Costing For Business Analysis In 2021

amy pohwani
in career
Costing For Business Analysis In 2021

TRIFOODS is aspiring to be one of the leading confectionery and snack companies in Pakistan. Since its inception in 2018, it has always believed in providing quality and healthy confectionery items to its customers. The company's headquarters is located in Karachi and deals nationwide with bubblegums, candies and wafers, crown jewels, and its portfolio. With the ambition and aim to be the leading confectionery and snack item company in Pakistan, TRIFOODS will soon step into the snack line with the same promise and motto of providing quality and healthy products; furthermore, TRIFOODS also aims to expand its operation nationwide and internationally by setting up factories in major cities of Pakistan and by stepping into exporting to 5 significant countries of ASIA with aims to ship globally later on. Furthermore, TRIFOODS also believes in making the world a better place, thus conducting CSR activities to improve people's living situation. Following this approach, TRIFOODS has employed several physically disabled people to help them earn a living.


Product costs refer to those costs that are incurred by a business from manufacturing a product. To further simplify this term, it can also be said that product costs are those related to manufacturing or factory. Some of the examples of product costs can be Raw material, general overheads, and factory rent.

TRIFOODS being a company that deals in multiple products also incurred considerable product costs which include direct materials 39%, direct labor 29%, and different allocated factory overheads 32%, (all of the percentages of varying product costs are taken if product cost is considered to be 100%)

Period costs refer to all of those costs that are not a part of product cost and are not directly related to the manufacturing process to simplify this further. It can be said that period costs are all of those costs unrelated to the manufacturing are non-manufacturing.

TRIFOODS, a company that deals in multiple products, also incurred considerable period costs, including administrative office salaries of 50%, organizational office equipment 10%, sales commission 25%, and advertising 15%. (all of the percentages of different period costs are taken if the period cost is considered to be 100%)

Indirect comparison of the period and product costs incurred by the company product costs weighs more than period costs by a substantial margin.

A direct cost is a cost directly related to the production of a specific good or service. The direct cost can be traced back to the product and is directly attributable to the per unit of product. Some direct costs are raw material (direct material), labor (direct labor), manufacturing supplies, and wages for the production staff.

Some of the direct costs incurred by TRIFOODS are direct material 32%, direct labor 25%, manufacturing supplies 23% and wages for production staff 20%. (all of the percentages of different direct costs are taken if the direct cost is considered to be 100%)

An indirect cost is a cost that are not directly traceable to the product or is indirectly attributable to the product, some of the examples of indirect expenses are accounting and legal expenses, office expenses, factory overheads, and selling expenses

Some of the indirect costs that TRIFOODS incurred are administrative salaries 20%, factory overhead 40%, Office expenses 20%, selling and administrative expenses 20%.(all of the percentages of different indirect costs are taken if the indirect cost is considered to be 100%)

Indirect comparison between direct and indirect cost, the direct cost outweighs the indirect costs by a substantial margin.

Variable cost is the cost associated with the number of goods a company produces to simplify further; it can be said that it is the cost that varies with the extra per unit of production. Some examples of variable costs are direct materials, production supplies, direct labor, and sales commissions.

TRIFOLD also incurred variable costs, and according to data, 50% of the expenses incurred in the company are variable costs, including the examples mentioned above.

Fixed cost is the cost incurred by businesses that do not vary with production volume to simplify this further. It can be said that fixed costs are those costs that remain unaffected by a change in the level of production, unlike variable cost fixed cost does not change. As every business incurred a fixed price, TRIFOLD is no different; it incurred many variable costs such as Rent, insurance, utilities, taxes, and salaries. According to data, 45% of the expenses incurred are fixed prices.

Mixed cost are those costs that contain a portion of both variable and fixed cost, to certain

extent, for example, to better help us understand this we can say telephone line, has a

fixed Rent, but as the usage increases, more charges will be incurred.

TRIFOLD incurred a series of mixed costs but less compared to variable and fixed
Those Things include telephone bills and gas bills.

The graphical representation compares fixed, mixed, and variable cost, with 45% being variable cost, 50% being fixed price and 5% being mixed cost.

TRIFOODS has always believed in providing quality over quantity and has thus followed its motto however, providing quality items can be costly to business and can cause unnecessary expenditure if not considered and not appropriately monitored. For more having the detailed costing analysis Visit Besturate. As of right now, the most significant issue in maintaining cost is the fluctuation of dollar, as the dollar rates fluctuate against Pakistani rupees, raw material and other expenditures tend to get expensive for the company which the company has to bear while providing quality lowering its profits, another major issue as production cost, which tends to increase if the waste is not put to fair use and timely recycling is not done. Lastly, with changing times, new strategies have to be implemented to ensure the process is as efficient as possible to lower costs.

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amy pohwani
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amy pohwani

Content Curator
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