IJH-2015v5n11 - page 11

International Journal of Horticulture 2015, Vol.5, No.11, 1-11
http://ijh.biopublisher.ca
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Table 6 Cost of Production of Match Splints
Sl. No Particulars of Cost Number of Units Item wise Cost in Rs Percentage to Total Cost
A. FIXED COST
1 Rental Value of Land and Buildings One Acre 38000 00.51
2 Depreciation Cost on Machineries 7 Per Cent 140000 01.87
3 Annual Electrical Installation Charges 10 Years 2500 00.04
4 Interest on Fixed Capital 5 Per Cent 75000 01.00
5 Land Tax and Cess 850 00.01
6 Salary on Permanent Staff 10000/ Month 120000 01.60
7 Share of Establishment 75000 01.00
8 Total Annual Fixed Cost 451350 06.03
B. VARIABLE EXPENSES
1 Cost of Raw Materials ( Match Wood) Rs 4000 / Ton 4960000 66.18
2 Cost of Sulphur for Fumigation of Splints Rs 100 / Kg 93000 01.24
3 Labor Charges Rs 117500/ Month 1290000 17.21
4 Electricity & Fuel Charges 107500 01.43
5 Cost of Marketing 96000 01.28
4 Miscellaneous Expenses One Year 60000 00.80
5 Interest on variable cost 436590 05.83
6 Total Variable Expenses 7043090 93.97
7 Total Cost of production (A+B) 7494440 100.00
C. REVENUE REALIZED PER ANNUM
1 Sale of Match Splints @ Rs 41 per Kg 421.600 Tons 17285600 91.47
2 Sale of Fuel Wood @ Rs 3 Per Kg 508.400 Tons 1525200 08.07
3 Sale of wood residues@Rs.1/kg 70 Kgs /ton 86800 00.46
4 Gross Income Realized Rupees 18897600 100.00
5 Net Income Realized per Annum Rupees 11403160 60.34
D. COST OF PRODUCTION OF MATCH SPLINTS
1 Cost of Production per Ton Rs / Ton 17776.00
2 Sale Price of Match Splints Rs/Ton 41000.00
3 Net Income Realized Rs / Annum 23224.00 56.64
4 Output – Input Ratio Ratio 02.52
is arrived at Rs 18/-. The sale price of Match Splints
on an average is accounted to be Rs 41 per kg. The
efficiency of a firm in an industry could be evaluated
or assessed by computing Output – Input Ratio
(www.farmdoc.illinois.edu/irwin/archive/books/marke
ts-prices/markets-prices_chapter21.pdf.). It revealed
that the production of Match Splints is highly
profitable according to the Output-Input Ratio of 2.52.
It revealed that for one rupee of investment the
company could realize a gross income of Rs 2.52 and
the net income of Rs 1.52.
In respect of actual income generated from the
production process is composed of three sources of
income viz., sale of match splints; sale of fuel wood
and the sale of wood residues. All these are priced at
the market price prevalent during the November 2014
and the same are taken into account in arriving the
gross income in the production of match splints. The
sale of match splints alone capable of generating
172.85 lakhs as gross income and the sale of fuel
wood is able to generate a revenue of Rs 15 lakhs per
annum and the wood residues are capable of
generating only 0.87 lakhs per annum. Put together, all
the three output could generate a total income of Rs
188.98 lakhs and the net income after deducting the
total cost of production is arrived at Rs 114 lakhs per