of the sale in the year of
2006-2007.
Canteen Expenses NIL NIL NIL NIL NIL NIL 169455 0.005
Electricity Charges NIL NIL NIL NIL NIL NIL 274344 0.009
Fine and Penalty 2000 0.0002 7000 0.0005 39000 0.002 30520 0.0003
General Expenses 98000 0.011 178000 0.0131 59000 0.004 268881 0.009
Food and Fever ages NIL NIL NIL NIL 853000 0.053 919785 0.03
Donation 40000 0.005 77000 0.0057 134000 0.008 214581 0.007
Insurance 389000 0.045 629000 0.0463 588000 0.036 419742 0.014
Legal & Accountancy 239000 0.028 50000 0.0037 18000 0.001 5500 0.0002
Charges
License Fees and Taxes 510000 0.059 307000 0.0226 437000 0.027 1507182 0.049
Office Expenses 87000 0.01 113000 0.0083 108000 0.007 93220 0.003
Consulting fees 30000 0.003 30000 0.0022 138000 0.009 62000 0.002
Advertisement NIL NIL 69000 0.0051 79000 0.005 106854 0.003
Printing & Stationery 267000 0.031 377000 0.0277 517000 0.032 853395 0.028
Professional Charges NIL NIL 19000 0.0014 17000 0.001 456086 0.015
Remuneration paid to 2040000 0.236 2040000 0.15 2040000 0.127 1200000 0.039
Directors
Rent NIL NIL 47000 0.0035 95000 0.006 161480 0.005
Security Charges NIL NIL NIL NIL NIL NIL 65250 0.002
Subscription 1123000 0.13 216000 0.0159 278000 0.017 183000 0.006
postage and Telegram 12000 0.001 17000 0.0013 27000 0.002 55912 0.002
Traveling Expenses 788000 0.091 926000 0.0681 413000 0.026 880368 0.028
Sales tax & service tax 6000 0.0007 64000 0.0047 176000 0.011 115605 0.004
Telephone Expenses 240000 0.028 501000 0.0368 699000 0.043 1268576 0.041
Festival Expenses 38000 0.004 72000 0.0053 64000 0.004 105084 0.003
Sundry Balances Written off NIL NIL 3000 0.0002 70000 0.004 177216 0.006
9532000 1.103 10092000 0.74224 10016000 0.62146 16264566 0.52628
INTERPRETATION:
The above table indicates that, the cost sheet of administrative expense was increased at
1.52% of the sales in the year of 2000-2001 to 2001-2002. During the year 2002-2007 the
administrative expanses was decreased from 1.523% to 0.526% of the sales.
INTERPRETATION:
The selling and distribution expense is based on the investment in advertising, discount
allowed to sales, loading expenses and depreciation charges. The company caution may
have served as a catalyst for sellers, but after prices of raw material and mining stock hit
such heights and production cost. So the selling and distribution expense will differ based
on the sales. The selling and distribution expenses was increasing and decreasing from
the year 2000-2001 to 2006-2007. So it was fluctuating trend. The selling and distribution
expense for the years 2002, 2004 and 2006 was low as well as good.
INTERPRETATION:
The earlier underperformance during the continuous year is due to factors like rising
interest rates and bank charges, slowing credit growth, pressure on interest margins and
potential threat of rising non-performing assets. Cost sheet of finance charges from the
year 2001-2002 to 2006-2007. The maximum during the year 2006-2007 at 0.80% of
the sale and it was minimum during the year 2002-2003 at 0.54%.
house on 2007
Benefit Received in the year
of 2007
Rent 1800000
Reduction of 800000
transportation cost
Raw material waste 150000
Labour utilization wage 576000
Total 33,26,00
0
If Ware house was not implementing and that amount was invested into
bank or if any other financial institutions the interest rate would be
10,69,30
5
INTERPRETATION:
The above table indicates the analysis of warehouse implementation during the
year 2007. The company has spend the implementation of warehouse amount was
RS.1,30,40,301. For that purpose farm has saved Rs.33,20,000. The Company need
1,50,000 sqr.fit capacity of warehouse still the year of 2010. So the company will save
Rs 25,00,000 to 45,00,000 lakhs per year for the warehouse implementation.
If the company have invested for the bank RS.13040301it will receive the interest
only RS. 1069305.
But the financial year of 2007 the company has saved RS.33, 22,000 for the
implementation of warehouse to receive the benefit.
INTERPRETATION:
Globally, coal and gas continue to dominate as the prime source for generating
power. The growing presence in other markets and favorable industry trend is also
reflected in the company’s strong revenue and growth. As far as margins are concerned,
even if produced more the margin will get increased based on environment climate. The
shanthi poultry farm has 8 large wind mills with capacity of 4.75M.V. The company has
spent initial investment up to 2007 Rs. 194113502 and got revenue RS.90950770 for
generating power still the year of 2007. The company has gained the benefit
RS.59158943 from the windmill power generation.
INTERPRETATION:
The above table shows that Marginal costing and differential costing of capacity
utilization based on the financial year 2006-2007. The costs of capacity utilization will
increase at 60% to 70% as well as sales and profit after tax also increased.
