Swetha

A STUDY ON COST MANAGEMENT PRIVATE LIMITED
BIRDY EXPORTS
INDUSTRIAL REVEIW INTRODUCTION

The textile industry is undergoing a major reorientation towards non-clothing applications of textiles, known as technical textiles, which are growing roughly at twice rate of textiles for clothing applications and now account for more than half of total textile production. The processes involved in producing technical textiles require expensive equipments and skilled workers and are, for the moment, concentrated in developed countries. Technical textiles have many applications including bed sheets; filtration and abrasive materials; furniture and healthcare upholstery; thermal protection and blood-absorbing materials; seatbelts; adhesive tape, and multiple other specialized products and applications. The Indian Textile industry has been undergoing a rapid transformation and is in the process of integrating with the world textile trade and industry. This change is being driven by the progressive dismantling of the MFA and the imperative of the recently signed General Agreement Trade & Tariff. In this bold, new scenario, India has to move beyond its role of being a mere quota satisfying country
HISTORY OF TEXTILE:
The history of textile is almost as old as that of human civilization and as time moves on the history of textile has further enriched itself. In the 6th and 7th century BC, the oldest recorded indication of using fiber comes with the invention of flax and wool fabric at the excavation of Swiss lake inhabitants. In India the culture of silk was introduced in 400AD, while spinning of cotton traces back to 3000BC. In China, the discovery and consequent development of sericulture and spin silk methods got initiated at 2640 BC while in Egypt the art of spinning linen and weaving developed in 3400 BC. The discovery of machines and their widespread application in processing natural fibers was a direct outcome of the industrial revolution of the 18th and 19th centuries. The discoveries of various synthetic fibers like nylon created a wider market for textile products and gradually led to the invention of new and improved sources of natural fiber. The development of transportation and communication facilities facilitated the path of transaction of localized skills and textile art among various countries. OXFORD 1 COLLEGE OF BUSINESS MANAGEMENT
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TEXTILE HISTORY IN INDIA:

Indian textile enjoys a rich heritage and the origin of textiles in India traces back to the Indus valley Civilization where people used homespun cotton for weaving their clothes. Rig-Veda, the earliest of the Veda contains the literary information about textiles and it refers to weaving. Ramayana and Mahabharata, the eminent Indian epics depict the existence of wide variety of fabrics in ancient India. These epics refer both to rich and stylized garment worn by the aristocrats and ordinary simple clothes worn by the common people. The contemporary Indian textile not only reflects the splendid past but also cater to the requirements of the modern times. The textile industry occupies a unique place in our country. One of the earliest to come into existence in India, it accounts for 14% of the total Industrial production, contributes to nearly 30% of the total exports and is the second largest employment generator after agriculture. Textile Industry is providing one of the most basic needs of people and the holds importance; maintaining sustained growth for improving quality of life. It has a unique position as a self-reliant industry, from the production of raw materials to the delivery of finished products, with substantial value-addition at each stage of processing; it is a major contribution to the country's economy. Its vast potential for creation of employment opportunities in the agricultural, industrial, organized and decentralized sectors & rural and urban areas, particularly for women and the disadvantaged is noteworthy. Although the development of textile sector was earlier taking place in terms of general policies, in recognition of the importance of this sector.
The Textile and Apparel supply chain
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GROWTH OF INDIAN TEXTILE INDUSTRY 2009-10

The year 2009-10 was a challenging year for the Indian textiles industry. Even as the Indian economy recovered rapidly from the slowdown caused by the global financial crisis, inflationary trends and volatility in commodity prices led to strong demand side pressures. Against this backdrop, the Ministry of Textiles, under the dynamic and visionary leadership of Thiru. Dayanidhi Maran conducted policies to achieve faster and inclusive growth and participatory development. The objective was to maintain the incipient export growth momentum, increasing production and productivity in cotton and cotton yarn, enhancing value addition in garmenting and apparel sectors, promoting rich heritage of handlooms and handicrafts, institutional strengthening in jute sector, and enhanced acreages under mulberry production and safeguarding employment opportunities. The strength of Indian economy has been optimally leveraged for attracting larger capital flows and foreign direct investment. The Government, besides providing fiscal stimulus, increased the plan allocation from Rs 4,090 crore to Rs 4,500 crore, encompassing an enhanced allocation of Rs 3,140 crore for Technology Up gradation Fund Scheme (TUFS). These measures enabled the textile industry to face the recessionary conditions. As the year came to an end it became evident that cotton yarn and cotton exports had recovered significantly. Additional stimulus packages were extended to handlooms and garments sector to help cushion the recessionary impact. Programmes for modernization of handlooms, powerlooms, handicrafts, and sericulture and wool sector were launched. The welfare and well being of workers was ensured, particularly those engaged in decentralized sectors through rigorous implementation of social security and health insurance programmes. Substantial efforts have also been made to bridge the skill deficit in textiles sector by conceptualizing a flagship programme called the Skill Development Programme to improve the skill base of 30 lakh workers employed in the sector over a five year period. The fundamental strength of this industry flows from its strong production base of wide range of fibers / yarns from natural fibers like cotton, jute, silk and wool to synthetic OXFORD 4 COLLEGE OF BUSINESS MANAGEMENT
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/man-made fibers like polyester, viscose, nylon and acrylic. Therefore, a brief explanation about the growth of these sectors during 2009-2010 is given below.
COTTON SECTOR:
Cotton is one of the principal crops and a major raw material for the textiles industry. India has traditionally been a cotton surplus country. The production in the cotton season 2009-10 (October - September) is expected to increase to 292 lakh bales, compared to 290 lakh bales in the cotton season 2008-09. Despite adequate opening stock of 71.5 lakh bales at the inception of the current cotton season, the domestic demand coupled with rising demand for exports from China and other countries has resulted in an unprecedented increase in prices of cotton by 35 percent and of cotton yarn by 25 percent, creating supply line distortions and inadequate availability of yarn to the domestic garment industry. TABLE 1: TABLE SHOWING THE COTTON BALANCE SHEET FOR THE YEAR 2008-09 AND 2009-10 ITEM DECEMBER-2009 SUPPLY OPENING STOCK CROP SIZE IMPORTS TOTAL AVAILABILITY DEMAND MILL CONSUMPTION SMALL-MILL CONSUMPTION NON-MILL CONSUMPTION TOTAL OXFORD 5 COLLEGE OF 250.00 BUSINESS 250.00 MANAGEMENT 20.00 20.00 23.00 23.00 207.00 207.00 71.50 295.00 7.00 373.50 71.50 292.00 7.00 370.50 APRIL-2010
A STUDY ON COST MANAGEMENT PRIVATE LIMITED CONSUMPTION EXPORTS TOTAL DISAPPEARANCE CARRY FORWARD 68.50 55.00 305.00
BIRDY EXPORTS
80.00 330.00
40.50
QUALITY IN LAKH BALES (170KG EACH)
ANALYSIS:
By the above table, we can analyze that the crop size have been decreased to 292.00, further the total availability of the crop also decreases to 370.50 from 373.50. Hence, we can say that the overall supply has decreased when we make a comparison of April-2010 with December-2009. In case of demand, it has been increased from 305.00 to 330.00 as the exports have been increased from 55.00 to 80.00, at the same time Total consumption remains the same. MEASURES TAKEN TO STABILIZE PRICES OF COTTON AND COTTON YARN The Government took the following steps to stabilize the prices of cotton and cotton yarn and improved supply chain management:
Imposition of export duty of Rs. 2,500 per MT on cotton exports from the country
w.e.f. April 09, 2010 to ensure carry forward of 50 lakh bales from the cotton season of 2009-10. Registration of yarn exports notified effective from April 9, 2010, for monitoring Withdrawal of DEPB incentives on cotton yarn exports and withdrawal of Duty data on yarn exports on real time basis. Drawback of 4%.
SERICULTURE AND SILK SECTORS:

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India is endowed with all four varieties of silk: Mulberry, Eri, Tasar and Muga and the country is the second largest producer of silk in the world, contributing about 15% to the total world raw silk production. The focus of the Government is to increase the productivity and to make Indian silk comparable to that available internationally. Research and Development 50 research projects were concluded resulting in generation of viable technologies and increasing the number of patents to the credit of Central Silk Board, Bangalore.
Catalytic Development Programme The Flagship Programme
2,40,300 beneficiaries were covered under the Women Health Insurance Scheme. Mulberry acreage expanded from the existing1.78 lakh hectares to around 1.90 lakh hectares Establishment of three Automatic reeling units in Mulberry and one Spun silk mill in Eri sectors in Chhattisgarh Exports:
Export earnings from silk goods for the period April-Dec-2009 were Rs.2, 123.86 crore. Employment:
The employment has increased by 5.6% i.e. to 65.86 lakh in 2009-10 as compared to 2008-09. Two Eri Spun Silk Mills, one at Kokrajhar (BTC, Assam) and the other at Chyagaon (Assam) were inaugurated creating forward linkage for the Eri cocoons produced in the State. Popularization of Silk Mark:
22 lakhs quality labels sold 6 exclusive silk expos organized in various Indian cities. TABLE 2: TABLE SHOWING RAW- SILK PRODUCTION FOR THE YEAR 2008-09 AND 2009-10
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A STUDY ON COST MANAGEMENT PRIVATE LIMITED SILK SECTOR MULBERRY ERI TASAR MUGA TOTAL RAW SILK PRODUCTION 2008-2009 15,610MT 2,038MT 603 MT 119MT 18,370 MT 2009-2010 16,315MT 2,460MT 720MT 105MT 19,600 MT
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PERCENTAGE INCREASE 4.516 20.70 19.4 (-)11.76 6.70
ANALYSIS:
With the help of above table, we can analyze that all over silk production is showing an upward trend as there is increase in MULBERRY, ERI and TASAR upto 4.516%, 20.70% and 19.4% respectively, but there is a decrease in the production of MUGA upto -11.76% and the overall production increases from 18370 MT to 19600 MT which truly shows a positive sign towards silk production. WAY FORWARD
Expansion of mulberry acreage from the existing 1.90 lakh hectares to around Additional 9,750 hectares to be brought under the irrigation net. 45 certified multi-end reeling units to be set up in major reeling clusters. 4 automatic reeling units to be set up in Mulberry and one Spun silk mill in Eri COLLEGE OF BUSINESS MANAGEMENT
2.13 lakh hectares.
sectors. OXFORD 8
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451 handlooms to be replaced and around 1,860 loom to be upgradated. CSB in association with Indian Space Research Organization (ISRO), Bangalore
will take-up.
MAN-MADE FIBRES SECTOR:

