Step 1: Understanding the Concept:
Different dairy products have different cost structures.
The material cost varies among products.
Step 2: Key Formula or Approach:
No specific formula.
Need to know the economics of dairy products.
Step 3: Detailed Explanation:
Paneer has the highest material cost in comparison to sale price.
This is because it requires more milk per kg of product.
Gulabjamun, Khoa, and Sandesh have lower material costs.
Thus, Paneer has the highest material cost.
Step 4: Final Answer:
Paneer incurs the highest material cost.
Hence, the correct option is (D).