INTERPRETATION:
For an additional output of 10,000 tons over the operated capacity of 90,000 tons, the
differential cost was Rs.32, 22, 46,070. Since the profit margin required 11.15% on the
sales or 15% on the cost: hence the minimum selling price will be increased. In the
above case differential costs were Rs.32, 22, 46,070 while differential prime costs were
RS.2, 52, 66,606.and the variable cost was Rs.3, 45, 56,182. .
Add: Selling
SANKARA COLLEGE and distribution
OF SCIENCE 3476886
AND COMMERCE 55
Selling expenses 1163400
Commission & Brokerage - Sales 2059686
Unloading and Loading expenses 76619282
Discount Allowed on Sales 16999000 100318254
Total cost 3074520978
ANALYSIS AND INTERPRETATION CHAPTER IV
(Continuous)
Total cost
Calculation of cost of per unit: number of
Output
: 3074520978
106017965
(106017.96 tons)
Interpretation:
This above statement shows that, the analysis of cost sheet for the year ended 31
December 2007. The overall cost was Rs.3074520978. The number of units of output was
(106017.96 tons) and cost per kg is Rs.29.
INTERPRETATION:
From the above computations, it is cleared that the higher fixed cost and lower
variable cost should be used to implement the farm project. If the variable cost is
increased, the price will be high. If the raw material cost is reduced, the profitability will
be more to operate the farm.
A. CAPITAL COST
(Amount in Rs.)
B. RECURRING COST
ASSUMPTIONS
B. Financial parameters
FINANCIAL ANALYSIS
INCOME
TOTAL BENEFIT 136450 154140 154140 154140
POULTRY
COST OF REARING 100 BROILERS (WEEKLY BATCHES)
(Amount in Rs.)
A. CAPITAL COST
B. RECURRING COST
2. Cost of feed for 7 batches of 102 birds each @ 3.2 kg. Per bird
@ Rs.8.60 / kg. … 20,563.00
3. Cost of medicines, vaccines and misc. charges for
7 batches of 102 birds each@ Rs.5.00 per bird 3,570.00
4. Insurance of birds – 735 birds at Re.1/- per birds 735.00
5. Insurance of sheds @ Rs.5.05 per Rs.1000/- per year 247.00
TOTAL – ‘B’ 36,140.00
TOTAL - ‘A’ + ‘B’ … … 95,640.00
UNIT COST … … … 95,600.00
BANK LOAN (90%) … … 86,040.00
ASSUMPTIONS
A. Technical parameters – fortnightly batches of 100 birds in deep litter system
B. Financial parameters
FINANCIAL ANALYSIS
IRR >50 %
POULTRY
UNIT COST OF REARING – 200 LAYERS
(Amount in Rs.)
A. CAPITAL COST
B. RECURRING COST
SANKARA COLLEGE OF SCIENCE AND COMMERCE 63
ANALYSIS AND INTERPRETATION CHAPTER IV
(Amount in Rs.)
1. Cost of day old female chicks (DOC)
200+10% extra i.e 220 chicks @ Rs.15.00 per chick … 3,300.00
2. Cost of chick and grower feed up to initial stages of laying
@ Rs.7.5 kg. Per bird for 210 birds @ Rs.8.50 per kg .… 15,173.00
3. Medicines, vaccines, litter and misc. charges up to initial
Stages of laying @ Rs.10.00 per bird for 210 birds 2,100.00
4. Insurance of birds from day old to culling @ Rs.2.00 per bird
For 220 birds 440.00
5. Insurance of sheds @ Rs.5.05 per Rs.1000/- per year 179.00
TOTAL – ‘B’ 21,192.00
TOTAL - ‘A’ + ‘B’ … … 59,277.00
UNIT COST … … … 59,300.00
BANK LOAN (90%) … … 53,400.00
ASSUMPTIONS
A. Technical parameters :
B. Financial parameters
(Amount in Rs.)
FINANCIAL ANALYSIS
POULTRY
UNIT COST OF REARING – 500 LAYERS
(Amount in Rs.)
A. CAPITAL COST
1. Construction of shed – brick and mud wall, bumboo, purlins,
thatched roof @ Rs.70 per sq.ft.
a) Brooder cum grower shed – 1 sq.ft. per bird for 260 birds
i.e. 260 sq. ft. … 7,350.00
b) Layer shed – 2 sq.ft.per bird for 500 birds- 2 pens
of 500 sq.ft. each i.e. 1000 sq. ft. … 70,000.00
2. Improvised brooder equipment @ Rs.7.00 per birds for 260 birds … 1,820.00
3. Improvised layer equipment @ Rs.10.00 per bird for 500 birds … 5,000.00
TOTAL – ‘A’ … 84,170.00
B. RECURRING COST
ASSUMPTIONS
A. Technical parameters:
B. Financial parameters
SANKARA COLLEGE OF SCIENCE AND COMMERCE 67
ANALYSIS AND INTERPRETATION CHAPTER IV
(Amount in Rs.)
FINANCIAL ANALYSIS
The beneficiaries will be supplied at a time with 2000 to 5000 chicks which are 6
weeks old. The economics of a beneficiary unit having 5000 birds is worked out here.