India is the second largest producer of manmade fibers (MMF) in the world (World Fiber Report 2008). In Indian context, out of a total consumption of 4.74 billion kgs. Of fiber, including cotton and man-made, 2.09 billion kgs, i.e. 44% is manufactured by the manmade fiber and yarn industry. Textiles made of man-made fibers constitute about 16.4% of Indias total textiles exports. WAY FORWARD
The domestic fiber consumption ratio in India at present is 41:59 (FY09) in
favour of cotton, while it is almost 60:40 globally. The global fiber consumption trend in future is likely to further tilt in favor of man-made fibers as there is a limitation to growth of cotton on account of limited availability of land for cotton cultivation.
The impending National Fibre Policy will go along way in driving the growth of
the Indian textile industry in the future, both in domestic as well as export markets.
TABLE 3 TABLE SHOWING THE
PRODUCTION OF MAN-MADE
TEXTILES FOR THE YEAR 2008-09 AND 2009-10: PARTICULARS 200809 Manmade fiber Manmade filament yarn Total 2,484 2,786 12.16 1,066 1,418 1,266 1,520 2009-10 PERCENTAGE INCREASE 18.76 7.19
ANALYSIS:
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By the above table, we can analyze that the Man-Made Textiles production has a positive growth for the year 2009-10 when we compare to the year 2008-09 about 12.16% as there is an increase in Manmade fiber and Manmade filament upto 18.76% and 7.19% respectively. GRAPH 1: Graph showing the production of man-made textiles for the year 200809 and 2009-10
INTERPRETATION:
With the above graph, we can make an interpretation that the Manmade fibre has increased from 1066 to 1266 (that is , there is an increase upto 18.76% from 2008-09 to 2009-10) and in the same way the man-made filament yarn has increased from 1418 to 1520 (that is , there is an increase upto 7.19% from 2008-09 to 2009-10). Thereby , the overall production of Manmade fiber has an upward trend. TABLE 4: TABLE SHOWING EXPORTS OF MAN MADE FIBER FOR THE PARTICULARS 2008-09 2009-10 PERCENTAGE CHANGE Manmade fiber Manmade filament yarn 79,913 70,719 99,050 62,827 23.95 -11.16
Total
1,50,632
1,61,877
7.47
Rupees in lakhs. YEAR 2008-09 AND 2009-10
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Graph 2: Graph showing the exports of Manmade fiber and Manmade filament yarn for the year 2008-09 and 2009-10
ANALYSIS:
By the above table we can analyze that the exports of Manmade fiber has increased from 200809 to 2009-10 which shows a positive trend ( that is , the percentage increase is 23.95% when we compare with the year 2008-09), But the exports of Manmade filament yarn has decreased upto -11.16% due to this the overall exports of Manmade fibre shows less percentage change upto 7.47%.
INTERPRETATION:
With the help of above graph, we can make an interpretation the the exports of Manmade fiber has increased from 2008-09 to 2009-10 (that is, from 79913 to 99050 which shows a positive trend. But the exports of Manmade filament yarn has decreased upto -11.16% ( that is, from 70719 to 62827 which shows a downward trend).
JUTE SECTOR:
Jute, the golden fiber, meets the standards for safe packaging in view of being a natural, renewable, bio-degradable and eco-friendly product. Jute has myriad applications besides packaging. The focus of the Government is to facilitate the industry to modernize and shift its focus to diversified jute products. Major achievements during 2009-10
A National Jute Board Act has been established w.e.f. April 01, 2010. The National
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sector. Jute Technology Mission Mini Mission III: To provide marketing outlets and prevent distress sale of jute by jute farmers. Three market yards at Champadanga, Bethuadahari, Karimnagar in West Bengal and one at Kharupetai in Assam were set Up.
Human Resource Development: 3,048 Master Trainers and Supervisors in the mill
sector were trained; they in turn will train another 15,000workers over the next year. 6,300 artisans were trained by NGOs in 530 Womens Self Help Groups (SHGs).40 Jute Raw Material Banks have been established. 794 training programmes were organized by 29 Jute Service Centre benefiting 17,000 artisans. 262 Jute Diversified Products (JDP) units were set up.
Supply Chain Management: Retail outlets opened in 3 metros and buyer-seller-
meets (BSM) organized road shows. Bulk orders for jute carry bags were received in Delhi and at tourist destinations of Vaishno Devi and Goa.
Export Promotion: Organized trade delegations to regain lost markets such As
South America, which resulted in immediate response and confirmed orders even in a recessionary market.
April-March
2008-09 Quantity Value
2009-10 Quantity Value
RAW JUTE JUTE PRODUCTS
59.04 70.94
89 202.99 291.99 -12.78%
82.9 112.8 195.7 51.40%
197.42 453.2 650.62 122.80 %
TOTAL 129.98 % CHANGE OVER LAST YEAR 43.36%
TABLE 5: TABLE SHOWING THE PRODUCTION OF JUTE PRODUCTS FOR THE YEAR 2008-09 AND 2009-10
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ANALYSIS: The above table clearly shows the production of jute during the years 2008-09 and 2009-10. Here, raw jute has increased from 59.04 to 82.9 and the jute products also increases from 70.94 to 112.8 .Thereby, we can say that the production of jute during the years have a positive growth.
TABLE 6: TABLE SHOWING SUPPLY AND DISTRIBUTION OF JUTE FOR THE YEAR 2008-09 AND 2009-10 (Quantity: in lakh bales of 180 kg of each bale) ITEM 2008-09 SUPPLY OPENING STOCK JUTE AND MESTA CROP IMPORT TOTAL AVAILABILITY DISTRIBUTION MILL CONSUMPTION DOMESTIC/ IND. CONSUMPTION OXFORD 13 COLLEGE OF BUSINESS MANAGEMENT 9.00 10.00 89.00 77.00 2.00 106.00 3.00 101.00 22.00 82.00 8.00 90.00 2009-10
A STUDY ON COST MANAGEMENT PRIVATE LIMITED EXPORTS TOTAL CLOSING STOCK NEG 98.00 8.00
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2.00 89.00 12.00
GRAPH 3: Graph showing the supply and distribution of jute for the year 2008-09 and 2009-10
ANALYSIS:
By the above table shows the supply and distribution of jute for the period of two years (that is 2008-09 and 2009-10). Here, the opening stock of jute is reduced from 22.00 to 8.00, Jute and Mesta crop and import has increased upto 90.00 and 3.00 respectively. Therefore the overall supply of jute has decreased during 2009-10, whereas in case of Mill consumption has decreased and domestic consumption, exports is increased during the year 2009-10. Therefore the distribution level of Jute has increased.
INTERPRETATION:
By the above graph we can make an interpretation that the supply of jute shows the downward trend from 106.00 to 101.00.By this even the distribution of jute also shows a downward trend from 98.00 to 89.00 but the domestic consumption is been increased from 9.00 to 10.00 and Mill consumption has decreased from 89.00 to 77.00.
WOOL SECTOR
The central wool Development board (CWDB) Jodhpur, Rajasthan Socities Registration Act, 1958 in July 1987, to administer the implementation of programmes and schemes in Central Sector for the promotion and development of wool and woolen Industry in the country. FUTURE PLANS For the holistic growth and development of wool sector, the government is making serious efforts to achieve the following objectives by 2012: Increase yield of specialty wool fiber viz., Pashmina and Angora Improve fineness of wool by 2 (micron) OXFORD 14 COLLEGE OF BUSINESS MANAGEMENT
A STUDY ON COST MANAGEMENT PRIVATE LIMITED Increase wool yield per animal by 25% Reduce annual morality of sheep by 10%
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Widen the uses of the coarse and coloured decanni wool (Southern region) by product development and diversification Increase the demand for Indian wool in domestic and international mark
INTRODUCTION TO COST MANAGEMENT

Observe human life- individual and collective, economic and non-economic, professional and business across the nation. One thing is common in all decisions are based on costbenefit comparisons. Cost Management identifies, collects, measures, classifies and reports information that is useful to managers in planning, controlling and decisionmaking. Cost Management aims to produce information for internal users. It should be noted that Cost Management and Financial accounting systems are part of the total accounting information system. DEFINITION: According to DON R.HANSEN AND MARYANNE M.MOWEN defines Cost Management as identifies, collects, measures, classifies and reports information that is useful to managers in costing (determining what something costs), planning, controlling and decision- making. IMPORTANCE OF COSTING: The importance of costing has grown manifold and it will continue to grow. The main reasons are:
Growing competition:
Throughout the world, in case of most products, the era of sellers market is gone. Competition is intense .Profit margins have come down. A slight inefficiency and increase in cost may push a producer into losses. Therefore, proper cost ascertainment and cost control have become unavoidable.
Availability of large number of alternative choices:

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Producers have to make choices from amongst the large number of alternatives technologies, products, market territories and locations. Each choice involves careful cost benefit comparison. A wrong cost computation can lead to a wrong choice.
Profit maximization:
Goods and services are produced with a view to maximizing profit. This requires maximum cost efficiency and strict cost control.
Decentralization:
The cost ascertainment, allocation, distribution and comparison between different departments, machines and alternative processes help management to maintain maximum efficiency is possible.
OBJECTIVES:
There is a direct relationship among information needs of management, cost accounting objectives and techniques and tools used for analyses in costing. Cost management system has the following three important objectives: To determine product costs. To facilitate planning and control of regular business activities. To supply information for short-run and long run.
SCOPE OF COST MANAGEMENT:
Cost ascertainment:
It deals with the collection and analysis of expenses, the measurement of production of the different products at the different stages of manufacture and the linking up the production with the expenses. The different techniques of coasting such as marginal cost technique, the total cost technique, direct cost technique etc.., have been evolved.
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Cost audit:
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Cost audit is the verification of the correctness of cost accounts and check on the adherence to the cost accounting plan. Its purpose is not only to ensure that cost accounts and other records are arithmetically correct but also to see that the principles and rules have applied correctly.
budget fixed.
Budgetary control:
It involves the fixation of budgets or estimated cost and comparison of actual cost with the
Cost unit:
A cost unit is a unit of product or unit of service to which coasts are ascertained by means of allocation, apportionment and absorption.
Cost control:
Cost control is the guidance and regulation by executive action of the costs of operating and undertaking. It aims at guiding the actual towards the line of targets. Regulates the actual if they deviate or vary from the targets.
Cost reduction:
Cost reduction is concerned with reducing cost. IT is concerned with reduction program which is continuous process; it strives to achieve permanent reduction.
COSTING CONCEPTS: Costs:

Coast is the amount of expenditure, actual (incurred) or notional (attributable) relating to cost object. A cost object is any item such as product, department, and project activity and so on. Cost is the cost or cost equivalent value sacrificed to obtain some goods and services.
Costing:
Costing is a technique and process of ascertaining cost. The technique refers to principles, which are applied for ascertaining cost of products, jobs, processing and services. This technique may differ from industry to industry and change from time to time.
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A STUDY ON COST MANAGEMENT PRIVATE LIMITED .Cost accounting:
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Cost accounting is the application of accounting and costing principles, methods and techniques is the ascertainment of cost and the analyses of savings and / or excess as compared with previous experience or with standards.
Cost centre :
Cost centre is a location, person or item of equipment for which cost may be ascertained and used for purpose of cost control. Example: production departments, a machine or group of machines with in a department or a work group is considered as cost centre.
Profit centre:
A profit center is any sub-unit of an organization to which both revenues and costs are assigned, so that the responsibility of a sub-unit may be measured. Profit centre is a segment of the business entity by which both revenues are received and expenditures are casually controlled, such revenues and expenditure being used to evaluate segmental performance
ELEMENTS OF COST:
The element of cost is three, i.e.., materials, labor and other expenses. Let us know in detail the elements of cost: Materials:
DIRECT MATERIAL COST:
Direct material costs are those materials which can be identified in the product and can be conveniently measures and directly charged to the product. The following are normally classified as: Direct materials: All raw-materials like wheat in wheat flouring mills, sugar cane in sugar manufacturing industries etc.., Materials specifically purchased for a specific job, process or order. Indirect materials:
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Indirect Materials are those materials which cannot be conveniently identified with individual cost units, these are minor in importance, such as small and relative items which may become a part of finished products Example: Nails in bench or table, screws in doors etc... MATERIAL CONTROL: Material are inventory control may be defined as systematic control and regulation of purchase, storage and usage of materials in such a way so to maintain an even flow of production and at the same time avoiding excessive investment in inventories. Materials cost control covers the following areas: Ordering; Purchasing; Receipt; Storage; Issues; The requirement for a better control over materials is given below: Centralized purchase function i.e., all the purchases should be made through purchase department. Material is purchased with authority. Proper planning purchase function. Materials purchased should be of proper quality and specification. Standardization of materials. Materials should be properly received and inspected. Planned storage of all materials in stores. Selection of suppliers keeping in view the quality, price and delivery. Direct Materials used in production should be charged to production on an appropriate and consistent pricing basis. Indirect materials used in production and service departments should be appropriately apportioned and absorbed into product cost. Proper documentation and accounting of materials receipts and issues. OXFORD 19 COLLEGE OF BUSINESS MANAGEMENT
A STUDY ON COST MANAGEMENT PRIVATE LIMITED Materials issues only with proper authority.
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Maintenance of bin cards and stores ledger and regular reconciliation of both the records. Adoption of perpetual inventory system and continuous stock taking. Fixation inventory levels i.e., maximum, minimum, re-order and danger levels. Proper internals checks. Proper procedures in dealing with shortages and discrepancies. Proper classification and coding of materials. The technique commonly used for inventory control is as follows: Stock levels: In order to guard against under-stocking and over-stocking, most of the large companies adopt a scientific approach of fixing stock levels. These level are maximum level, minimum level, reorder level, danger level. By adhering to these levels, each item of materials will automatically be held within appropriate limits of control. Some of the factors which influence the stock level are:
Anticipated rate of consumption and amount of capital invested. Availability of storage space and cost of storing. Procurement cost and reliability of customers. Risk of loss due to: Obsolescence Deterioration Evaporation Fall in market prices. Reorder level (Economic Order Quantity):
Reorder quantity is sometimes known as Economic Order Quantity. It other words Economic Order Quantity is that size of the order, which gives maximum economy in purchasing any materials and ultimately contributes towards maintaining the material at the optimum level and at the minimum cost. While setting Economic Order Quantity, two types of costs should be taken into account:
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A STUDY ON COST MANAGEMENT PRIVATE LIMITED Ordering cost:
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This is the cost of placing an order with the supplies because of so many factors involved; it is quite difficult to quantify this cost. It mainly includes the cost of stationary , salaries of those engaged in receiving and inspection, salaries of those engaged in placing order etc.,
Cost of carrying: Interest on capital locked up in stores. Deterioration and wastage of materials. The insurance of incidence cost. Cost of operating the stores(salaries, rent, stationary etc.,)
This is the cost of holding the stock in storage. It includes the following:
Stock turnover:
Stock turnover tells how many times in a year stock are used up and replaced. Greater the stock turnover more efficient the stock policy. Thus, stock turnover is an indicator of the rate of consumption i.e. the fast moving materials. A high stock turnover ratio indicates fast moving materials and a low ratio indicates slow moving materials. Stock Turnover ratio can be calculated as under:
STOCK TURNOVER RATIO FOR PERIODS=Cost of materials consumed during the periodAverage stock of materials during the period12
STOCK TURNOVER RATIO (FOR DAYS)

=Average stock of materials during the periodCost of materials consumed during the period365
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If the length of the stock turn over period is short, the material is considered to be fast moving.
Objectives of material or inventory control are as follows: To ensure proper quality:
While purchasing the material due consideration should be given to the quality. It is no use in purchasing material of inferior quality. To avoid under-stocking:
Under-stocking leads inevitably to material running out of stock at some time or the other. Shortage of materials may arise at the time when they are urgently needed which leads to stoppage of production. To avoid over-stocking:
Investment in material must be kept as low as possible considering the production requirement and financial resource of the business. Economy in purchasing:
The purchase of material is highly specialized function. Its objectives are also to minimize wastage and to give information about materials.
2. LABOUR:
Is all labor expended in altering the construction, composition, conformation or condition of the product, wages of such labor is known as direct wages. Thus, it includes payment made to the following groups of labor: Direct labor: The labor cost incurred on the employees who are engaged directly in making the product, their work can be indentified clearly in the process of converting raw-materials into finished product is called direct labor cost.
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For Example: wages paid to the workers engaged in machining department, fabrication department, assembling department etc. Indirect labor: The indirect employees are not directly associated with the conversion process but assist in the process by way of supervision, maintenance, transportation of materials, materials handling etc. Their work benefits all the items being produced and cannot be specifically identified with the individual product.
3. DIRECT OR CHARGEABLE EXPENSES:

