MANNA Biscuits

Lakshmi Gopal (fk-2970)

Nikitha K S (fk-2973)

Jefin Joseph (fk-3035)

Contents
Types of biscuit ............................................................................................ 4
Process of making biscuit .................................................................................... 5
BUSINESS STRATEGY............................................................................................... 6
COST SHEET............................................................................................................ 7
MARGINAL INCOME STATEMENT........................................................................... 8
INCREASE TOTAL FIXED COST BY 10% ..................................................................... 9
INCREASING VARIABLE COST BY 10% .................................................................... 10
DECREASING SALES PRICE BY 10% ........................................................................ 11
............................................................................................................................. 11
INCREASING SALES VOLUME BY 10% .................................................................... 12
CONCLUSION AND FINDINGS ............................................................................... 13
INTRODUCTION

Biscuit is a term used for a diverse variety of baked,

commonly flour-based food products. The word Biscuit means
"twice-cooked". This is because biscuits were originally cooked
in a twofold process: first baked, and then dried out in a slow
oven A biscuit in the United States and parts of Canada, and
widely used in popular American English, is a small bread with a
firm browned crust and a soft interior. They are made with
baking powder or baking soda as a chemical leavening
agent rather than yeast although they can also be made using
yeast (and are then called angel biscuits) or a sourdough starter.
In North America, they are traditionally served as a side dish
with a meal. As a breakfast item they are often eaten
with butter and a sweet condiment such as molasses, light
sugarcane syrup, maple syrup, sorghum syrup, honey, or
fruit jam or jelly. With other meals they are usually eaten with
butter or gravy instead of sweet condiments. However, biscuits
and gravy (biscuits covered in country gravy) or biscuits with
sausage are usually served for breakfast, sometimes as the main
course. A biscuit may also be used to make a breakfast
sandwich by slicing it in half and placing eggs and/or breakfast
meat in the middle.
One of the best things about biscuits is their versatility. They can
be sweet or savory, light and airy, or dense and buttery. There
are drop biscuits that require nothing more than a brisk stir to
bring the ingredients together and there are rolled biscuits,
which can be pulled apart and slathered with clotted cream and
jam. Biscuits can be as simple as three ingredients, or they can
be super whomped up with cheese and herbs and salty morsels
of country ham.

Types of biscuit
1. CHOKO SQUARES
Hidden Chocolate Square just keep springing up in every bite.
Chok Squares is chocolate redefined. Purist’s would still like it as
Chokolicious

2. DIGESTIVE
Rich in fiber, nature fresh. Digestive is the biscuit that balances
your hectic and chaotic life style. Gives you back the punch to carry
on.
3. MILKUIT
Milk was always healthy, but it never tasted better that now.
Milkuit the delicious taste of health.
4. CASHEW +
For those are Nuts about Cashew. This premium biscuit
Cashew+, is truly a connoisseurs delight.
5. CHAMP
This Glucose biscuit is meant for the Champion. Champ is for the
budding champions, the energizer to push you further.

Process of making biscuit

Biscuits come in many shapes and forms but each one,
quite simply, needs the right ingredients mixed perfectly to produce the
desired end product. There are primarily four stages to making the
biscuit in a factory – Mixing, Forming, Baking and Cooling.
Mixing is crucial in biscuit production, being the first of the four major
production steps where all the ingredients are perfectly blended to
allow the baker to produce the perfect biscuit. In the mixing stage, flour,
fat, sugar, water and other ingredients are mixed together in the right
proportion in large mixers to form the dough. The mixing time is
carefully managed to achieve uniform distribution of ingredients and the
right dough consistency.
During this process, all ingredients like flour, fat, sugar are put together
in the right proportion for dough mixing and then the mix is fed into the
mixers. During this process, the dough temperature and mixing time
play an important role. Mixing time is normally around 15 minutes,
depending on factors like flour characteristics.
Biscuits differ, however, from other baked goods like bread in that they
have lower moisture content and maintaining this in the mixing process
is crucial too. So, control of the mixing process is important and Reading
Bakery Systems reckon its continuous mixing systems allow this.
Continuous mixing, the company says, offers bakers an opportunity to
provide front-end control to the process. Reading’s Exact Continuous
Mixing System automatically meters ingredients and produces dough
continuously to ensure that all dough is processed at the same age,
meaning that no single batch has been sitting longer than any other.
Continuous mixing offers a consistent, uniform dough stream to the
production line at the same rate is being used. The continuous mixing
process eliminates the problems associated with batch cycles and
produces a consistent product all day, every day
Exact Mixer models can produce dough consistently with high
production yields and this can be accomplished in an almost employee-
free operational environment adding significant cost savings and value.