The initial fixed expenditure to be incurred is Rs. 11, 00,000 (Rs. 5000 for night shelter
and Rs. 52000 for the feeders and drinkers). The first batch of 4750 chicks will cost Rs.
142500 at the rate of Rs. 30 per chick. The cost of feed required (at the rate of 50 grams
per day per bird 225kg) for first 5 weeks and medicines will come to Rs.6000. After the
first 5 weeks, feed worth Rs. 2,52,000 will be provided for another 5 weeks. This entire
cost of Rs.15,00,500 will be subsidized as the beneficiary who often would belong to a
SANKARA COLLEGE OF SCIENCE AND COMMERCE 70
ANALYSIS AND INTERPRETATION CHAPTER IV
family cannot afford to make any investment. The beneficiary will rear the birds and she
will sell the male birds (about 475 in number) when they are 16 weeks old; this is
expected to fetch about Rs. 21375. The female birds will start laying eggs when they are
26 weeks old till the 80th week. It is expected that each bird will lay on an average 3 eggs
per week during this period. The eggs of these country birds are expected to fetch a
minimum price of Rs. 1.50 each. At the end of the 80th week the beneficiary will sell the
culled female birds for meat purposes earning an income of about Rs. 11,54,250.
Meanwhile, 26 weeks after the supply of the first batch of birds another batch of 4750
birds will be supplied to the beneficiary with feed and medicines.
It is proposed to provide 80% of the cost of this (i.e. 80% of Rs. 12,00,400) as
subsidy as the income which has accrued to the beneficiary by that time would not be
significant. Like this, 20 six week old chicks will be supplied to the beneficiary after a
gap f every 26weeks. The subsidy for the third batch will be restricted to 60% (of Rs.
9,00,300) and no subsidy is proposed to be given for subsequent batches of birds as the
beneficiary’s income stream (from sale of culled birds and eggs) would enable her to
meet the required expenses apart from using part of the income for the consumption of
the family.
With this cycle for the supply of six week old birds and the subsidy pattern
mentioned above, it has been worked out that in the first 72 weeks after the beneficiary
gets the first batch of birds, she will get a total income of Rs.2,02,500, out of which she
has to incur expenses of Rs. 10,18,500 (net of a total subsidy of Rs. 12,61,125), leaving
her with a surplus income of Rs.2,42,625. After this, the annual income of the beneficiary
will be Rs.2,39,375.
Farms for the supply of one day old chicks will have attached to it 10 mother
units initially and 15 mother units from the third year onwards. The mother unit has to
supply 6 week old chicks to the beneficiary units with feed and medicines, and also to
market the eggs and the culled birds unless the beneficiary is able to sell the same locally.
The mother unit has also to periodically provide necessary services to the beneficiaries.
For the success of the scheme, it is, therefore, very important to ensure the economic
viability of the mother unit. Each mother unit is expected to cater to 200 beneficiaries
initially (later this is expected to be increased to 300). The mother unit has to supply 6
week old chicks to each beneficiary (an average of 45 per beneficiary is assumed) once
every 26 weeks, making a total of 12000 chicks per year. The mother unit gets one day
old chicks (at a cost of Rs. 10 per chick) and rears them till 6 weeks and then supplies
SANKARA COLLEGE OF SCIENCE AND COMMERCE 72
ANALYSIS AND INTERPRETATION CHAPTER IV
them to the beneficiaries at a price of Rs. 45. The total number of 12000 chicks expected
to be supplied to the beneficiaries in a year are to be reared in seven batches of about
1720 each. After meeting all costs of feed, medicines and labour costs, the mother unit
will earn a margin of Rs. 5 per chick. Its annual net income will thus be Rs. 60,000.
The initial fixed cost to be incurred in setting up a mother unit will be Rs.
3,72,000(consisting of Rs. 3,20,000 for poultry shed of area 1000 sq. feet with asbestos
roof); Rs. 32,000 for feeders and drinkers and Rs. 20,000 for cycles (with proper
attachments for carrying chicks and birds) and other miscellaneous costs. It is proposed
that 10% of this cost should be borne by the NGO setting up the mother unit, 30% as
interest free loan by Government, 20% as subsidy by Government and 40% as loan by
banks. The loan will be repayable in five years. Out of the annual income of Rs. 1,20,000,
the mother unit will have to meet the annual interest and repayment burden of about
Rs. 35,000, leaving a net income of Rs. 85,000.
In addition to this the mother unit can earn margin on sale of culled birds (an also
eggs) which the beneficiaries are not able to dispose of locally. Assuming that the
proportion of such birds to be sold by the mother unit comes to about 25%, the annual net
income (at the rate of Rs. 5 per bird) will come to Rs. 15000 giving a total income of Rs.
1,00,000. This is expected to ensure the general viability of the mother units. From the
second year onwards when a mother unit is able to cater to 300 beneficiaries, the net
income from the sale of 6 week old chicks will be Rs. 67,500 and the margin from sale of
culled birds will be Rs. 22,500 making a total of Rs. 90,000