Expenses other than direct materials, Direct labor which can be identified with and allocated to cost units or cost centers as they are specially incurred for a particular product or process, form a part of Prime Cost. Indirect expenses: All indirect costs other than indirect materials, indirect labor cost, are termed as indirect expenses. Prime cost: This is the aggregate of direct material cost, direct labor cost and direct expenses. Thus, Direct material+ Direct labor+ Direct expenses= Prime cost.
4. OVERHEADS:
Overheads may be defined as an indirect cost which cannot be allocated to any specific job process because they are not capable of being identified with any specific job or process. Overheads include cost of indirect material, indirect labor, indirect expenses which cannot be conveniently charged to any job process, cost unit etc. For Example: cost like rent, rates, administration and supervision etc. These overheads may be sub-divided they are: Production Overheads: The production overheads is inclusive of all indirect material, indirect labor and indirect expenses concerned with manufacturing activity which starts with supply of material and ends with primary packing of the products. It is also called as manufacturing overhead, works overhead, and factory overhead. OXFORD 23 COLLEGE OF BUSINESS MANAGEMENT
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Administration overhead: The administration overhead is incurred for carrying the administrative function of the organization i.e. cost of policy formulation and its implementation to attain the objectives of the organization. Selling overheads: The selling overhead refers to the cost of selling function i.e. the cost of activities relating to create and stimulate demand for companys products and to secure orders. Distribution overheads: The distribution overhead will be incurred on goods made available to the Customers. These costs include the cost of maintaining and creating demand for the products. Research and development overheads: Research overhead is the cost of searching for the new products, new manufacturing process or equipment. The development overhead is the cost of putting research result on commercial basis.
THE VARIOUS ELEMENTS OF COST ARE DEPICTED IN FIGURES 1.1 AND 1-2
FIGURE 1.1
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FIGURE 1.2 SOURCE: COST ACCOUNTING, AUTHOUR: KHAN AND JAIN, PAGE NO: 1.13 COST SHEET OR STATEMENT OF COST:
Cost sheet is a statement designed to show the output of a particular accounting period along with break-up of cost. A Cost sheet is a memorandums statement. Therefore, it does not form part of double entry cost accounting records. The main advantages of cost sheet are: It discloses the total cost and cost per units produced during the given period. It helps in finding out the causes of variations in costs.
It enables a manufacturer to keep a close watch and control over the cost of production.
COSTING
PROCEDURE:
In order to ascertain cost of products, a cost sheet is prepared periodically. As the production is uniform and the cost units are identical. The cost per unit is ascertained by the simple method of dividing the total cost by the number of units produced. The cost sheet is designed to show the total cost as well as cost per unit of output for the given period.
SINGLE OR OUTPUT OR UNIT COSTING:

It is applied where the organizations produce single product and the whole production process involve in manufacture of single product. This is done generally in highly mechanized and routine production environments. Most frequently different grades of identical product are produced. For Example: Dairy Industry, Paper Industry, Cement manufacture. It unit costing, cost is collected element wise like direct materials, direct labour, prime cost, factory overhead, administration overhead, selling and distribution overhead etc. The cost of each element is divided by total production quantity to determine cost per unit of each element. OXFORD 25 COLLEGE OF BUSINESS MANAGEMENT
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COST PER UNIT=TOTAL COSTNUMBER OF UNITS PRODUCED DURING THE YEAR
TREATMENT OF STOCKS:
FIGURE 1.3 SHOWING THREE TYPES OF STOCK
STOCK OF RAW-MATERIALS: In order to calculate the value of raw-materials consumed during the period, opening stock of raw-materials is added to the raw-materials purchased and closing stock is subtracted.
RAW-MATERIALS CONSUMED=Opening stock of raw.materials+Purchase of raw materials-Closing stock of raw.materials
STOCK OF WORK-IN-PROGRESS: This is the semi-finished goods. In cost sheet, opening stock of work-in-process is added in prime cost along with factory overhead and closing stock of work-in-progress is subtracted there from. Thus, opening and closing stock of work-in-progress are adjusted in works or factory cost.
STOCK OF FINISHED GOODS: In cost sheet, finished goods are adjusted after calculating the cost of production. Opening stock of finished goods to add in cost of production and closing stock of finished goods is subtracted there from.
TREATMENT OF SCRAP:
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Scrap may be defined as the unavoidable residue material arising in certain types of manufacturing process. Examples of scrap are trimming, turnings or borings from metals. Scrap usually has a small realizable value recoverable without further processing. Such realizable value of scrap is deducted from the factory overhead or factory cost in cost sheet. Costing is the technique and the process of ascertainment cost.
SYSTEMS OF COSTING:
Process of cost ascertainment is a systematic and planned process. Cost data should arrange and processed on a co-ordinate manner according to know systems:
HISTORICAL COSTING or ACTUAL COSTING:
Historical costing is system of costing under which costs are determined after they have been incurred. There are two methods of actual costing Post costing. Concurrent or continuous costing.
ESTIMATED COSTING (OR COST ESTIMATION): It is the determination of cost of the product on the basis of estimated or pre-determined costs. An estimate is probable cost of a product at future date based on past experience and forecasts of likely changes in costs of materials, labor and overheads. Cost estimation is necessary for preparing budgets, quotations and tenders.
STANDARD COSTING: Under standard costing, standard cost are determined and used and then compared with the actual costs to determine the extent of variances so that remedial action can be taken. Standard costs are the predetermined costs in conformity with the most efficient operation and the use of resources within the firm.
FIGURE 1.4 SHOWING SYSTEMS OF COSTING

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TECHNIQUES OF COSTING:
Absorption Costing:
It is also known as total cost approach. It is defined as the practice of charging all the costs, both variable and fixed, to operations, processes or products. It is useful in submitting tenders, preparing job estimates. Marginal Costing: Fixed cost which do not change but remain constant for any level of production.
This technique bifurcates total costs of a product or operation into two classes Variable cost (Marginal costs) which vary proportionately to the change in the volume. This approach is useful in cost-volume-profit- analysis in guiding the management in its task of decision-making. Budgetary Control:
The system of estimated cost makes use of budgetary control. The budgets are pre-determined plans relating to activities of a business expressed in physical units and monetary values. Budgets are prepared for a period with respect to sales, production, purchase etc. This technique ensures the actual performance to be in line with the budgets. Standard Costing:
Standard performance is set in terms of costs and actual costs are compared with the standard. Any variations found between the two are recorded and causes thereof are investigated and immediate remedial steps are taken .It enables control of costs and measurement of efficiency of operation.
Uniform Costing:
The uniform costing is the new concept of cost accounting. The essential feature of Uniform costing is that standardized principles and methods of cost accounting are employed by a number of different companies and firms.
FIGURE 1.5SHOWING TECHNIQUES OF COSTING METHODS OF COSTING:

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Over many years, various cost accounting methods have evolved to record the manufacturing cost to suit particular industries, and it is the need for the organization to establish a suitable cost accounting system for their business to facilitate the recording and collection of costs; allocation; apportionment and absorption into products and services; analysis and control of costs etc. But whatever the costing methods is used, the basic costing principles relating to collection, analysis, allocation, apportionment and absorption is used. The costing methods are broadly categorized into two: Specific order costing. Continuous operation costing. SPECIFIC ORDER COSTING: Specific order costing methods are used by business organization which involves in make/Assemble/ Construct jobs or products to individual customers specific orders. The specific costing is further classified into job costing, contract costing and batch costing Job Costing:
In this method, costs are collected and accumulated separately for each job or work order. This is because each job work is done according to customers specifications. Each job has a separate identity and makes a cost unit. The industries where this method of costing is used are: Repair shops. Printing press. Painting and decorating. Production of made to order articles.etc. Contract Costing: This method is based on the principles of job costing. If a job is big, it is known as a contract. Contract is a big job and job is a small contract. Each contract is taken as a separate cost unit for the purpose of cost ascertainment. Contact costing is most suited to: Construction work Ship Building Architects Constructional engineers etc. OXFORD 29 Batch Costing: COLLEGE OF BUSINESS MANAGEMENT
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Like contract costing, it is also a variation of job costing. In this method, production of identical products is arranged in convenient groups or batches. Each batch is treated as a cost unit and costs are accumulated for each batch separately. It is used in the production of: Ready-made garments Toys Bicycle parts Biscuits and confectionary. CONTINUOUS OPERATION COSTING: Where organizations which involve in mass production of products, through continuous operations, which will then be sold from stock and will not be produced to the specific requirements of the customers. The continuous operation costing is classified into process costing, operation costing, output costing and service costing Process costing:
In this method costs are separately collected and accumulated for each process or department. In order to arrive at the cost per unit, the total cost of the process or department is divided by the quantity of production. This method is used in mass production industries manufacturing standardized products in continuous process of manufacturing. It such industries finished product of one process becomes raw material for the next process. Examples of that industry are: Textile mills Chemical works Sugar mills Paper mills Soap manufacturing Operation costing:
Operating costing method of cost ascertainment is applicable to those undertakings that render services. They do not manufacture goods. Such undertakings are: Transport companies Electricity companies Cinemas Schools OXFORD 30 COLLEGE OF BUSINESS MANAGEMENT
A STUDY ON COST MANAGEMENT PRIVATE LIMITED Hospitals etc.,
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Activities of such undertakings are of diverse nature, the cost system used is obviously from that of manufacturing concerns. Output costing:
This method is used when production is uniform and consists of only a single product or two or three products of similar products or different grades of similar product. This method is applied in the following types of industry: Mines Oil Drilling Steel works Brick works Service costing:
Service costing is also known as operating costing is used for establishing costs of services rendered or services are offered for sale and no items are produced. Service costing is used in service organizations like: Transport companies Hotels Hospitals Power generation Boiler houses etc.,
FIGURE 1.6 SHOWING METHODS OF COSTING COST CONCEPTS:

