COST & MANAGERIAL ACCOUNTING

PROJECT REPORT
ON CEMENT INDUSTRY

MADE BY:
USMAN IDREES (4180)
SOHAIB ASIF (4195)
ZUBAIR AHMED (4173)
JAWWAD UR REHMAN (4161)
COMPARISON OF PRODUCT & PERIOD COST:

BESTWAY KOHAT
2009 2008 2007 2009 2008 2007
Product cost 3204 2548 2172 3703 3193 2649
Period Cost 471 158 64 193 147 123
FLYING MAPLE LEAF
Year 2009 2008 2007 2009 2008 2007
Product Cost 7946 10356 2411 3317 2878 2672
Period Cost 273 599 45 794 447 115
BESTWAY CEMENT KOHAT CEMENT

3500 4000

3000 3500
3000
2500
2500
2000 Product Cost
2000 Product cost
Period Cost
1500 Period Cost
1500
1000 1000
500 500

0 0
2009 2008 2007 2009 2008 2007

FLYING CEMENT MAPLE LEAF

12000 3500

10000 3000

8000 2500

6000 2000
Product cost Product cost
Period Cost 1500 Period Cost
4000
1000
2000
500
0
2009 2008 2007 0
2009 2008 2007
ANALYSIS:
PRODUCT:
The Product cost of Best way Cement is the highest compared with
other three although there is a little difference between Bestway and
Maple Leaf's product cost. Product cost has increased because the total
Overhead cost of both the companies has increased from past years.
The Product cost of Flying cement had decreased in 2008 because it
faced loss but the company recovered in 2009.Kohat Cement's Product
cost has not increased sharply and has increased steadily because of
relatively same level of production and MOH costs. Major product cost
of all the four cement companies in this category is fuel and power
cost. Fuel and Power cost has increased for all four companies adding
much expense amount to the accounts.

PERIOD COST:

In all three years the period cost of Kohat and Flying Cement has
remained relatively same. Bestway Cement's cost has increased
because distribution cost has increased very much over the years.
Maple leaf's Period cost has increased sharply due to sharp increase in
distribution cost from 2007. The other major cost for all the four
companies is the administrative cost. The most increase in
administrative cost was seen by Bestway cement and Maple Leaf
Cement.
COMPARISON OF FIXED COST AND VARIABLE COST:
BESTWAY KOHAT
Year 2009 2008 2007 2009 2008 2007
V.COST 3425 2471 1958 3400 1698 2661
F.COST 251 235 278 497 565 517
FLYING MAPLE LEAF
Year 2009 2008 2007 2009 2008 2007
V.COST 7173 8477 2256 3715 2854 2360
F.COST 1046 2479 201 397 271 426

Bestway Cement Kohat cement

4000 4000
3500 3500
3000 3000
2500 2500
2000 Fixed 2000 Fixed cost
1500 Cost 1500 Variable cost

1000 1000
500 500
0 0
2009 2008 2007 2009 2008 2007

Flying cement Maple leaf cement

9000 4000
8000 3500
7000 3000
6000 2500
5000
Fixed cost 2000 Fixed cost
4000 Variable cost Variable cost
1500
3000
1000
2000
1000 500
0 0
2009 2008 2007 2009 2008 2007
Analysis:
Variable cost is bigger cost as compared to Fixed cost for all the
companies . The Highest variable cost in all the four companies
is of flying cement . The biggest fixed cost is depreciation. The
variable cost of Bestway Cement & Maple Leaf has been
increasing gradually over the years where as kohat cement and
Maple lead variable cost has seen abnormal trend. Kohat
Cement’s variable cost decreased considerably in 2008 whereas
flying cement’s variable cost increased sharply in 2008 which is
one of the causes for the loss the company showed in 2008.
COMPARISON OF BREAKEVEN& TOTAL SALES :
BESTWAY KOHAT
Year 2009 2008 2007 2009 2008 2007
BREAKEVEN(UT
) 729170 1822985 1015134 167827 238920 185472
SALES(000) 14815000 7487000 5649000 3396000 1372000 1554000
FLYING MAPLELEAF
Year 2009 2008 2007 2009 2008 2007
BREAKEVEN(UT
) 555154 35061 65783 1086912 1254981 659810
SALES(000) 666000 158000 1179000 15251000 7816000 3711000
BESTWAY CEMENT KOHAT CEMENT
6000000 4000000
3500000
5000000
3000000
4000000
2500000
2009 2009
3000000 2000000
2008 2008
2000000 2007 1500000 2007
1000000
1000000
500000
0 0
B.E(T) SALES B.E(T) SALES

FLYING CEMENT MAPLE LEAF

1400000 18000000

1200000 16000000
14000000
1000000
12000000
800000 2009 10000000 2009
2008 8000000 2008
600000
2007 2007
6000000
400000
4000000
200000
2000000
0 0
B.E(T) SALES B.E(T) SALES
ANALYSIS:
BREAKEVEN (UNITS)
The breakeven of maple leaf and Bestway had increased in 2008 from
2007 because profit margin of both companies had decreased however
in 2009 breakeven decreased because of increased profit margin .The
breakeven of Kohat cement has however remained constant increasing
a little in 2008.Flying cement faced a loss in 2008 therefore in 2009
profit margin of Flying cement has decreased.

FINANCIAL PERFORMANCE DURING 2007-2009

COMPANY Bestway cement KOHAT CEMENT
YEAR 2009 2008 2007 2009 2008 2007
Total sales 14815 7487 5649 3396 1372 1554
Less v.cost 11160 6575 4317 2491 1044 1193
C.M 3655 912 1332 905 328 361
LESS F.COST 818 625 614 364 253 274
O.I 2837 287 718 541 75 87

COMPANY FLYINGCEMENT MAPLE LEAF CEMENT

YEAR 2009 2008 2007 2009 2008 2007
Total sales 666 158 1171 15251 7816 3711
LESS V.COST 650 327 1066 11653 6100 2801
C.M 16 -169 105 3598 1716 910
LESS F.COST 95 96 95 1247 1007 506
O.I -79 -73 10 2351 709 404
Note: All amounts are in Rupees in MILLIONS.
DEGREE OF OPERATING LEVERAGE:
COMPANY BESTWAY KOHAT FLYING MAPLE LEAF
YEARS 2009,2008, 2009,2008, 2009,2008, 2009,2008,
2007 2007 2007 2007
DOL 1.28,3.17,1.8 1.67,4.37,4.1 -.20,2.31, 1.53,2.42,2.25
5 4 10.5

ANALYSIS

Dol represents how much debt a company is using in its operations. As

we can see from the table that flying cement’s leverage is showing
negative sign which represents that the company has significantly
reduced its debt from previous year. Kohat cement’s leverage is the
highest as compared to all other companies although it has reduced its
leverage over the years from as high as 4.37 to a low of 1.67. Bestway
cement’s Leverage saw an increase in 2008 but has reduced in 2009.
Maple leaf has consistently reduced its leverage from 2007.