Act202 Final(fuchka) 4o6b6d

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

Submitted by Name Syed salman Rahman Farhana Sharmin Amy

Jannatul Ferdushi Md. Muhaiminul Islam

Id 1410729030 1410014630 1331014630 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

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



10

13

Appendix

11

7-8

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Letter of Submission

3rd August, 2016 Mr. Shahidullah Instructor, ing 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 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 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

1/10 kg

50

5tk

½ kg

30

15tk

=

710tk

Red chili salt Total raw material cost of 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

=

75tk

Total materials products

raw side

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

Flour Soybean Dabli Onion Green chili Red chili Salt Tamarind Sugar Spices Total

1 1 1 1 1 1 1 1 1 1

Quantity of per plate Total amount of per fuchka plate fuchka 10 2.5 (150/60) 10 6 (360/60) 10 2.5 (150/60) 10 0.35 (20/60) 10 0.17 (10/60) 10 0.09 (5/60) 10 0.25 (15/60) 10 0.25 (15/60) 10 0.17 (10/60) 10 0.83 (50/60) 13.11

 Direct Labor: He himself is the owner, seller, and labor of his business.  MOH cost: Variable cost: Product name Washing and cleaning cost Total

Amount 20tk 20tk

Fixed cost: Product name Stand Bowl Transportation cost Total

Amount 70 130 20 220

Total MOH cost are (20+220) =240 Now, per plate MOH cost is Total MOH cost/total sells plate = 240/60 =4 taka 8|Page

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 220taka variable cost per plate is 13.44 taka and price per plate is 25 takas. : 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 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 10 | P a g e

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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