The clear understanding of various cost concepts is essential for the study of cost accounting and cost systems: OXFORD 31 Product costs: COLLEGE OF BUSINESS MANAGEMENT
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The product cost is aggregate of costs that are associated with a unit of product. Such costs may or may not include an element of overheads depending upon the type of costing system in forceabsorption or direct. Product costs are related to goods produced or purchased for re-sale and are initially identifiable as part of inventory. These product or inventory costs become expenses in the form of cost of goods sold only when the inventory is sold. Product cost is associated with unit of output. The costs of inputs in forming the product viz, the direct material, direct labor, factory overhead constitute the product costs. Period costs:
The period cost is a cost that tends to be unaffected by changes in level of activity during a given period of time. Period cost is associated with a time period rather than manufacturing activity and these costs are deducted as expenses during the current period without previously classified as product costs. Selling and distribution costs are period costs and are deducted from the revenue without their being regarded as part of the inventory cost. Common costs:
The common cost is an indirect cost that is incurred for the general benefit of number departments or for the whole enterprise and which is necessary for present and future operations. Joint costs:
The joint costs are the costs of either a single process or a series of processes that simultaneously produce two or more products of significant relative sales value. Short-run costs:
The short run costs are costs that vary with output when fixed plant and capital equipment remain the same and become relevant when the firm has to decide whether or not to produce more in the immediate future. Long-run costs:
The long-run costs are those which vary with output when all input factors including plant and equipment vary and become relevant when the firm has to decide whether to set up a new plant or to expand the existing one. OXFORD 32 COLLEGE OF BUSINESS MANAGEMENT
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Past costs:
The past costs are actual costs incurred in the past and are generally contained in the financial accounts. These costs report past events and the time lag between event and its reporting makes the information out of date and irrelevant for decision making. These costs will just act as a guide for future course of action. Future costs:
The future costs are costs expected to be incurred at the later date and are the only costs that matter for managerial decisions because they are subject to management control. Future costs are relevant for managerial decision making in cost control, profit projections, appraisal of capital expenditure, introduction of new products, expansion programs and pricing etc., Controllable costs:
The controllable cost is a cost chargeable to a budget or the cost centre, which can be influenced by the actions of the person in whom control of centre is vested .It is always not possible to predetermine responsibility, because the reason foe deviation from expected performance may only become evident later. For example: excessive scrap may arise from inadequate supervision or from latent defect in purchased material. Uncontrollable costs:
The uncontrollable cost is cost that is beyond the control (i.e., uninfluenced by actions) of a given individual during a given period of time. There are certain costs which are really difficult to control due to the following reasons: Physical hazards arising due to flood, fire, strike, lockout etc. Economic risks such as increased competition, change in fashion or model, higher prices of inputs, import restrictions etc. Political risks like change in government policy, political unrests, war etc. Technological risks such as change in design, know-how etc.
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Replacement
costs:
The replacement costs is a cost at which material identical to that is to be replaced could be purchased at the time of valuation. There replacement cost is a cost of replacing as asset at any given point of time either at the present or at the future. Historical costs:
The historical cost is the actual costs, determined after the event. Historical cost valuation states costs of plant and materials. For Example: at the price originally paid for them where as replacement costs valuation states the costs at prices that would have to be paid currently. Escapable costs:
The escapable cost is avoidable costs that will not be incurred if an activity is not undertaken or discontinued. It refers to cost which can be reduced due to the contraction in the activity of a business enterprise. It is the net effect on costs that are not important not just the cost directly avoidable by the contraction. For example: Closing an apparently unprofitable branch house-storage cost of other branches and transportation charges would increase. Reducing credit sales-costs estimated may be less than the benefits otherwise available. Unavoidable costs:
Unavoidable costs cannot be identified with an activity or sector of a business and which could not be avoided if that activity or sector exists. Out of the packet costs:
The out of the pocket cost is a cost that will necessitate a corresponding outflow of cash. These costs involve cash outlay or payments to other parties are termed as out of pocket costs. Out of pocket costs are relevant in some decision making problems such as fluctuation of prices during recession, make or buy decisions etc,
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A STUDY ON COST MANAGEMENT PRIVATE LIMITED Book costs:
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Book costs are those which do not require current cash payments. Depreciation is a notional cost in which no cash transaction is involved. Imputed costs:
The imputed cost is a cost which doesnt involve actual cash outlay, which is used only for the purpose of decision making and performance evolution. Imputed costs are a hypothetical cost from the point of view of financial accounting. Notional costs:
The notional costs is a hypothetical cost taken into account in a particular situation to represent the benefit enjoyed by an entity in respect of which no actual expenses are incurred. Conversion costs:
The conversion cost is the cost incurred for converting the raw-material into finished product. It is referred to as the production cost excluding the cost of direct materials. Urgent costs:
The urgent costs are those which must be incurred in order to continue operations of the firm. For example: cost of material and labour must be incurred if production is to take place.
Postponable costs:
The postponable cost is that cost which can be shifted to the future with little or no effect on the efficiency of current operations. These costs can be postponed at least for some time. For example: maintenance relating to building and machinery. Sunk costs:
The sunk costs are those costs that have been invested in a project and which will not be recovered if the project is terminated. The sunk cost is one for which the expenditure has taken place in the past. This cost is not affected by a particular decision under consideration. Sunk costs are always results to decisions taken in the past. OXFORD 35 COLLEGE OF BUSINESS MANAGEMENT
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FIGURE 1.7: SHOWING VARIOUS COST CONCEPTS CLASSIFICATION OF COSTS: It is important to realize that the term cost has a meaning in the given context. There are different purposes and no single cost concept is relevant in all situations. Here is an attempt made to analyze cost and its behavioral aspect. The cost is characterized by the word sacrifice and as such, it vary in managements interest to control and reduce, where possible, the sacrifices involved in achieving desired results. The classification of costs is studied under the following categories: Element wise classification of costs. Functional classification of costs. Classification based on cost behavior.
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COST COMPONENTS ELEMENT CLASSIFICATION
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FUNCTIONAL CLASSIFICATION
Direct material Direct labor Direct expenses
DIRECT COST(PRIMECOST) Manufacturing expenses Production cost
Administration expenses Selling expenses Distribution expenses Research Development Expenses & INDIRECT COST (OVERHEADS)
Administration cost
Selling Distribution cost
and
Research
and
development cost
NET PROFIT NET PROFIT NET PROFIT
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FIGURE1.8: CLASSIFICATIONS OF COSTS ON THE BASES OF FUNCTIONAL AND ELEMENT WISE.
Element wise classification of costs:
The element of cost can be studied under the classification Direct and Indirect costs. If the object of interest for identifying and measuring cost is to determine how much sacrifice is involved in manufacturing a particular product, then initially one can define three elements of total costs: Materials Labor Expenses
Direct costs:
The direct costs are those which can be identified easily and indisputably with a unit of operation or costing unit or cost center. Cost of direct material, direct labor and direct expenses can be OXFORD 38 COLLEGE OF BUSINESS MANAGEMENT
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directly allocated or identified with particular cost center or cost units and can be directly charged to such cost centers or cost units. These costs are also called as traceable costs. Indirect costs:
Indirect costs cannot be allocated but which can be apportioned to cost centers or cost units. These costs are also called as common costs. The indirect costs are not traceable to any plant, department, and operation or to an individual final product. All overhead costs are indirect costs. Costs of indirect material, indirect labor and indirect expenses in aggregate constitute the overhead costs and are the indirect component of the total cost. Indirect costs cannot be directly allocated to cost units or cost centers and have to be absorbed or recovered in cost units are termed as indirect costs. Functional classification of costs: Production cost:
Based on the functions, the costs can be classified into: The production cost is inclusive of all the direct materials, direct labor, direct expenses and manufacturing expenses. It refers to costs concerned with manufacturing activity which starts with supply of material and ends with primary packing of the product. Administration cost:
The administration cost is incurred for carrying the administrative function of the organization i.e., cost of policy formulation and its implementation to attain the objectives of the organization.
Selling and distribution costs:
The selling cost refers to the cost of selling function i.e., the cost of activities relating to create and stimulate demand for companys products and to secure orders. The distribution costs will be incurred on goods made available to the customers. These costs include the cost of maintaining and creating demand of the product, making the goods available in the hands of customer. Research and development costs:
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The research costs is the cost of searching for new products, new manufacturing process, improvement of existing products, processes or equipment and the development costs is the cost of putting research result on commercial basis.
FIGURE 1.9 SHOWING CLASSIFICATION OF COST ON THE BASES OF COST BEHAVIOUR Classification based on cost behavior: Variable cost:
Depending on the variability behavior, costs can be classified variable and fixed costs:
The variable cost is a cost that tends to vary in accordance with level of activity within the relevant range and within a given period of time. The prime product costs i.e., direct material, direct labor and direct expenses tend to vary in direct proportion to the level of activity. An increase in the volume means a proportionate increase in the total variable costs and a decrease in the volume means a proportionate decline per unit. in the total variable costs. There is a linear relationship between volume and variable costs. They are constant
Fixed cost:
The fixed cost is a cost that tends to be unaffected by changes in the level of activity during a given period of time. The fixed costs remain constant in total regardless of changes in volume up to the certain level of output. They are not affected by changes in the volume of production. There is an inverse relationship between volume and fixed cost per unit. Fixed costs tend to remain constant for all levels of activity within a certain range. Semi-variable cost or semi- fixed cost:
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Many cost fall between these two extremes. They are called as semivariable cost or semivariable costs. They are neither perfectly variable nor absolutely fixed in relation to changes in volume. They change in the same direction as volume by not in direct proportion thereto.
MARGINAL COSTING:
In order to access the profitability of BIRDY EXPORTS PRIVATE LIMITED,
BENGALURU the technique of marginal costing is used. It is a special technique, which presents management with information enabling it to measure the profitability of an undertaking by considering the behavior of costs. MEANING AND DEFINITION OF MARGINAL COST: Marginal cost is the additional cost of producing an additional unit. It is nothing but variable cost. It comprises direct materials, direct labor and variable overheads. The C.I.M.A. London has defined Marginal cost as the amount at any given volume of output by which aggregate costs are changed, if volume of output is increased or decreased by one unit. MEANING AND DEFINITION OF MARGINAL COSTING:
Marginal Costing is defined by C.I.M.A. London as the ascertainment of marginal cost, by differentiating between fixed and variable costs, and of the effect on profit of changes in volume or type of the output. This definition makes it clear that Marginal Costing goes beyond the ascertainment of costs. It is a technique concerned with the effect on profit when the volume or type of output changes. In particular, Marginal costing studies the effect which fixed cost has on the running on the business. THE PRINCIPLES OF MARGINAL COSTING
The principles of marginal costing are as follows.
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For any given period of time, fixed costs will be the same, for any volume of sales and production (provided that the level of activity is within the relevant range). Therefore, by selling an extra item of product or service the following will happen. Revenue will increase by the sales value of the item sold. Costs will increase by the variable cost per unit. Profit will increase by the amount of contribution earned from the extra item. Similarly, if the volume of sales falls by one item, the profit will fall by the amount of contribution earned from the item. Profit measurement should therefore be based on an analysis of total contribution. Since fixed costs relate to a period of time, and do not change with increases or decreases in sales volume, it is misleading to charge units of sale with a share of fixed costs. When a unit of product is made, the extra costs incurred in its manufacture are the variable production costs. Fixed costs are unaffected, and no extra fixed costs are incurred when output is increased. FEATURES OF MARGINAL COSTING :
The main features of marginal costing are as follows: Cost Classification: The marginal costing technique makes a sharp distinction between variable costs and fixed costs. It is the variable cost on the basis of which production and sales policies are designed by a firm following the marginal costing technique. Stock/Inventory Valuation: Under marginal costing, inventory/stock for profit measurement is valued at marginal cost. It is in sharp contrast to the total unit cost under absorption costing method. Marginal Contribution: Marginal costing technique makes use of marginal contribution for marking various decisions. Marginal contribution is the difference between sales and marginal cost. It forms the basis for judging the profitability of different products or departments. OXFORD 42 ADVANTAGES OF MARGINAL COSTING: COLLEGE OF BUSINESS MANAGEMENT
A STUDY ON COST MANAGEMENT PRIVATE LIMITED Marginal costing is simple to understand.
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By not charging fixed overhead to cost of production, the effect of varying charges per unit is avoided. It prevents the illogical carry forward in stock valuation of some proportion of current years fixed overhead. The effects of alternative sales or production policies can be more readily available and assessed, and decisions taken would yield the maximum return to business. It eliminates large balances left in overhead control accounts which indicate the difficulty of ascertaining an accurate overhead recovery rate. Practical cost control is greatly facilitated. By avoiding arbitrary allocation of fixed overhead, efforts can be concentrated on maintaining a uniform and consistent marginal cost. It is useful to various levels of management. It helps in short-term profit planning by breakeven and profitability analysis, both in terms of quantity and graphs. Comparative profitability and performance between two or more products and divisions can easily be assessed and brought to the notice of management for decision making. CONTRIBUTION: In marginal costing, costs are classified into fixed and variable costs .The concept Marginal Costing is based on the behavior of costs with volume of output. From this approach, it is not possible to identify the amount of contribution per product towards fixed overheads and profits. The contribution is the difference between sales volume and the marginal of sales. In marginal costing it is not possible to determine the profit per unit of product because fixed overheads are charged in total to the profit and loss account rather than recovered in product costing. Contribution is a poll of account from which total fixed costs will be deducted to arrive at profit or loss.
PROFORMA AND FORMULAE USED IN MARGINAL COSTING:
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A STUDY ON COST MANAGEMENT PRIVATE LIMITED SALES LESS: VARIABLE COST CONTRIBUTION LESS: FIXED COST PROFIT XX XX XXX XX XXX
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FIGURE 1.10: SHOWING PROFORMA OF MARGINAL COSTING FORMULAE: SALES= VARIABLE COST + FIXED COST+ PROFIT SALES-VARIABLE COST= CONTRIBUTION SALES-VARIABLE COST= FIXED COST+ PROFIT CONTRIBUTION= FIXED COST+ PROFIT CONTRIBUTION FIXED COST= PROFIT
BREAK EVEN ANALYSIS

MEANING OF BREAK-EVEN ANALYSIS:
Break even analysis is a widely used technique to study the COST-VOLUME- PROFIT relationship. It is interpreted in narrow as well as broad sense. In its narrow sense, breakeven analysis is concerned with determining break-even point i.e., that level of production and sales where there is no profit and no loss. At this point total cost is equal to total sales revenue. OXFORD 44 COLLEGE OF BUSINESS MANAGEMENT
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When used in the broader sense, break-even analysis is used to determine probable profit/loss at any given level of production/sales. This is an important technique used in profit planning and managerial decision making.
CALCULATIONS OF BREAK-EVEN ANALYSIS:
Break-even point- This break-even point is the volume of output or sales at which total cost is exactly equal to sales. It is a point of no profit or no loss. This is the minimum point of production at which total cost is recovered and after this point, profit begins. The fundamental formulae to calculate break-even point is:
BREAK-EVEN POINT (in units)= TOTAL FIXED COSTCONTRIBUTION PER

UNIT=FS-V
BREAK-EVEN POINT (in rupees)= TOTAL FIXED COST CONTRIBUTION=F*SSV
OR
BREAK-EVEN POINT (in rupees )= TOTAL FIXED COSTPV RATIO {Where p/v ratio =CONTRIBUTIONSALES}
USES OF BREAK-EVEN ANALYSIS:
Some of the important uses of break-even analysis are summarized below: Determining the break-even point. Determining the selling price which will give the desired profit or return on capital employed. Determining the sales volume to earn a desired profit or return on capital employed. Determining the costs and revenue at different levels of output. It helps in determining the most profitable sales mix. It helps in determining comparative profitability of each product line. It studies the impact of increase or decrease in fixed and variable costs on profits. OXFORD 45 COLLEGE OF BUSINESS MANAGEMENT
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It studies the effect of change in selling price or of price differentiation in different markets. It studies the effect on profits and break-even points of high proportion of variable costs with low fixed cost and vice-versa.
PROFIT VOLUME RATIO (P/V RATIO), ITS IMPROVEMENT AND APPLICATION :
The ratio of contribution to sales is P/V ratio or C/S ratio. It is the contribution per rupee of sales and since the fixed cost remains constant in short term period, P/V ratio will also measure the rate of change of profit due to change in volume of sales. The P/V ratio may be expressed as follows:
PROFIT-VOLUME RATIO =Sales-Marginal cost of sales Salesor=Changes in ProfitChanges in Sales
Or
PROFIT-VOLUME RATIO =Contribution Sales
or
=Changes
in
contributionChanges in sales
A fundamental property of marginal costing system is that P/V ratio remains constant at different levels of activity. A change in fixed cost does not affect P/V ratio. The concept of P/V ratio helps in determining the following: Breakeven point Profit at any volume of sales Sales volume required to earn a desired quantum of profit Profitability of products Processes or departments
The contribution can be increased by increasing the sales price or by reduction of variable costs. Thus, P/V ratio can be improved by the following: Increasing selling price OXFORD 46 COLLEGE OF BUSINESS MANAGEMENT
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Reducing marginal costs by effectively utilizing men, machines, materials and other services Selling more profitable products, thereby increasing the overall P/V ratio.
MARGIN OF SAFETY (MOS)
Every enterprise tries to know how much above they are from the breakeven point. This is technically called margin of safety. It is calculated as the difference between sales or production units at the selected activity and the breakeven sales or production. Margin of safety is the difference between the total sales (actual or projected) and the breakeven sales. It may be expressed in monetary terms (value) or as a number of units (volume). It can be expressed as profit / P/V ratio. A large margin of safety indicates the soundness and financial strength of business. Margin of safety can be improved by lowering fixed and variable costs, increasing volume of sales or selling price and changing product mix, so as to improve contribution and overall P/V ratio. Formulae of margin of safety:
MARGIN OF SAFETY= OR
ACTUAL SALES - BREAK EVEN SALES
MARGIN OF SAFETY=PROFITPVRATIO Margin of safety as a percentage of total sales:

