Professional Documents
Culture Documents
Kapeel Kumar
COST ACCOUNTING
FINAL PROJECT
SUBMITTED
TO:
A
MIR FEROZ SHAMSI
Submission
Date: Feb, 21-2010
TABLE OF CONTENTS
1) Acknowledement ………………………………………………...3
2) Letter of transimittal..…………………………….........................4
3) Introduction………………………………………………………5
4) Type Of Product…………………………………………………6
5) Raw Material……………………………………………………..6
7) Factory Overhead………………………………………………...7
8) Processes………………………………………….....................8, 9
9) Costing Sheets……………………………………..…………10,11
10) References……………………………………..…………….…12
Acknowledgement
By the grace of Almighty God, we have successfully completed our project on the
“Process Costing”.
The main aim of this project is to understand the working and manufacturing costing
activities. We chose TOWEL as it has the different processes and has a vast learning of
manufacturing activities. The project is competently under the guidance and according to
the teachings of our respectable teacher Mr. Amir Feroz Shamsi. We are grateful to him
for providing us an opportunity to learn the sensible issues involved in the manufacturing
a Product.
-3-
Letter of Transmittal
Dear Sir,
During the course, we were required to prepare a report on the Product Costing.
By the grace of God, we have completed this project successfully and as per your
instructions the same is being submitted to you. We hope that this report will give some
essential benefits and guidelines to those people who want to explore the field of
TEXTILES INDUSTRY specially in towel range.
Genuinely,
Kapeel kumar.
-4-
INTRODUCTION
DZEE TEXTILES has incorporated its operation since last 3 years and engages in many
manufacturing product lines, but we have selected one of its demanding product Bath
Towel (Legend Plus) 24 x 48 size. Its factory is situated in the Site Area Karachi but they
sell their product in the US market.
MANUFACTURING
At D-Zee Textiles each product is manufactured from finest quality of materials on state
of the art weaving looms. Our linens are processed on modern continuous bleaching
machines on strict hospitality standards and each product is carefully engineered to
withstand institutional laundering.
For years the hospitality industry has relied on D-Zee Textiles to provide an exceptional
collection of Towels, Bedding, Pool Towels, and Table Linen & Room Amenities for
Hotels, Motels, Resorts, Cruise Lines, Health Clubs, Salons and Spas.
D-Zee Textiles manufactures what we sell. Our products are manufactured in our state of
the art manufacturing facilities from finest materials under strict quality control systems.
This enables us to deliver superior quality products directly to end customers at highly
competitive prices. So when you buy from D-Zee Textiles you are able to reduce your
annual linen purchasing budget significantly.
-5-
TYPE OF PRODUCT: “TOWEL“
Detail:
Towel (Legend Plus) made with premium long staple Egyptian cotton yarn this is one of
the finest and softest towel for upscale institutional use. The ultimate in luxury. 86%
Cotton 14% Polyester Made from fine long staple yarn, Legend Plus towels are
engineered for high absorbency softness and durability. Each towel has a classic dobby
for a luxurious look.
Specification:
RAW MATERIAL:
D-ZEE Textiles Purchases 600 dozens Bath Towel in Gray form from its Local Suppliers
in a month and 7,200 dozens in a year.
The Company purchases the following material for use into further process and considers
all the material as direct material:
Thread:
The company purchases thread as per its yearly requirement. Thread is used of Rs.1 per
dozen. 1 X 600 X 12 = 7,200 in a year.
Label:
The company purchases Label as per its units of production. 1 label is required for 1 piece
of towel. Company purchases 8,640 labels in a year. (12X600X12)
Carton:
1 carton is used in 4 dozen of towel. Company purchases 1800 carton in a year.
-6-
LABOUR:
Direct Labour
Direct Labour is involved in cutting and stitching the towel one by one through
Machines and scissors @ Rs.18.96 per dozen and Rs.1.58 per towel.
Direct Labour in the Bleaching department is paid @ Rs.20 per dozen.
Direct Labour involved in Packing is paid @ Rs.3 per dozen
Indirect Labour
Loaders are involved in carrying the goods from one department to another
department. And these workers are hired on daily wages.
Supervisors are involved in the checking and supervise the work and get fixed
monthly salary.
FACTORY OVERHEAD:
Company has estimated to apply 10% Factory Overhead of the Prime cost in all
departments for all different sizes of Towels. Any change in Factory Overhead
will increase/decrease the margin of the company.
Company allocates 2% wastage in the Cutting department.
Rent
Utilities Bills
Indirect Labour:
Supervisor Salary
Loaders Charges
Wastage (Cuting Loss 2%)
Machine Repair and maintanance
Depriciation
Insurance
SELLING PRICE:
Company has set the market Based competitive price and it earns 29% margin on its total
cost.
-7-
PROCESS:
Company first purchases the Towel in Gray Colour and then further processes it into the
following three processes.
1. Bleaching
2. Cutting and stitching
3. Packing and Insepection
This process is carried out to remove the gray colour towel which could not be removed
by scouring. In bleaching process company use sodium hypochlorite, sodium cholorite
and mainly hydrogen peroxide.
Although bleaching of cotton towel are commonly carried out in alkaline surrounding.
Bleaching gave better resistance to piling and dimensional stability, better mechincal
properties than those scoured by alkaline.
-8-
PROCESS -2: CUTTING AND STITCHING
Longitude cutting
Longitude Hemming
Cross cutting
Cross Hemming
These processes are achieved by using scissor and standard sewing machines by worker
or by machines specialized in towel cutting or sewing or even by automatic machines
which can be carried out some or all process mentioned above.
Length wise cutting machines are used for the 1st step of this process. Longitudinal
cutting of towel which has been produced on the weaving loom as several panels joined
side by side. In these machines there are several cutters which cut lengthwise between
adjacent towel panels in order to separate them. The cutting process carried out by means
of a pressing blade on a motorized role in the lengthwise cutter.
After cutting and stitching, all the towels are inspected for the quality and after
inspection, towels are sent for packing.
-9-
REFERENCES
- 10 -