Assignment Assessment Report

Campus: DSF Year/semester 2010-2012/@nd sem

Level: Core Assignment Type Assignment B
Module Name: CMBC Assessor’s Name Miss.Monica Gupta
Reqd Submission
Student’s Name: Sabyasachi roy
Date
Sroy1984@hotmail. Actual Submission
e-mail id & Mob No
com , 9999970459 Date
Stream PGDBM Submitted to : Miss.Monica Gupta

Certificate by the Student:

Plagiarism is a serious College offence.
I certify that this is my own work. I have referenced all relevant materials.
(Studen
t’s Name/Signatures)
Expected Assessment Grade Feedback
Outcomes Criteria based on
D,M,P,R
system
General Parameters
Clarity Clear
understanding
of the concept
Analytical Ability to
Thinking- analyze the
problem
realistically
Research Done- Research carried
out to solve the
problem
Formatting & Concise& clear
Presentation- thinking along
with
presentation
Subject Specific Parameters

Achieved Yes/No
Grades Grade Descriptors
(Y / N)
A Pass grade is achieved by meeting all the requirements
P
defined.
Identify & apply strategies/techniques to find appropriate
M
solutions
D Demonstrate convergent, lateral and creative thinking.

Assignment Grading Summary (To be filled by the Assessor)

OVERALL ASSESSMENT
GRADE:
TUTOR’S COMMENTS ON
ASSIGNMENT:
SUGGESTED MAKE UP PLAN
(applicable in case the
student is asked
to re-do the assignment)
REVISED ASSESSMENT
GRADE
TUTOR’S COMMENT ON
REVISED
WORK (IF ANY)
Date: Assessor’s Name / Signatures:

Assignment B

Ques 1 : Each student will be given one of the under mentioned industry for
assignment work.

• Education Industry
• Manufacturing Industry
• Hospital Industry
• IT Industry
• Transport Industry

The students will have to visit a company from the assigned industry, meet
the Accounts person and do the following:-

a. Find out and understand the Cost procedures followed by the company.
b. If possible get a sample of cost sheet or Statement of Accounts

A presentation on the above and recommendation for areas of improvement

has to be made.

Answer :-
Manufacturing Industry
Nestle” India
Profile:
Nestle India is a subsidiary of Nestle S.A. of Switzerland. Nestle India
manufactures a variety of food products such as infant food, milk products,
beverages, prepared dishes & cooking aids, and chocolates & confectionary.
Some of the famous brands of Nestle are Nescafe, Maggi, Milkybar, Milo, Kit
Kat, Bar-One, Milk maid, Nestea, Nestle Tomato ketchup, Nestle Milk,Nestle
Fresh 'n' Natural Dahi and NESTLE Jeera Raita

Cost procedure followed in Nestlé India Ltd.-

Tomato ketchup & Chocolates:-

A company’s production process helps in determine the best way of

accounting for its costs. Process costing works well whenever relatively
homogeneous products pass through a series of processes and they receive
similar amount of manufacturing costs. Nestle accounts for its vast chocolate
chips production by using a process costing system.

Sequential Processing: The units typically pass through a series of

manufacturing or producing departments, in each departments or process is
an operation that brings the product one step closer to completion.
Parallel Processing: This pattern require two or more sequential processes
to produce the finished goods. Partially completed units are worked on
simultaneously in different processes and then brought together in a final
process for completion.

FLOW OF MANUFACTURING COSTS THROUGH THE ACCOUNTS OF

PROCESS COSTING
(Tomato Ketchup)

Picking Department Flavoring Department Bottling Department

Work in Progress Work in Progress Work in Progress

Materials: Transferred in from

Transferred in from
Fresh tomatoes Flavoring (includes
picking (includes all
Sugar all manufacturing
manufacturing costs)
Salt costs from picking
Distillation – and flavoring)
Materials:
Vinegar
Ketchup
Spices Materials:
Flavoring Labour
Bottles
Applied Overhead
Picking labour Bottling Labour
Applied Overhead Applied Overhead

COST SHEET
Nestle India Ltd. (Chocolates)

Total output= 4,50,000 units

Particulars Cost per unit Total Cost
Raw Material:
Cocoa Butter=3,00,000
Sugar=3,00,000
Cocoa Solids= 3,20,000
Peanuts= 2,00,000 5.16 23,20,000
Chocolate coated resins= 4,00,000
Almonds= 3,00,000
Vanillin= 1,00,000
Honey=50,000
Boston Baked Bean= 1,50,000

Direct Labour=7,00,000 1.56 7,00,000

Carriage on Material= 2,42,500 0.53 2,42,500
Prime Cost 7.25 32,62,500
Factory Expenses:
Fixed:
Depreciation on Plants &
Machinery=2,57,500
Rent= 1,50,000
Power & Consumables
Stores=1,50,000
Factory insurance=1,50,000
Supervisors Salary=50,000 2.35 10,57,500

Variable:
Electricity charges=50,000
Power & Consumable stores=1,00,000
Running Expenses of
machines=1,50,000
Factory Cost 9.60 43,20,000
Office Administration Expenses
Office staff salary=10,00,000
Rent= 80,000
Computer=1,20,000
Furniture=3,00,000 4.40 19,80,000
Telephone= 10,000
Carriage outward=20,000
Depreciation on furniture=50,000
Salaries of administrative =3,70,000
Rent, rates & taxes=30,000
Office and Administration costs 14.00 63,00,000
Selling & Distribution Expenses
Advertisement(print & local TV
channel)=4,00,000
Petrol=1,00,000 2.00 9,00,000
Delivery Vehicles=2,50,200
Maintenance of delivering
Vehicles=2,50,200
Packing rates= 50,000
Bad Debts written off= 1,00,000

Total Cost 16.00 72,00,000

Net Profit (20% on selling price) 4.00 18,00,000

Sales
20.00 90,00,000
Ques 2 :
1. Discuss the technique of marginal costing as a key for management
problems.
2. The following is the trading and profit and loss account of M/s Prem
Industries for the year ended 31 st March 2000.