=MARGIN OF SAFETYTOTAL SALES100
The size of margin of safety is an extremely valuable guide to the strength of a business. If it is large, there can be substantial falling of sales and yet a profit can be made. On the other hand, if margin is small, any loss of sales may be a serious matter.
Cost-Volume-Profit (C-V-P) Relationship
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We have observed that in marginal costing, marginal cost varies directly with the volume of production or output. On the other hand, fixed cost remains unaltered regardless of the volume of output within the scale of production already fixed by management. In case if cost behavior is related to sales income, it shows cost-volume-profit relationship. In net effect, if volume is changed, variable cost varies as per the change in volume. In this case, selling price remains fixed, fixed remains fixed and then there is a change in profit. Being a manager, you constantly strive to relate these elements in order to achieve the maximum profit. Apart from profit projection, the concept of Cost-Volume-Profit (CVP) is relevant to virtually all decision-making areas, particularly in the short run. The relationship among cost, revenue and profit at different levels may be expressed in graphs such as breakeven charts, profit volume graphs, or in various statement forms. Profit depends on a large number of factors, most important of which are the cost of manufacturing and the volume of sales. Both these factors are interdependent. Volume of sales depends upon the volume of production and market forces which in turn is related to costs. Management has no control over market. In order to achieve certain level of profitability, it has to exercise control and management of costs, mainly variable cost. This is because fixed cost is a non-controllable cost. But then, cost is based on the following factors: Volume of production Product mix Internal efficiency and the productivity of the factors of production Methods of production and technology Size of batches Size of plant Thus, one can say that cost-volume-profit analysis furnishes the complete picture of the profit structure. This enables management to distinguish among the effect of sales, fluctuations in volume and the results of changes in price of product/services. In other words, CVP is a management accounting tool that expresses relationship among sale volume, cost and profit. CVP can be used in the form of a graph or an equation. Cost-volumeprofit analysis can answer a number of analytical questions. Some of the questions are as follows: What is the breakeven revenue of an organization? How much revenue does an organization need to achieve a budgeted profit? OXFORD 48 COLLEGE OF BUSINESS MANAGEMENT
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What level of price change affects the achievement of budgeted profit? What is the effect of cost changes on the profitability of an operation? Cost-volume-profit analysis can also answer many other what if type of questions. Costvolume-profit analysis is one of the important techniques of cost and management accounting. Although it is a simple yet a powerful tool for planning of profits and therefore, of commercial operations. It provides an answer to what if theme by telling the volume required produced.
OBJECTIVES OF COST-VOLUME-PROFIT ANALYSIS: In order to forecast profits accurately, it is essential to ascertain the relationship between cost and profit on one hand and volume on the other. Cost-volume-profit analysis is helpful in setting up flexible budget which indicates cost at various levels of activities. Cost-volume-profit analysis assists in evaluating performance for the purpose of control. Such analysis may assist management in formulating pricing policies by projecting the effect of different price structures on cost and profit.
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1. INTRODUCTION:
Cost Accounting measures and reports cost and other information related to the organizations acquisions or consumption of resources. It provides information for both Management Accounting and Financial Accounting. Many costing systems have multiple cost objects, Managers at a factory can collect cost for their mass produced products for the assembly plant and for customers who have globes assembled at the plant. This study is about Cost Management and it is conducted to know how the company analyzes the cost of the product, plan to reduce the cost of the product, the technique it uses for cost reduction and the pattern of fixing the prices to earn reasonable amount of profit for its survival and expansion, keeping in touch with competitors. This study will help to have update knowledge of costing.
2. STATEMENT OF THE PROBLEM:

The Research study is about finding out the cost of the various products and profitability of the company and also to find out Material cost and Marginal cost of the company, since the BIRDY EXPORTS PRIVATE LIMITED doesnt maintain cost accounts and also to find out whether the company is making proper cost accounting decisions. This study is conducted therefore to create awareness in the organization for the maximum utilization of costs in processing. The study also helpful for the top management to examine utilization of cost and eliminate the wasteful expenditure, which is directly involved in the production and also helps in proper control over the costs, as expenditure incurred is identified against departments and accounted against expense accounts. OXFORD 50 COLLEGE OF BUSINESS MANAGEMENT
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3. OBJECTIVES OF THE STUDY:

The objective of the study is to: Examine the profitability of the BIRDY EXPORTS PRIVATE LIMITED on the bases of the cost sheet which is prepared with the help of schedules forming profit & loss a/c Study the efficient material control adopted by the firm. Make comparative study based on the Marginal costing technique. To find out the variation between basic understanding and practical practices in cost accounting and management.
4. SCOPE OF STUDY:
The data covering under the study of Cost management is element wise cost sheet, to find out the product produced and profitability of the company and to maneuver the cost analysis, with the help of feasible solutions and finally evaluate the performance of BIRDY EXPORTS PRIVATE LIMITED. It also includes an insight into the finance department, which includes Bills receivable section, Bills Payable section and Book Keeping section.
5. METHODOLOGY OF THE STUDY:

Research Methodology described the various steps that are generally adopted by a researcher in studying the research problem along with the logic behind them. The methodology used is the study is descriptive methodology. Data is important for any study has been obtained from the Secondary data can be collected from the operating statement report of the company for the last 3 years and efforts is made to prepare overall cost-sheet by using secondary data present in the operating statements. OXFORD 51 COLLEGE OF BUSINESS MANAGEMENT
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Methods used are Marginal costing in conjunction with other techniques such as standard costing or budgetary control.
TOOLS AND TECHNIQUES USED: Tables and graphs are used as instrumentation techniques.
RESEARCH DESIGN: Information is collected from the data provided by the BIRDY EXPORTS PRIVATE
LIMITED. Further data is collected from observations. Design regarding study period in this in 2 months. The companys operating statement has been used to make the analysis and interpretation. SOURCES OF DATA:
The primary data will be collected from the information provided by the BIRDY EXPORTS PRIVATE COMPANY and through consultation through various departmental heads and also through observation. The secondary data will be collected from operating statement of past 3 years of the BIRDY EXPORTS PRIVATE COMPANY.
SIGNIFICANCE OF THE STUDY:

Cost Accounting, as a tool of management, provides management with detailed records of the cost relating to products, operations or factions. Cost Management assumes strategic significance in the corporate sector in view of the following reasonsThis cost management provides data about profitable and unprofitable products and activities.
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All items of costs can be analyzed to minimize the losses and wastage emerging from the manufacturing process and reduce the costs associated with different activities. Cost Accounting also provides cost data and information to determine the price of the product. Cost data can be obtained and compares with standard cost within the firm or industry. Negotiations with Government and labor unions can easily be made with the information provided by the cost accounting system. More accurate and reliable financial accounts can be prepared promptly for the use of management.
5. LIMITATIONS OF THE STUDY:

The study can be limited to the extent of available data. Owing to the confidentiality enforced by the company, various precise information might not be obtained. An in depth study might not be done because of time constraints. 5. CHAPTER SCHEME:
7.1- CHAPTER 1- INTRODUCTION
This chapter includes a brief introduction towards the History, Growth and Current prospects of textile industries in India, a brief introduction to the concept of Cost Management, Elements of costs, Costing procedure, Systems of costs, Costing techniques, Classification of costs, Marginal costing, Break even analysis, Profit-volume ratio, Margin of safety, cost-volume-profit analysis.
7.2- CHAPTER 2- RESEARCH DESIGN
This chapter includes title of the study, statement of the problem, objective of the study, scope of the study, methodology, tools of data collection, significance of study, limitations of the study.
7.3- CHAPTER 3- COMPANY PROFILE
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This chapter speaks about the company dealt with, bringing out its area of operation and its achievements in the field.
7.4- CHAPTER 4- DATA ANALYSIS AND INTERPRETATION
This chapter concentrates on analysis of the data so obtained and interpretation of the same. Each objective is considered separately and the analysis and interpretations were drawn for these.
7.5- CHAPTER 5- SUMMARY OF THE FINDINGS AND SUGGESTIONS
The summary of findings, recommendations and conclusions to enhance the overall efficiency in cost management of the company are given in this chapter.
CHAPTER 8- REFERENCE AND BIBLIOGRAPHY This chapter includes the list of various books, websites that are referred and used in the study on cost management. CHAPTER 9- ANNEXURE This chapter includes the copy of financial statement of the company, calculations supporting interpretation etc
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ORGANIZATION STUDY BACKGROUND:

BIRDY EXPORTS PRIVATE LIMITED (BEPL) is France Based Textile exporting company .In year 1982, Mr. Denis Germain was in India for social projects and found great potential business model. He started off venture with just 7 working staff in R T Nagar Bangalore with Sampling as its core operations. Mrs. Florence Germain also joined the company board as director. Since then company has grown multiple times in terms of turnover, client based, brands, services it offers. BEPLs one of its first client were Polo Boy , 2nd Studio Venture etc and firm is been best in retaining its client for longer time with its relationship policies. Few of the popular apparel brands it has been dealing with since its inception are Timber Land, DKNY Converse, Burberry, Escada, TBS, Aigle, Dorotennis, Chloe, Missoni, IKKS, Chloe, Kenzo, Moncler,Petit Bateau,Marase,Ripcurl,Missoni etc. In year 1998-1999, Merchandising and Sampling were its main operations but as time passed its portfolio of services have increases to sectors like Fabric sourcing, product development, pattern and design construction, sampling, production and quality our dynamic team strives to find better ways of working every day. At BEPL, employees and management strive to create a positive culture containing the key elements of values norms and principles. BEPL has been providing its services in Apparel sourcing and manufacturing mainly for the French market with over a decade of rich experience in the industry with a highly skilled multi disciplinary team in transforming imaginative ideas into fashion marvels.
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KEY PEOPLE
Mr. .Denis Germain, CEO
BEPL was founded by Mr. Denis Germain and his wife Mrs. Florence Germain, who came to India for social upliftment projects. With the help of dedicated teams of Indian and French professionals, BEPL has since evolved from a small export house to a professional and organized company - Delegate the task and double the success - One of the famous quotes Mr. Denis while inspiring BEPL family. Mrs. Florence Germain , Director
Mrs. Florence Germain leads an team in finance, Human relationship, Infrastructure and General administrative sections. She provides the fuel and thrust needed to sustain the phenomenon growth achieved and projected.
Mr. Narayana Reddy: Finance Manager, BEPL, India.
A soft spoken, very humble person, great with numbers. Updated with current happenings in financial market makes this person different from others.
Mr. Subbu Raj: Human Resource Manager, BEPL, India.
Dynamic and enthusiastic person who knows how to read mind of person who is sitting next to him. Subbu sir is very responsive to persons need irrespective of the cader. Mrs. Anita Joy: Head Marketing and New product Development. She is the most generous lady I found in BEPL, India. A committed and hard working person. BEPL has been benefited from here marketing skills.
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BEPLs Core people also includes following managers. Mr. Yuvraj: Head Production Department Mr. George Gregory: Head Fabric Sourcing. Mr. Shyam Sundar: Head Purchase Department. Mrs. Shanaz: Head Merchandising Department.
BEPLs Values
They believe in serving our customers with integrity and value added services with excellence and high regards to timeliness of deliverables. Clarity in vision coupled with Depth of knowledge build up on Integrity in character is also valued at BEPL.
Our Mission
To serve our customer with quality products on time STRESS FREE.
Vision
To be most sought after Apparel sourcing / Manufacturing Company for the global Apparel Industry and to be the organization of choice for Apparel fashion professionals.
ABOUT BEPL AS A THE TEAM

The Management team have several professionals leading the Fabric , Marketing & product development , Merchandising, production , quality ,HR and Finance. The team at BEPL has professionals who are leading the change and driving the performance and growth of the organization. BEPL is a strong force of more than 150 professional staff and today Birdy Exports group includes: 1300employees 660 stitching machines OXFORD 57 COLLEGE OF BUSINESS MANAGEMENT
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QUALITY AT BEPL
BEPL has worked under various quality control and quality assurance programmes and can implement the most appropriate level requirements as per customer requirements on global standards. The objective is to achieve conforming quality work the first time the work is performed, eliminating need for remedial work garments .
resulting in high quality
QUALITY POLICY :
BEPL provides clear directions and working practices to all its vendors and itself by setting international standards and guidelines. There accreditation under ISO standards reflects our commitment to best practices and continuous improvement and there International management systems have been created to underpin these high standards to the benefit of our customers. QUALITY CONTROL : Quality being the core objective of the organization, they have a team with specialized technicians, well trained This team bifurcates into: Quality control team: Controls the quality right from the beginning by reviewing, meeting with customers, sampling and by providing technical guidance and solving the issues with the manufacturing facility until the finished product is ready. Quality auditing team: The auditing team acts as a third party within the organization and they audit the consignment as per customers specification and communicates with customer directly.
AT BEPL
Excellence is not an act, but a habit - Aristotle They adopt state of the art technical practices, Adapt to the clients requirements and continuously improve quality of service. OXFORD 58 COLLEGE OF BUSINESS MANAGEMENT
A STUDY ON COST MANAGEMENT PRIVATE LIMITED Quality and efficiency of service determine our growth.
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Implied quality requirements are as important as stated quality requirements. Timely delivery of Orders is the responsibility. They commitment to excellence is unconditional.
ENVIRONMENT, HEALTH & SAFETY BEPL emphasizes on the health and safety of all workers in our organization and all our vendors. They are SA 8000 Certified for all compliance norms and thereby are continuously monitoring the safety requirements and produce periodic safety audit reports related to all the felicities they are placing our orders with. They have been approved by SKAL for Organic cotton Garments.
WE value LIFE above all else and shall endeavor to improve the quality of life of all individuals whose life we touch BEPL Management
SOCIAL GROWTH IN BIRDY

