Costing of 100 Plates-1[1]

Cost Management &

Management Control Project

COSTING OF 100 PLATES OF LUNCH

MHRDM 2010-2013

1MHRDM 2010 – 2013 COST MGMT & MGMT CONTROL

SUBMITTED BY

NAME ROLL NO.

VAISHALI AMIN 123

DORREL GODINHO 136

SHWETA MAHADIK 144

SUDIP PARUI 151

VIRAL SOMAIYA 164

ONKAR DICHWALKAR 174


Acknowledgement

During the perseverance of this project we were supported by

different people, whose names if not mentioned would be inconsiderate

on our part.

We would like to thank the owner Mr. Prabhakar Salvi of Swapna

Caterers for helping us in completing the project and giving out

confidential information about the cost incurred by them for 100 plates.

We would like to express our sincere gratitude to Prof. S. L.

Chopde for giving us the opportunity to work on such an informative

project which proved to be a very good learning experience. We would

also like thank him for his valuable expertise and for guiding us

throughout our project.

We would also like to thank the MET Library staff for allowing us

to use the library for our reference purpose.

Finally, we would like to thank all those who have directly and

indirectly helped us throughout our project and motivated us for its

successful completion.


Preface

This report consists detailed costing of 100 plates of Lunch. The

data for the same has been collected from various sources & the content

has been formulated accordingly.

The menu for the Lunch plates may vary from supplier to supplier

& may affect the costing accordingly.

However, the basic elements of cost statement would remain the

same.

The overhead costs considered are according to the quantity 100.

Further, as the quantity increases, overheads would further increase.


Executive Summary

A cost statement is very important to be made with the help of

which complete understanding of its break up is made available.

The Cost Statement includes Direct Material, Direct Labour, Direct

Expenses and Overheads. For calculation of cost of 100 plates we need

to take into consideration all the costs incurred.

The total cost of Direct Material is Rs.10500 the total cost of Direct

Labour is Rs.5000 and the Total cost of Direct Expenses and Overheads

is Rs.3000 .The total cost of 100 plates is Rs.18500

If we consider profit of round about Rs.10000 then our selling price

for 100 plates of lunch will be Rs.28500 with a complete delicious food.

Thus charges per plate of lunch will be Rs.285/- (Rs. ⁄100 plates of

lunch).


Contents

Sr. No Topics Page number

1 Introduction to costing 7

2 Direct Material cost 10

3 Labour cost 11

4 Overhead cost 12

5 Profit 13

6 Cost sheet for 100 plates 14

7 Cost sheet details 15

8 Bibliography 19


Costing

The term COST indicates expenses. It can be regarded as the

price paid for attaining the objective. In fact, understanding the term of

costs needs an analysis of expenses or expenditure.

Costing is ascertainment of costs. It is different from cost

accounting. It is referred to as classifying, recording and appropriate

allocation of expenditure for determination of the costs of the products or

services.

Costing is a process of ascertaining costs. It consists of rules and

principles of ascertainment of costs of a product or service.


Cost can be classified as:

1. ON THE BASIS OF BEHAVIOUR

FIXED :

In management accounting, fixed costs are defined as

expenses that do not change in proportion to the activity of a

business, within the relevant period or scale of production.

VARIABLE :

A cost that changes in proportion to a change in a company's

activity or business.

SEMI-VARIABLE :

A cost composed of a mixture of fixed and variable

components. Costs are fixed for a set level of production or

consumption, becoming variable after the level is

exceeded. Also known as a "semi-fixed cost."

2. ON THE BASIS OF ELEMENTS OF COST

DIRECT COST

A cost that can be directly traced to producing specific

goods or services.


For example, the cost of meat in a hamburger can

be attributed directly to the cost of manufacturing that product. Other

costs, such as depreciation or administrative expenses, are more difficult

to assign to a specific product, and so are not considered direct costs.

Another example can be, the wages of an employee engaged in

producing a product can be attributed directly to the cost of

manufacturing that product.

Thus Direct Cost can be classified in three elements.

Direct Material

Direct Labour

Direct Expenses

INDIRECT COST:

A cost that is not directly related to the production of a specific

good or service but that is indirectly related to a variety of goods or

services. For example, the cost of administering a large company is

an indirect cost that must be spread over a number of products or

services. Also called overhead.

It is that portion of total cost, which can't be identified and

charged directly to the product. It has to be allocated, apportioned

and absorbed over the unit’s manufactured on a suitable basis. It

consists of following three elements:

Indirect Material

Indirect Labour

Indirect Expenses


Direct Materials Cost

Direct material cost is that component of a product that has not yet

been placed into the product or into work in process inventory. This

account contains the cost or the standard cost (depending on the cost

accounting system) of the direct materials on hand. A manufacturer

must disclose in its financial statements the cost of materials on

hand as well as its cost of work in process and finished goods.

Thus, in case of lunch plates, the inventory would be the basic

food items (the material used for the same) & their computation would be

given as:

= Fixed Cost + Variable Cost

= Cost of Material + (Carrying Cost + Ordering cost)

In case of 100 food plates, flour, sugar, and vegetable oil are direct

materials of a company that manufactures dessert products.

In case of lunch, the direct materials include the costs of the food

or beverage items.

Food includes all kinds of vegetables, fruits, flour, cereals, paneer,

butter, oil, ghee, etc for the main course as well as for starters and salad.

It also includes water, cold drinks, etc.


Labour Costs

Total labour costs are the sum of wages and salaries (pay) paid by

an employer to an employee, plus any other costs incurred by the

employer. As well as wages and salaries, total labour costs include

employer's social contributions (including national insurance,

contributions and pensions, paid on behalf of the employee) and other

non-wage costs including sickness, maternity and paternity costs,

vocational training costs, recruitment costs and benefits in kind. The

latter include company cars, mobile phones and accommodation.

