INDEX

1. ACKNOWLEDGEMENT

2. INTRODUCTION

3. SWOT ANALYSIS

4. PRODUCT COSTING

5. COST OF SALES, DIRECT MATERIAL, DIRECT LABOR

6. ABSORPTION COSTING

7. VARIABLE COSTING

8. BREAKEVEN ANALYSIS

9. TARGET COSTING

10. RECOMMONDATIONS
 ACKNOWLEDGEMENT
We have taken efforts in this project. However, it would not have been possible without the
kind support and help of many individuals. We would like to extend our sincere thanks to all of
them.

We are highly indebted to our cost accounting’s teacher Professor Abdus Salam Shaikh for
their guidance and constant supervision as well as for providing necessary information
regarding the project & also for their support in completing the project.

We would like to express special gratitude and thanks to individuals who provides us assistance
for collecting products cost. We are highly thankful to them for their kind co-operation which
help us in completion of this project.

The purpose of project is to learn practically about the cost procedures/methods learned in the
course during the semester and project was assigned to us by our teacher Sir Abdus Salam
Shaikh.
 SWOT ANALYSIS
Strengths
 Located at the most highly demand place.
 Customers are highly satisfied.
 Fills the market gap.
 Supplies wooden cabinets to all areas including schools offices and home.
 Applick rally and thread work chaddar are culture oriented product’s, could be sold to
those who follow traditions.

Weakness
 Electricity issue.
 Delivery problem on time.
 More and less wastage issues.
 Applick rally and thread work chaddar require lot of time to prepare, product
manufacturing happened without any use of machine.

Opportunity
 Can increase sales by entering in new markets.
 Profit can be maximize by replacing with capital intensive methods.

Threats
 Existing competition
 Depend on consumer’s preference
 Better quality wooden stamps.
 PRODUCT COSTING
DIRECT MATERIAL
Cost per unit
APPLICK RALLI (handmade)
Items Quantity Cost item total cost
per product
Charmeuse Silk Fabric 6m 85Rs/m 510

Plain Fabric 12 m 50Rs/m 600

Used Cloth 5m 5Rs/m 25
Thick Thread 1 roll 5Rs/roll 5
Cott on Thread 6 rolls 6Rs/roll 36
Sharp Needle (size 3) 2 needles 20Rs/packet 2
Embroidery Needle 1 needle 30Rs/packet 2
TOTAL 1180Rs

THREAD EMBRIODERY CHADDAR

Items Quantity Cost Item total cost
per product
Plain fabric 2.5m 145/m 362.5

Thick thread 10 rolls 5/roll 50

Mirror 100 0.2/mirror 20
Sharp Needle (size 2) 5 needles 20Rs/packet 4
Embroidery Needle (size 11, 12) 10 needle 30Rs/packet 15
Total 452Rs

CABINET
Items Quantity Cost Item total cost
per product
Cheap board 7 1700 11900

Kitchen pally 3 2300 6900

 Wood 1/2 10 2100 21000

Kabza pati 4 150 600

Drawer sliders 4 140 560

PVC (patina) 3.4 inch 200ft 2 400

PVC (patina) 2 inch 100ft 6 600

Front sheet 7 5000 35000

Kitchen pally MDF upper quality 3 2300 6900

Total 83860

Cost is accounted of 100 sq. feet.

DIRECT LABOR
Products Hours Cost/hour Total
Applick Ralli 60 50 3000
Chaddar 84 24 2000
Cabinets

Thread

Couch

Stylish wooden chair

 FIXED OVERHEAD
Products rent Electricity No: of Hours Total
Applick Ralli -- 650
Chaddar -- 800

Cabinets
Thread
Couch

Stylish wooden
chair

ABSORPTION COSTING

Applick Thread Cabinets Thread Couch Stylish

Ralli Embroidery wooden
Chaddar chair

Sales

Less COGS

Gross Profit

Less exp:
Rent

Electricity

labour

Selling
expense
Transportation
exp:
Net profit
 VARIABLE COSTING
Applick Thread Cabinets Thread Couch Stylish
Ralli Embroidery wooden
Chaddar chair
Sales

Less variable
cost
Direct Material

Contribution
margin
Less fixed cost

Admin &
selling expense

Net profit

BREAKEVEN ANALYSIS
Fixed Cost Contribution Break even Selling Price Break even
Margin (units) amount
Applick Ralli

Chaddar

Cabinets

Thread

Couch

Stylish wooden
chair
 TARGET PROFIT
Fixed profit Target profit Contribution Units require for
margin TP

Applick Ralli

Chaddar

Cabinets

Thread

Couch

Stylish wooden
chair