The social growth at BIRDY EXPORTS PRIVATE LIMITED starts with work environment. To sustain globally acceptable work place practices/standards they have implemented SA 8000 successfully and they are certified for the same. Hygiene and security within the premises are regularly audited and certified by external Third Party SA 8000 Auditors. Workers and staff can leave their children in our Crches. They believe in Corporate Social Responsibility (CSR): A certified Psychologist meets regularly with workers within the factory premises. A Microcredit program from they Trust The Link is available for workers who want to save and borrow. Job opportunities: Several employees are selected from Prerana Resources center, a home for challenged people, to be trained and employed in the Company.
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Free health check up camp: as a concern towards employees health and wellness, free health check up camps are conducted every year. A SPECIAL EYE CAMP was conducted for employees. Those with refractive problem were identified, and they were further subjected to specialized test. Free spectacles were distributed to the workers. The company helps Hand Embroidery work shop named SURYA TRUST for Lambadi women in a village in Hampi. Its main motive and vision is to enhance their creativity and skills and to make them stand on their own independently and to face the society with courage.
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PRODUCT RANGE
MEN-WOMEN-CHILDREN AND BABIES. WOVEN-JERSEY-KNITSSILK SPORTS-WEAR LUXURY WEAR AND
WITH LEADING BRANDS AS OUR CUSTOMERS, WE MANUFACTURE A WIDE RANGE OF

PRODUCTS.
From very technical jackets to subtle finishings, DEDICATED MERCHANDISERS, lead by the dynamic shanaz, answer to your most specific requirements, and coordinate with other departments and suppliers. During the order process, they ensure objectives of timely delivery and quality.
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CORE OPERATIONS @ BEPL EXPORTS, INDIA (BANGALORE)
OUR OPERATIONS / SERVICES:
Our services are designed with the objective to eliminate complexity from our customers requirements. While we constantly provide services to our customers at every stage of our orders, listed below are some of our core services. Product / Design Development Sourcing Merchandising Pattern development/ grading Sampling Production Quality Control
FIGURE 1.11: DIAGRAM SHOWING THE CORE OPERATIONS AT BEPL
1. PRODUCT /DESIGN DEVELOPMENT : BEPL believe in quality service. The Apparel Industry thrives on every day change in fashion trends and we fulfill the requirements by constantly keeping a close watch on the trends and forecast globally and bring them into life on the new collection to propose to their customers every season with the new innovative realistic ideas. This helps their customers to work closely with their design team with the inputs being value added into
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their creative thoughts. The company strength being qualified French designer who supports their design development team with her proficiency and innovative abilities. 2. FABRIC SOURCING: Fabrics and its finish have been an integral part of the apparel construction and appearance. BEPL has been striving to bring to our customers all the new developments in fabrics through all the major mills in India and abroad. Besides, BEPL fabric team is in constant research on the new techniques on fabric finishes and washes keeping in mind the various parameters to be followed parallel to maintain the standards set for the global market. Their strength has been highly technically qualified fabric professionals with and etch on technical excellence. Designs, colours, quality, washings, treatments, dyeing, George and his team will have a solution or an idea for everything you wish.
FABRIC IS THEIR
3. PATTERN & GRADING : BEPL has been supporting all its clients and vendors on pattern development and grading. The pattern department is monitored by a French modelist supported by six LECTRA operators and seven well trained patternist. Their strength has been in providing in a very short span of time to their customers with new patterns, modifications and grading. 4. SAMPLE DEVELOPMENT: OXFORD 63 COLLEGE OF BUSINESS MANAGEMENT
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With 150 machines dedicated for the sampling requirements and a production capacity of 1,000 pcs per day, BEPL has been taking Care of all the sampling of various customers being produced with an eye on every detail in order to give the customers a quality standard product within the time limit indicated. BEPL sampling unit has been well equipped to handle multi style products with value addition. With multifaceted activity facility to support the sampling like fabric sourcing , pattern developments and dedicated team of professionals at various levels we have been successful in providing our customers with their sample requirements in a short span of time to overcome the demand of the season. Our other advantage has been the Flexibility in quantities we can accept, due to our services fixed to the European Market and our better understanding of importance of quality and time over the quantities.
5. Production
Apart from sampling, BEPL has its own manufacturing facility of 125 machines in Bangalore with a production capacity of 1,000 pcs per day. Its specialty being men's and ladies shirts but lately has been modified and made capable of handling Multi style products for all categories. Besides, BEPL has a tie up with the factories who have been solely manufacturing for BEPL requirements since its inception. The facility being situated in Madurai, located 600 kms from Bangalore has a capacity of 4.500pcs per day. The factories are geared up to make value added Mens, Ladies and kids garments.
VENDOR NETWORK
Apart from its own manufacturing facility, BEPL has been sourcing garments though its strong vendor base spread across major locations in the south of India. They have been very choosy in selecting our vendor base on the lines of Social Compliance, quality standards and proactive response. All vendors follow and abide by their principles with customer in focus in order to have a proactive culture and an ongoing quest for perfection.
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BEPL CLIENTS
With over a decade in the industry BEPL has successfully delivered with excellence and its ever-growing customers is a testimony. Our customer is our reason for being here
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STATEMENT SHOWING COST SHEET FOR THE 2006-07, 2007-08, 2008-09 AND 2009-10
PARTICULARS OPENING STOCK OF RAW-MATERIAL ADD COST OF PURCHASE 2006-07 8417318 51696786 2007-08 4686381 61160524 2008-09 8277324 110674736
YEARS
2009-10 11336517 140220233
60114104 LESS CLOSING STOCK OF RAW-MATERIAL 4686381
65846905 8277324
118952060 11336517
151556750 12220612
RAW-MATERIAL CONSUMED ADD DIRECT EXPENSES(INCLUDIN G DIRECT WAGES)
55427723
57569581
107615543
139336138
42934069
39408281
87576560
96141544
PRIME COST
98361792
96977862
195192103
235477682
ADD
FACTORY OVERHEAD DEPRECIATION
37084346 3452926
51377169 3998847
57748609 4066070
49659303 5038613
FACTORY (GROSS) ADD
COST
138899064
152353878
257006782
290175598
OPENING STOCK OF WORK IN PROGRESS
6538872 145437936
2004742 154358620 BUSINESS
10215582 267222364
17505437 307681035
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INTRODUCTION: The raw data is collected from various sources such as information provided by the company and schedules forming part of profit and loss account. The information is summarized tabulated, classified, edited and finally analyzed and interpreted to get the end result as to know the performance of the Birdy Exports Private Limited.
CLASSIFICATION AND TABULATION: The complete instruments of data collection are the schedules forming part of profit and loss account and company material containing a vast mass of data .They cannot straight away provide answers to research questions. They are like raw-material, which need processing. Data processing involved classifications and summarization of the data Processing is an intermediary stage of work between data collection and data analysis. Data processing consists of a number of related operations and they are: Editing Classification Coding Tabulation OXFORD 67 COLLEGE OF BUSINESS MANAGEMENT
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NOTE: As far as the analysis and interpretation of COST SHEET is concerned, the year 2006-07 is taken as Base Year, and Percentage (%) of change from year to year...That is, [Percentage (%) of improvement made by Birdy Exports from year to year] is calculated. The formula used
% of improvement OR % of change from year to year
= PRESENT YEAR
PREVIOUS YEAR
*100
TABLE 1: TABLE SHOWING PRIME COST OF THE BIRDY EXPORTS PRIVATE LIMITED
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PARTICUL ARS COST PURCHASES % FROM YEAR TO YEAR RAW MATERIAL OF
BIRDY EXPORTS
200 6-07
200 708 6116052 4

118. 31
200809
200910 140220 233

126.70
51696786
110674736
--
180.96
CONSUMED % FROM YEAR TO YEAR DIRECT EXPENSES % FROM YEAR TO YEAR PRIME COST
55427723
5756958 1
103. 86
107615543
139336 138
129.48
--
186.93
42934069
3940828 1
91.7 9
87576 560
222.23
961415 44
109.78
--
98361792
9697786 2
98.5 9
195192103
235477 682
120.64
% FROM YEAR TO YEAR
--
201.27
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GRAPH 1: Graph showing the growth rate of prime cost over a period of three years
GRAPH 2: Graph showing the status of cost of purchases, raw-material consumed, direct expenses and prime cost of 2007-08, 2008-09 and 2009-10
ANALYSIS:
The above table shows the Cost of Purchases of the Company, Raw-Material consumed, Direct expenses incurred and Prime Cost over a period of three years. Here, Cost of Purchase was 118.31% in 2007-08 and in the year 2008-09 it was 180.96%, whereas in the year 2009-10 it is 126.70%. Raw- Material consumed was 103.86% in 2007-08 and in the year 2008-09 it was 186.93%, whereas in the year 2009-2010 it is 129.48%. In case Of Direct expenses, about 91.79% in the year in 2007-08, and in the year 2008-09 it is 222.23%, whereas in the year 2009-10 it is 109.78%.Likewise in case of Prime cost in the year 2007-08 it was 98.59% and in the year 2008-09 it was 201.27%, whereas in the year 2009-10 it is 120.64%.
INTERPRETATION:
From the above graph we can interpret that there is a upward trend in purchase of rawmaterial by the company. In 2007-08 it has increased to 118.31% and in 2008-09, there is an extreme increase to 180.96%. But during 2009-10, it decreased to 126.70% because the opening stock of raw-material is more in 2009-10 when compared to the opening stock of raw-material in 2008-09.
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Even in case of materials consumed there has been an upward trend in raw-materials consumed by the company. In 2007-08 it has increased to 103.86% and in 2008-09 it has increased to 186.93% accordingly even the production level is increased. But in 2009-10 even though the material consumption has decreased to 129.48%, but the production level has increased because of effective material management. In case of Direct expenses including Direct wages, there has been an upward trend in 2008-09 it has increased to 222.23%, this is due to increase in employment opportunities. In 2009-10 it is decreased to 109.78% when compare to 2008-09 due to removal of unnecessary labors. In 2007-08 has decreased to 91.79% because of less employment opportunities when compared to 2008-09 and 2009-10. In case of Prime cost there is an upward trend, In 2007-08, the prime cost is decreased to 98.59% because the direct expenses has decreased to 91.79%,and cost of purchases and raw-material consumed were increased to 118.31% and 103.86% respectively. In 200809, the Prime cost is increased to 201.27% because the direct expenses, raw-material consumed and cost of purchases are increased. In 2009-10, the Prime cost is increased to 120.64% because the direct expenses have increased to 109.78%, and raw material consumed is increased to 129.48%, whereas the cost of purchases increases to 126.70%.
TABLE 2: TABLE SHOWING FACTORY COST (GROSS)
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PARTICULARS FACTORY OVERHEAD % FROM YEAR TO YEAR DEPRECIATION % FROM YEAR TO YEAR FACTORY COST (GROSS) % FROM YEAR TO YEAR
2006-07 3708434 6 -3452926 -1388990 64 --
2007-08 513771 69 138.54 399884 7 115.81 152353 878 109.69
2008-09 5774860 9 112.40 4066070 101.68 2570067 82 168.70
2009-10 496593 03 85.99 503861 3 123.92 290175 598 112.90
GRAPH 3: Graph showing the growth rate of Factory cost (gross) over a period of three years.
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GRAPH 4: Graph showing the status of factory overhead , depreciation and factory cost (gross) by BIRDY EXPORTS PRIVATE LIMITED for the years 2007-08 to 2009-10 .
ANALYSIS:
The above table shows Factory overheads,Depreciation and factory cost (gross) over a period of three years. The factory overheads was 136.54% in 2007-08, in the year 200809 it was 112.40% ,whereas in 2009-10 it was 85.99%. In case of depreciation it was 115.81% in the year 2007-08 , in the year 2008-09 it was 101.68% , whereas in 2009-10 it was 123.92%. The factory cost (gross) was 109.69% in the year 2007-08, in the year 2008-09 it was 168.70%, whereas in 2009-10 it was 112,90%.
INTERPRETATION:
From the above graph we can interprit that there is a downward trend in Factory overhead. In 2007-08 the Factory overhead was 138.54% which reduced to 112.40% in the year 2008-09 due to removal of unnecssary employees.But in the year 2009-10 it has further reduced because of less employment oppurtunities. Thereby leads to reduction in providing salary. Depreciation has shown an upward trend .In 2009-10 it has increased to 123.92% when compare to the previous two years because of purchase of machinary.This clearly states that the company is more technical dependent. Here Factory cost or works cost( gross) is increased from year to year because of increase in Factory overheads and Depreciation in all the three years.
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PARTICULARS OPENING STOCK OF WORK IN PROGRESS % FROM YEAR TO YEAR CLOSING STOCK OF WORK IN PROGRESS % FROM YEAR TO YEAR FACTORY COST(NET) % FROM YEAR TO YEAR
2006-07 2007-08 653887 2 -200474 2 -143433 194 -2004742 30.66 1021558 2 509.57 1441430 38 100.49
2008-09 1021558 2 509.57 1750543 7