To Material consumed 708000 By Sales 30000 units 1500000

By Finished Stock (1000
To Direct wages 371000 units) 40000
To Works overhead 213000 By work-in-progress
To Administration overheads 95500 Material 17000
To Selling & distribution
overheads 113500 Wages 8000
To Net profit for the year 69000 Works Overhead 5000

157000
0 1570000

In manufacturing a standard unit, the company’s cost records show that:

a. Work overhead have been charged to work-in-progress at 20% on prime

cost.
b. Administration overheads have been recovered as Rs.3 per finished unit.
c. Selling and distribution overheads have been recovered as Rs.4 per unit
sold.
d. The under-absorbed or over-absorbed overheads have not been adjusted
into the costing P & L a/c.

Prepare:

1. A costing profit & loss account indicating net profits.

2. A Statement reconciling the profit as disclosed by the cost accounts and
that
Shown in the financial accounts.

Answer :-
COSTING PROFIT AND LOSS ACCOUNT
Particulars Amount Particulars Amount(R
(Rs.) s.)

To Material 7,08,00 By Sales 15,00,000

Consumed 0

To Wages 3,71,00 By Closing

0 Stock
 To Work 2,15,80 Finished 40,000
Overhead 0 Good

To 93,000 WIP 30,000

Administrative
Overhead

To Selling & 1,20,00

Distribution 0

To Net Profit 62,200

Total 15,70, Total 15,70,00

000 0

Working Note:
Cost Sheet
Particulars Amount
Material 708000
Wages 371000
Prime Cost 1079000
Add: Factory/Work Overhead 215800
Less: Closing Stock of WIP 30000
Factory Cost/Work Cost 1264800
Add: Administrative Overhead 93000
Cost of Production 1357800
Less: Closing Stock of finished goods 40000
Cost of Goods Sold 1317800
Add: Selling & Distribution Expense 120000
Cost of Sales 1437800
Add: Profit 62200
Sales 1500000

Reconciliation Statement
Profit as per costing P&L statement 62200

Add: over absorbed overhead/expenses

excess Factory /work overhead 2800

over absorbed selling & dist. Expenses 6500 9300

71500

Less: Under absorbed overhead/expenses

 under absorbed administrative expenses 2500
Profit as per financial Accounts 69000

Calculation of Finished Good units during the year & Administration

overhead during the year:
Total Finished good units during the year = Unit sold-Opening stock + Closing
stock
= 30000 - 0 + 1000
= 31000
Administration overheads have been recovered as Rs.3 per finished unit
= 31000*3
= 93000

Ques 3 :

Work out in appropriate cost sheet from the unit cost per passenger km for
the year 2006-07 for a fleet of passenger buses run by a Transport Company
from the following figures extracted from its books.

5 passenger buses costing Rs.50000, Rs. 120000, Rs. 45000, Rs.55000 and
Rs.80000 respectively. Yearly depreciation of vehicles 20% of the cost.
Annual repair, maintenance and spare parts – 80% of depreciation. Wages of
10 drivers @ Rs.100 each per month, wages of Rs.20 cleaners @ Rs. 50 each
per month. Yearly rate of interest @ 4%on capital. Rent of six garages @
Rs.50 each month. Director’s fees @ Rs.400 per month, office establishment
@ Rs.1000 per month, licences and taxes @ Rs.1000 every six months,
realization by sales of old tyres and tubes @ Rs.3200 every six months, 900
passengers were carried over 1600 kms during the year.

Answer :-
Cost of buses= Rs. 50,000 + 1, 20,000 + 45,000 + 55,000 + 80,000
= Rs. 3, 50,000

Yearly Depreciation (20% of cost) = Rs. 70,000

Yearly Repairs (80% of Depreciation) = Rs. 56,000

Operating Cost- Sheet

For the year 2006-07

Particulars Amount (Rs.) Amount (Rs.)
(A)Standing Charges
Wages of 12,000
drivers(10x100x12)
Wages of cleaners 12,000
(20x50x12) ____________ 24,000

Interest(4% on capital) 14,000

Directors 4,800
fees(Rs.400x12)
Licence & Taxes(Rs. 2,000
1000x2)

Office establishment(Rs. 12,000

1000x12)
Garage rent(6x50x12) __ 3,600
60,400
(B) Maintenance Charges
Repairs, Spare parts etc. 56,000
(-) Sale proceeds from 6,400
old tyres & tubes
___________
]= 49,600
(C) Operating Charges
Depreciation 70,000
Total(A+ B + C) 1,80,000
(E)Passenger Km. 14,40,000
Carried(900x1600)

(F) Cost per passenger Km.

Rs.(1,80,000/14,40,000) 0.125