In this case, Labour costs include the costs of food preparation and

service by the workers. Also included are Social Security taxes (FICA),

retirement and other benefits such as health or life insurance. To

determine labour costs per hour, keep a time log. When placing a value

on your time, consider the following:

Your skill and reputation

Wages paid by employers for similar skills

Location of Stay

Other pricing factors include image, inflation, supply and demand,

and competition. In case of preparation of 100 food plates, the

remuneration given to the cooks would contribute majorly as the labour

costs.


Overhead Costs

Overhead costs may be variable or fixed expenses that must be

covered to stay in business.

Variable costs are those expenses that fluctuate including vehicle

expenses, rental expenses, utility bills and supplies.

Fixed costs include the purchase of equipment and service ware.

After overhead costs are determined, the total overhead costs are

divided among the total number of catering jobs expected.

In our case, the overhead costs would involve the following:

Cost incurred towards the cleaners

Cost of Utensils and Napkins

Rent and Electricity

Also includes expenditure made on tables


Profit

It is a desired percentage added to ones total costs. You will need

to determine the percentage of profit added to each menu item or type of

event.

Determining a price is not easy. There is no one exact price. Base

your price on the type of event being catered, special services offered

and your competition.

To operate a profitable catering business, you need to decide on a

price that is appropriate for the services rendered. Determining the costs

of catering an event is the most important part of covering your

expenses and earning profits. Caterers price their services using

different methods. The pricing formula that covers your costs and

provides a profit is as follows:

Materials + Labour +Overheads + Profit = Price

Thus, in case of lunch plates:


Cost Component

Materials Cost of food items

Labour Cost of cooks

Overhead Cost of utensils

Costing Of 100 Plates from Swapna Caterers

MENU

1. Aloo Chat2. Papad3. Paneer Makhanwala4. Veg Kolhapuri5. Dal Fry/Dal Tadka (any one)6. Pickle7. Sweet (Ltd): Gulab Jamun/Rasgulla/Sitafal Basundi8. Naan/Puri/Paratha9. Vegetable Pulav10.Raita11. Farsan Item: Cutlet, Cocktail Samosa / Harabhara Kebab

Note:

Taxes as applicable

Order will be taken for the numbers of persons fixed

At the time of the order and rate will be charged accordingly, Irrespective of

their presence at the occasion

50% advance with the order and balance after the function will be taken.

Minimum order should be for 25 persons

Parcels are not entertained after the function

All food prepared in refined sunflower oil only


Statement of Cost for 100 Plates

NO. PARTICULARS WORKING NOTE NO.

AMOUNT (Rs.)

1 DIRECT MATERIAL 1 10500

2 DIRECT LABOUR 2 5000

3 DIRECT EXPENSES 3 1500

PRIME COST 17000

4 ADD: OTHER OVERHEADS 4 1500

TOTAL COST 18500

5 PROFIT 10000

6 SALES 28500

7 SELLING PRICE PER PLATE 285

The company initially attains the total cost by summing up the cost

items. Once this is done cost per plate is calculated.

The company then fixes the per plate price with the customer through

negotiations to reach the profit per plate and thus the profit margin.

Notes:


1. Utensils & tables are on rent.

2. The labour is paid on a consignment basis.

Working Notes

1. DIRECT MATERIAL

NO INGREDIENTS QUANTITY PRICE PER KG/LTR

TOTAL

EXPENSE

1 Sitafal 5 kg 50 250

2 Tomato 15 kg 20 300

3 Carrot 3 kg 30 90

4 Papad 4kg 150 600

5 Peas 4 kg 40 160

6 Lemons 30 pcs 5 150

7 Onions 15 kg 18 270

8 Potatoes 10 kg 15 150

9 French beans 4 kg 50 200

10 Capsicum 2 kg 40 80

11 Oil 15 litres 90 1350

12 Sugar 4 kg 15 60


13 Curd 12 kg 50 600

14 Kasuri Methi 100 gms 150 15

15 Dal 10 kg 45 450

16 Corriander 10 bundles 12 120

17 Chillies 500 gms 54 30

18 Mix masala 250 gms 400 100

19 Ghee 5 kg 150 750

20 Basmati Rice 10 kg 50 500

21 Maida 10 kg 35 350

22 Paneer 7 kg 120 840

23 Mava 2 kg 150 300

24 Cashewnuts 250 gms 400 100

25 Raisins 200 gms 250 50

26 Amchur 100 gms 100 10

27 Jeera 50 gms 100 10

28 Rai 20 gms 120 10

29 Palak 50 Bundles 7 350

30 Milk 30 litres 25 750

31 Wheat Flour 10kg 14 140

32 Assorted Mukhwas 1 Kg 230 230


33 Pickle 1kg 135 135

34 Rasgulla 250 4/piece 1000

TOTAL 10500

2. DIRECT LABOUR

SERIAL NO. LABOUR NUMBER WAGES

1. Main Cooks 2 3000

2. Helpers 3 1500

3. Cleaners 2 500

TOTAL 7 5000

3. DIRECT EXPENSES

SERIAL NO. ITEMS NUMBER AMOUNT

1 GAS CYLINDER 4 1500

TOTAL 1500

4. OTHER OVERHEADS

SERIAL NO. ITEM AMOUNT

1. Utensils 540

2. Rent 400

3. Electricity 300


4. Tables 200

5. Paper Napkins 60

TOTAL 1500

Bibliography

Cost Accounting by CHAWLA AND KAPOOR

Cost Accounting by Horngen , Datar ,Foster

Visit to Swapna Caterers


Costing of 100 Plates-1[1]

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