171.36
2009-10 1750543 7 171.36 1495243 8

85.42
2337282 61 162.15
2927285 97 125.24
TABLE 3: TABLE SHOWING FACTORY COST (NET) OXFORD 74 COLLEGE OF BUSINESS MANAGEMENT
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GRAPH 5: Graph showing the growth rate of factory cost (net) over a period of three years.
GRAPH 6: Graph showing the status of opening stock and closing stock of work in progress and factory cost(net) of BIRDY EXPORTS PRIVATE LIMITED for a period of three years.
ANALYSIS:
The above table shows the trend of Opening stock of Work in Progress, Closing stock of Work in Progress and Factory cost (Net) over a period of three years. In case of Opening stock of work in progress it was 30.66% in 2007-08 and in the year 2008-09 it was 509.57%, whereas in 2009-10 it was 171.36%. The Closing stock of work in progress was 509.57% in the year 2007-08, in the year 2008-09 it was 171.36% and in 2009-10 it was about 85.42%. The factory cost or works cost (net) was 100.49% in the year 2007-08, and in the year 2008-09 162.15%, whereas in the year 2009-10 the factory cost (net) is 125.24% .
Interpretation:
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By the above graph we can analyze that in the year 2007-08 the stock of work in progress was increased from 30.66% to 509.57% at the end of the financial year because of less labor working due to reduction in employment opportunity. By this they were unable to reach the task of finished goods. Later in the year 2008-09 the stock of work in progress was reduce from 509.57% to 171.36% because of increase in employment opportunities as well as increase in wages which help them to meet the requirement of the finished goods. In 2009-10, the stock was further reduced from 171.36% to 85.43% at the end of the year because of effective production level of the company. In the case of factory cost (net), there is a upward trend , in the year 2007-08 is 100.49% and in the year 2008-09 it is increased to 162.15% , further it was raised to 125.24% in the year 2009-10 because of the increase in prime cost and factory overheads .
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TABLE 4: TABLE SHOWING TOTAL COST OF PRODUCTION
PARTICULARS OFFICE ADMINISTRATION OVERHEADS %FROM YEAR TO YEAR TOTAL COST AND
2006-07 1292177 3 --
2007-08 2690027 9 208.18 1710433 17 109.39
2008-09 3059711 4 113.74 2643253 75 154.54
2009-10 3872127 2 126.55 3314498 69 125.40
OF 1563549 67 --
PRODUCTION % FROM YEAR TO YEAR
GRAPH 7: Graph showing the growth of total cost of production for a period of three years.
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GRAPH 8: Graph showing the status of office and administration overheads and total cost of production of BIRDY EXPORTS PRIVATE LIMITED for a period of three years.
ANALYSIS:
The above table shows office and administration overheads and total cost of production over a period of three years. In the year 2007-08, the office and administration overhead was 208.18%, in 2008-09 is 113.74% and in the year 2009-10 was 126.55%. The total cost of production was 109.39% in the year 2007-08 and in the year 2008-09, it was 154.54% and in 2009-10 was 125.40%.
INTERPRETATION:
From the above graph we can state that office and administration cost in 2007-08 was 208.18% because of increase in repairs and renewals of office premises, communication expenses, printing and stationary, electricity charges and legal charges .But it decreased to 113.74% in 2008-09 and 126.55%in 2009-10 when compared to 2007-08 because of removal of unnecessary labor and usage of e-mail has resulted in reduction in telephone charges, postage and telegram. The cost of production has an upward trend , that is 109.39% in 2007-08, 154.54% in the year 2008-09 and in the year 2009-10 it is about 125.40% because of increase in production level, prime cost and works cost. TABLE 5: TABLE SHOWING COST OF GOODS SOLD
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GRAPH 9:GRAPH 9: Graph showing the growth of total cost of goods sold for a period of three years. PARTICULARS OPENING STOCK OF FINISHED GOODS % FROM YEAR TO YEAR CLOSING STOCK OF FINISHED GOODS % FROM YEAR TO YEAR COST OF GOODS SOLD % FROM YEAR TO YEAR 2006-07 _NILL_ -380568 -644490 169.35 330896209 124.88 2007-08 380568 2008-09 644490 169.35 _NILL_ 553660 2009-10 _NILL_
155974399 170779395 264969865 -109.49 155.15
ANALYSIS:
In the above table shows the opening stock of finished goods and cost of goods sold over a period of three years. The opening stock of finished goods in 2007-08 was 380568 and in the year 2008-09 it was 644490, whereas it is NILL in the year 2009-2010.The closing stock of finished goods in 2007-08 was 644490 and in the year 2008-09 it was NILL, and in the year 2009-10 it was 553660.
INTERPRETATION:
We can interpret that the opening stock of finished goods during 2007-08 has increased from 380568 to 644490 because the total sales was less than the production level but in OXFORD 79 COLLEGE OF BUSINESS MANAGEMENT
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the next year 2008-09 all the units produced were completely sold ,thereby the closing stock of finished goods during 2008-09 was NILL .But in the year 2009-10 the closing stock of finished goods were increased to 553660.This clearly shows that the sales were too less than the production level. The graph also shows that the cost of goods sold has a upward trend at 109.49%, 155.15% and 124.88% in 2007-08, 2008-09 and 2009-10 respectively. This is because of increase in opening and closing stock of finished goods.
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TABLE 6: TABLE SHOWING COST OF SALES/ TOTAL COST
PARTICULARS SELLING DISTRIBUTION OVERHEADS % FROM YEAR TO YEAR TOTAL COST % FROM YEAR TO YEAR AND
200607
2007-08
2008-09
2009-10
3547589
3119277
4818074
6737523
-159521 988 --
87.93 1738986 72 109.01
154.46 2697879 39 155.14
139.84 3376337 32 125.15
GRAPH 10: Graph showing the growth of total cost for a period of three years.
GRAPH 11: Graph showing the status of selling and distribution overheads and total cost of BIRDY EXPORTS PRIVATE LIMITED for a period of three years.
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ANALYSIS:
The above table states that selling and distribution overheads and total cost for a period of three years. The selling and distribution overheads was 87.93% in 2007-08 and in the year 2008-09 it was 154.46% whereas in the year 2009-10 , it is 139.84%. Likewise, the total cost in the year 2007-08 is 109.01% and about 155.14% in the year 2008-09, PARTICULARS PROFIT % FROM YEAR TO YEAR SALES % FROM YEAR TO YEAR 2006-07 9821921 -1693439 09 -2007-08 2008-09 2009-10
10155361 26019981 12122066 103.39 1840540 33 108.69 256.21 2958079 20 160.72 46.59 3497557 98 118.24
whereas 125.15% in the year 2009-10.
INTERPRETATION:
As the above graph states that the selling and distribution o/h in the year 2007-08 was decrease to 87.93% because of less advertising, products are well established in market as they are servicing people from many years with good quality of fabrics. But in the year 2008-09 and 2009-10 it has increased to 154.46% and 139.84% respectively because of warehouse charges, transportation expenses, salary of salesmen Etc In case of total cost it shows an upward trend as the cost increases from year to year like in the year 2007-08 it was 109.01% and then it increased to 155.14% in the year 2008-09 and later in the year 2009-10 it increased to 125.15% because of increase in cost of goods sold. TABLE 7: TABLE SHOWING NET PROFIT AND SALES
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GRAPH 12: Graph showing the status of Net Profit and Sales for a period of three years.
ANALYSIS:
The above table provides the status of Net Profit and the overall sales for the period of three years. In 2007-08, the profit is 103.39% and in the year 200809 it is 156.21% , whereas it is 46.59% in the year 2009-10. Likewise, the sales during the year 2007-08 was 108.69% , in 2008-09 it is 160.72% and about 160.72% in the year 2009-10.
INTERPRETATION:
The above graph states that the profit during the year 2007-08 was increased upto 103.39% and there was an extreme increase in 2008-09 of about 256.21% because of effective production level of the company. But in 2009-10, the profit was reduced to 46.59% due to purchase of machinery the total cost becomes more, thereby it reduces the profit. Here the sales are at upward trend of about 108.69% in 2007-08 and increase to 160.72% in 2008-09 because in this year they have sold the entire stock of finished goods of the year .But later it was reduced to 118.24% because total sales made were less than the production level.
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TABLE 8: TABLE SHOWING PROFITABILITY OF THE COMPANY

THROUGH MARGINAL COSTING. PARTICULARS SALES LESS LESS VARIABLE COST CONTRIBUTION FIXED COST PROFIT 2006-07 169343909 100989476 68354433 54378950 13975483 2007-08 184054033 118542732 65511301 63830702 1680599 2008-09 295807920 190074281 105733639 102347689 3385950 2009-10 349755798 218162355 131593443 117472038 14121405
GRAPH 13: Graph showing the profitability of the BIRDY EXPORTS PRIVATE LIMITED for a period of four years through Marginal Costing Technique.
ANALYSIS:
By the above table we can analyze the sales, contribution , profit , variable cost and fixed cost over a period of four years .In the year 2006-07, the sales was 169343909 and in the year 2007-08 , the sales was 295807920 and 349755798 in the year 2008-09,2009-10 respectively. Here, the contribution shows an upward trend from year to year that is in 2006-07, it has increased to 68354433 and in the year 2007-08 it is 65511301 and the contribution was 105733639 in the year 2008-09, where as in the year 2009-10, it is 131593443. Likewise, the status of profit in the year 2006-07 is 13975485 and in 2007-08, the profit was 1680599, whereas in the year 2008-09 was 3385950 and in the year 2009-10 the profit was 14121405.
INTERPRETATION:
With the help of the above graph we can interpret that Sales have an upward trend for a period of four years. By this we can say that no: of units sold over a year are being increased form year to year. OXFORD 84 COLLEGE OF BUSINESS MANAGEMENT
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The variable cost is also showing an upward trend from 100989476 in the year 2006-07 to 218662355 in the year 2009-10 because the no: of the units produced and sold are increased year to year .Therefore the Marginal cost incurred also increases. In case of contribution, even though it shows an upward trend in overall period of four years. But in 2007-08 the contribution was decreased even though the no: of units sold were more when compare to 2006-07 because of extreme increase in variable cost such as direct wages, direct material and so on. In case of Net Profits, in the year 2006-07 the profit is 13975483 and in the year 2007-08, the profits has decreased to 1680599 because of decrease in contribution upto 6551130, even though the sales were increased in the same year 2007-08 and the same can be applied for the further years that is 2008-09 and 2009-10 which is providing less percentage of profits in relation to their sales in respective years. The main reason here is decrease in contribution.
TABLE 9-
TABLE SHOWING MARGINAL COST OF FOUR YEARS FROM
2006-07 TO 2009-10 PARTICULARS SALES (A) CONTRIBUTION (B) MARGINAL COST (A-B) MARGINAL COST AS A % ON SALES 200607 16934390 9 68354433 10098947 6 59.64 2007-08 184054033 65511301 118542732 64.41 2008-09 295807920 105733639 190074281 64.26 2009-10 349755798 131593443 218162355 62.38
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GRAPHGRAPH 14: Graph showing Marginal cost of BIRDY EXPORTS PRIVATE LIMITED for a period of four years.
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ANALYSIS:
By the above table we can analyze sales, contribution, Marginal cost for the period of four years. Here the sales during the four years shows an upward trend from 169343909 in 2006-07 , 184054033 in the year 2007-08 and 295807920 in the year 2008-09 , whereas in the year 2009-10 the sales was 349755798. The contribution is 68354433 in the year 2006-07, in the year 2007-08 it is 65511301 and in the year 2008-09 it is 105733639, whereas in the year 2009-10 it is 131593443. In case of Marginal cost, the % of Marginal cost to sales is an upward trend from 2006-07 to 2008-09 and then in the year 2009-10 it has decreased to 62.38%.Here the % of change of Marginal cost is calculated as Marginal cost divided by sales. INTERPRETATION: With the help of above graph the Marginal costing during 2006-07 is 59.64% which increased to 64.41% in the year 2007-08 and then in the year 2008-09 it has slightly decreased with a difference of 0.15% and further in the year 2009-10 it has reduced to 62.38%. By this it clearly indicates that contribution percentage during the year 2007-08 and 2008-09 is low when compared to the year 2006-07 and 2009-10 because as the Marginal cost increases the contribution decreases (that is, Higher percentage the Marginal cost , lower will be the percentage of contribution) and at the same time we can also observe that the Marginal cost decreases to 62.38% in the year 2009-10 which shows a good sign of improvement because as the Marginal cost decreases, the contribution percentage increases.
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A STUDY ON COST MANAGEMENT PRIVATE LIMITED TABLE 10:
BIRDY EXPORTS
TABLE SHOWING FIXED COST OF PREVIOUS YEARS FROM
2006-07 TO 2009-10.
PARTICULARS CONTRIBUTION (A) PROFIT (B) FIXED COST (A-B) FIXED COST AS A % ON CONTRIBUTION
2006-07 68354433 13975483 54378950