BUSINESS STRATEGY
Our product Manna Biscuit is segmented geographically in both rural and urban
areas. We will target children’s and youngsters more in rural and urban areas to improve our
sales margin. We will promote the biscuit through advertisement, CSR activities to maximize our
sales. A normal biscuit would be sold for Rs.10 and goes up to 120. Promotions are done through
social media as well as conducting events in malls and other public places to make our product
reach a wider area.

Cost Classification

The cost classification includes

 Raw materials consumed

 Prime cost
 Factory overheads
 Administration overheads
 Selling and Distribution overhead
COST SHEET
COST SHEET FOR THE YEAR ENDED 31 March 2016
PARTICULARS AMOUNT Rs. UNIT PRICE
DIRECT MATERIAL
flour 152000 3.38
sugar 30000 0.67
salt 10000 0.22
glucose 20000 0.44
starch 5000 0.11
sweet jelly 15000 0.33
TOTAL 232000 5.16
DIRECT LABOR 70000 1.56
DIRECT EXPENSES 24250 0.54

PRIME COST 326250 7.25

FACTORY OVERHEAD 0.00
power 15000 0.33
indirect wages 5000 0.11
factory stationary 5000 0.11
factory maintenance 7000 0.16
factory insurance 15000 0.33
Electricity 5000 0.11
Depriciation 25750 0.57
FACTORY COST 404000 8.98
OFFICE OVERHEAD 0.00
bank charges 10000 0.22
office rent 8000 0.18
general expenses 15000 0.33
COST OF PRODUCTION 437000 9.71
SELLING & DISTRIBUTION OVERHEAD 0.00
Packaging Rates 5000 0.11
commission on sales 500 0.01
delivery van maintenance 4980 0.11
advertisement 40000 0.89
TOTAL COST 487480 10.83
PROFIT (15% on selling price) 45000 1.00
SALES 300000 6.67
MARGINAL INCOME STATEMENT

Marginal Income

Particulars Amount

Sales 300000

Variable overhead 151730

Contribution 148270

Fixed Cost 103270

PROFIT 45000
INCREASE TOTAL FIXED COST BY 10%

FC INCREASED BY 10%

Particulars Amount Changes

Sales 300000 300000

Variable overhead 151730 151730

Contribution 148270 148270

Fixed Cost 103270 113597

PROFIT 45000 34673

BEP 6070.01 6070.01

Margin of Safety 293930.0 293930.0
INCREASING VARIABLE COST BY 10%

VC INCREASED BY 10%

Particulars Amount Changes

Sales 300000 300000

Variable overhead 151730 166903

Contribution 148270 133097

Fixed Cost 103270 103270

PROFIT 45000 29827

BEP 6070.00 6761.99

Margin of Safety 293930.0 293238.0
DECREASING SALES PRICE BY 10%

Decreasing SP BY 10%

Particulars Amount Changes

Sales 300000 270000

Variable overhead 151730 151730

Contribution 148270 118270

Fixed Cost 103270 103270

PROFIT 45000 15000

BEP 6070.00 6163.86

Margin of Safety 293930.0 263836.0
INCREASING SALES VOLUME BY 10%

Sales Volume Increase BY 10%

Particulars Amount Changes

Sales 300000 330000

Variable overhead 151730 166903

Contribution 148270 163097

Fixed Cost 103270 103270

PROFIT 45000 59827

BEP 6070.01 6677.01

Margin of Safety 293930.0 323323.0
CONCLUSION AND FINDINGS

The company at present manufactures 45000 biscuits and sells them at

price Rs.2/each. Company makes a profit of 45000.

 When the company increase its Fixed Costs by 10%, the Net Profit
goes down to Rs.34673
 When the company increase its Variable Costs by 10%, Net Profit
goes down by Rs.29827. This is because the company’s Variable
Cost composition is less as compared to its fixed cost.
 When the company lowers its Selling Price by 10%, it suffers a
huge loss. Profit falls by around 70%
 When the company increase its Sales Volume by 10%, it enjoys a
hike in profit of Rs.59827

Therefore, in order to raise its profit the company needs to increase its
Sales Volume.