79.5 5
2007-08 65511301 1680599 63830702

97.4 3
2008-09 105733639 3385950 102347689

96. 80
2009-10 131593443 14121405 117472038

89.27
GRAPH 15: Graph showing Fixed cost for a period of four years.
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ANALYSIS:
In the above table, it clearly shows that contribution is 68354433 in 2006-07 , in the year 2007-08 the contribution is 65511301 and the contribution about 105733639 in the year 2008-09 , whereas in the year 2009-10 it is 131593443.The profit is 13975483 in the year 2006-07 and 1680599 in the year 2007-08, in the year 2008-09 the profit is 102347689, whereas in the year 2009-10 the profit is 117472038. Here fixed cost is calculated as Contribution Profit and the % of change of fixed cost from year to year is calculated as Fixed cost divided by Contribution. Here the fixed cost has increased to 97.43% in 2007-08, later in the year 2008-09 it is 96.80% and in the year 2009-10 it is 89.27%. INTERPRETATION: The above graph clearly states that percentage of change of fixed cost in the year 2006-07 is 79.55% which increased to 97.43% in the year 2007-08 , this results in the decrease of profits from 13974583 to 1680599 of the respective years mentioned above, and later in the year 2008-09 the percentage of fixed cost were decreased to 96.80% which results in the increase in profits. Further in the year 2009-10 it was decreased to 89.27% which increases the profit upto14121405. By this interpretation it clearly states that the percentage of fixed cost increases , the profits decreases and vice-versa.(that is , higher the % of fixed cost , lower will be the profit and likewise lower the % of fixed cost , higher will be the profit.)
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TABLE 11: TABLE SHOWING PROFITABILITY OF VARIOUS PRODUCTS PRODUCED BY BIRDY EXPORTS PRIVATE LIMITED THROUGH MARGINAL COSTING FOR THE YEAR 2009-10 PARTICULARS SALES QUANTITY SALES LESS VARIABLE COST CONTRIBUTION LESS FIXED COST PROFIT MEN 60417 pcs 37652630 23984945 13667685 12914738 752947 WOMEN 256018 pcs 76586194 49282917 27303277 25007048 2296229 CHILDREN 181434 pcs 101933567 64931285 37002282 34964378 2037904 BABYS 128702 pcs 37272100 23984904 13287196 12913958 373238
GRAPH 16: Graph showing the profitability of 2009-10 of various products produced
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ANALYSIS:
By the above table we can analyze that sales , contribution and profit of various products for the year 2009-10 . Here the sales of each product shows a positive sign towards the profit, By the sales of various products the men garment provides the sales of 37652630, the women garments provides sales of 76586194, and the children garments provides the sales of 1019,33,561, whereas the sales of babys garments is 37270100. The variable cost of men garments is 23984945 and for women garments it is 49282917 and whereas children and babys garments is 64931285 and 23984904 respectively. The contribution is 13667685 for men garments and 27303277 in case of women garments, whereas 37002282 and 13287196 for children and babys garments respectively. The profits of each product are 752947 from sale of men garments, 2296229 of profit from women garments and 2037904 of profit from children garments and the profit of babys garments are 373238.
INTERPRETATION:
With the help of the above graph shows that the sale of children garments is the highest and it forms as a backbone of the organization. Here we can also make an interpretation that the variable cost of each and every product produced by the company is comparatively very high because of use of direct labor, direct material and so on, by this the contribution of the products decreases and further it leads to decrease in profit percentage. So, precautions as to be taken in order to reduce variable cost and raise contribution level of the products as mentioned above. Thereby leads to increase in profit percentage.
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Table 12: TABLE SHOWING MARGINAL COST OF VARIOUS PRODUCTS FOR THE YEAR 2009-10 PARTICULARS SALES (A) CONTRIBUTION (B) MARGINAL COST (A-B) MARGINAL COST AS A % ON SALES MEN 37652630 13667685 23984945 63.70 WOMEN 76586194 27303277 49282917 64.35 CHILDREN 101933567 37002282 64931285 63.70 BABYS 37272100 13287196 23984904 64.35
GRAPH 17: Graph showing the Marginal cost of various products produced at BIRDY EXPORTS PRIVATE LIMITED for the year 2009-10.
ANALYSIS:
The above table shows sales, contribution and Marginal costs of various products produced during the year 2009-10. By the sales of various products the men garment provides the sales of 37652630, the women garments provides sales of 76586194, and the children garments provides the sales of 101933561, whereas the sales of babies garments is 37270100. The contribution is 13667685 for men garments and 27303277 in case of women garments, whereas 37002282 and 13287196 for children and babys garments respectively. From the above table we can also analyze that Marginal cost is derived from the calculation that is Contribution Fixed cost and the % of change from product to product is derived from calculating Fixed cost divided with contribution.
INTERPRETATION:
BIRDY EXPORTS
From the above graph we can interpret that Marginal cost on women garments (64.35%) and babys garments are (64.35%) which shows slightly more than the Marginal cost of men garments (63.70%) and children garments (63.70%). By this the contribution from women garments and babys garments is less when compare to men and children garments, because as the Marginal cost increases, the contribution is decreased. Thereby, we can state that contribution is less healthy .In other way we can also state that men and children garments are two products which provide more % of contribution for the year 2009-10. By the graph we can observe that marginal cost of the product is more .There is a need for the company to reduce their variable on all these products to have a control on marginal cost.
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Table 13: TABLE SHOWING FIXED COST OF VARIOUS PRODUCTS FOR THE YEAR 2009-10
PARTICULARS CONTRIBUTION (A) PROFIT (B) FIXED COST(A-B) FIXED COST AS A % ON CONTRIBUTION
MEN 13667685 752947 12914738 94.49
WOMEN 27303277 2296229 25007048 91.58
CHILDREN 37002282 2037904 34964378 94.49
BABIES 13287196 373238 12913958 97.17
GRAPH 18: Graph showing the Marginal cost of various products produced at BIRDY EXPORTS PRIVATE LIMITED for the year 2009-10.
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ANALYSIS:
By the above table we can state the status of contribution, profit and fixed cost of various products produced during 2009-10. The contribution is 13667685 for men garments and 27303277 in case of women garments, whereas 37002282 and 13287196 for children and babys garments respectively. The profits of each product are 752947 from sale of men garments, 2296229 of profit from women garments and 2037904 of profit from children garments and the profit of babys garments are 373238. The fixed cost is calculated by the difference of contribution and profit and its % of change from product from product to product is derived from dividing contribution by fixed cost.
INTERPRETATION:
The above graph states that the percentage of fixed cost of the men garments was 94.49%, and the fixed cost of children garments was about 94.49%, whereas the fixed cost percentage of babys garments is 97.17%. is very much when compared to the percentage of fixed cost of women garments which is about 91.58%, this indicates that the profit on these products is low when compare to woman garments because as the percentage of fixed cost increases, the profits decreases and vice-versa.(that is , higher the % of fixed cost , lower will be the profit and likewise lower the % of fixed cost , higher will be the profit.)
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TABLE 14: TABLE SHOWING THE POSITION OF THE BIRDY EXPORTS PRIVATE LIMITED THROUGH MARGINAL COSTING SELLING PRICE PER PIECE. PARTICULARS Sales in quantity Sales per pcs Variable cost pcs per 2006-07 293668 576.65 343.89 232.76 185.17 47.59 2007-08 319178 576.62 371.4 205.25 199.98 5.27 2008-09 400749 738.14 474.3 263.84 255.39 8.45 2009-10 959523 364.51 227.36 137.14 122.43 14.72
Contribution per pcs Fixed cost per pcs Profit per pcs
Graph 19: Graph showing the status of the company for the period of four years through Marginal costing selling price per piece.
ANALYSIS:
The above table clearly shows sales per piece, variable cost per piece, contribution and fixed cost per piece for a period of four years from 2006-07 to 2009-10 . Here the sales per piece varies from year to year such as Rs.576.65 per pcs in 2006-07 ,Rs. 576.62 per piece in the year 2007-08, whereas Rs.738.14 and Rs.364.51 per piece in the year 200809 and 2009-10 respectively. The variable cost also increases from year to year, but in the year 2009-10 it decrease to Rs.227.36. The contribution per piece from the year 2006-07 is Rs 232.76, for the year 2007-08 is Rs 205.25 and in the year 2008-09 in Rs.263.84 per piece, whereas about Rs 137.14 per piece in the year 2009-10. Fixed cost shows an upward trend except in the year 2009-10. The profit per piece in the year 2006-07 is Rs.47.59, in the year 2007-08 it is Rs.5.27, and in the year 2008-09 it is Rs.8.45, whereas in the year 2009-10 the profit per piece was Rs.14.72.
INTERPRETATION:
BIRDY EXPORTS
By the above graph we can interpret that sales per piece is showing an upward trend up to 2008-09 and then in the year 2009-10 it has decreased to Rs.364.15, even though the no: of units (pieces) sold were more because it was a stage of economic recession, and due to this the profit came down. Thereby they sold garments at fewer prices. The variable cost per piece goes in an upward mode because of direct labor, material etc .The precautions have to be taken by the company to reduce the variable cost. Here the contribution per piece in the year 2006-07 is Rs.232.76 which decreased to Rs.205.25and at the same time the fixed cost increased from Rs185.17 to Rs 199.98 which will have a tremendous effect on profit and leads to decrease in profit per piece. In 2008-09 the contribution increases, thereby the profit per piece also increases, in 200910 though the no: of units sold is more, but sales per unit sold was quote very much less , thereby it reduced in the profits when compared to 2006-07. As in the year 2006-07 even though the no: of units sold was less but resulted in huge profit because of quoting more sale per unit.
TABLE 15: TABLE SHOWING THE EFFECT ON PROFIT AND VARIABLE COSTS DUE TO CHANGE IN ESTIMATED SALES MIX FOR THE YEAR 09-10
MEN GARMEN TS 6.30% WOMEN GARMENT S 18.90% BABY'S GARMENT S 13.41% TOTAL PROFI T 54603 18
PARTICULARS Previous sales mix Previous profit position % of profit over sales Estimated sales mix Sales units for estimated sales mix
CHILDREN GARMENTS 26.68%
752947
2% 7% 67167 4185931 4 2666462 7 1519468 7 1291473 8
2296229
3% 25% 239880 10125718 6.1 65158604 .4 36098581 .68 25007048
2037904
2% 28% 268766 107009182 .9 68164432. 92 38844749. 98 34964378
373238
1% 5.29% 50758 14699516 .8 9459260. 88 5240255. 92 12913958
SALES IN VALUE LESS- VARIABLE COST CONTRIBUTION LESS- FIXED COST
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227994 9 1109153 3.68
BIRDY EXPORTS
PROFIT
3880371. 98
7673702 .08
95781 52
GRAPH 20: Graph showing the effect on profit and variable costs due to change in estimated sales mix for the year 2009-10
ANALYSIS:
In the above table it states the previous sales mix of men garments, women garments , children and babys garments which is 6.30%,18.90%,26.68% and 13.41% respectively and also provides previous profits position of the above said garments, here the table provides information about the % of profit over sales which is 2% of men garments , 3% of women garments , 2% of children garments and 1% of babies garments. The table also provides the estimated sales mix and also applies Marginal costing technique for the estimated sales mix in order to know the change in effect on profit and variable cost if the sales mix changes. By the estimated sales mix the profits earned are more when compare to the previous sales mix profit.
INTERPRETATION:
Here we can interpret the due changes in sales mix of men garments (6.30%), women garments (18.90%), children garments (26.68%) and babys garments (13.41%) to 7%, 25%, 28% and 5.29% respectively. It has resulted in increase in the variable cost and at the same time the profits also increases, the fixed cost remains constant. Here, even though the babys garments are incurring loss through the change in sales mix , but when we compare overall previous sales mix profit position to the present changed sales mix profit position, about Rs 4117834 is earned more than previous sales mix profit position.
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MEN GARMENT S 39535354. 58 23925039. 04 15610315. 54 12882481. 54 2727834 WOMEN CHILDREN GARMENT GARMENT S S 80415630. 107030284 7 .9 49159787. 54 31255843. 16 24944569. 88 6311273.2 74 64768981. 04 42261303. 81 34876980. 29 7384323.5 2
BIRDY EXPORTS
PARTICULARS SALES VALUE INCREASE BY 5% VARIABLE COST DECREASE BY 5% CONTRIBUTION FIXED DECREASE BY 5% PROFIT COST
BABYS TOTAL GARMENT PROFIT S 39135675. 2 23924924. 75 15210750. 45 12881664. 25 2329086.1 95 18752517
TABLE 16: TABLE DEPICTING THE OVERALL EFFECT IN PROFIT IF THERE IS ANY CHANGE IN FIXED AND VARIABLE COSTS OF 2009-10
GRAPH 21: Graph depicting the overall effect in profit if there is any change in fixed and variable costs of 2009-10
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ANALYSIS:
The above table clearly states the overall effect in profit, if there are any changes made in fixed and variable cost for the year 2009-10. Here the sales value is increased by 5%, variable cost and fixed cost is decreased by 5%, by this the contribution shows positive sign. The profits of men garments is 2717834, women garments is 6311273.274, children garments is 7384323 and whereas babys garments is 2329086.19.
INTERPRETATION:
The above graph makes an interpretation that estimation is made in order to know the effect on profit, if there is any decrease in fixed cost and variable cost. From the graph we can infer the effect on the net profit .If there is slight increase in sales value, it will have a lot of effect on the profits earned by the company.
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TABLE 17: TABLE SHOWING EFFECT ON SALES, VARIABLE COSTS TO EARN A PROFIT OF 20 LAKHS FOR THE YEAR 2009-10.
PARTICULAR S TOTAL SALES VARIABLE COST CONTRIBUTIO N FIXED COST PROFIT MEN GARMENTS 41088092 26173354 14914738 12914738 2000000 WOMEN GARMENTS 75755266 48748218 27007048 25007048 2000000 CHILDREN GARMENTS 101829149 64864771 36964378 34964378 2000000 BABY'S GARMENTS 41835352 26921394 14913958 12913958 2000000
GRAPH 22: Graph showing effect on sales, variable costs to earn a profit of 20 lakhs for the year 2009-10
ANALYSIS:
By the above table, we can analyze the effect on sales, variable cost to earn of profit of 2000000 by each product produced by the company. Here in order to find out the sales / total sales for the estimated profit of 2000000 of each product. The following formulae are taken into consideration.
TOTAL SALES = FIXED COST+ESTIMATED PROFITPROFIT-VOLUME RATIO
Here, FIXED COST = Total of fixed cost of each product defined in the table. ESTIMATED PROFIT = 2000000 for each product PROFIT-VOLUME RATIO = CONTRIBUTIONSALES
Here to find out CONTRIBUTION, The formulae CONTRIBUTION =PROFIT+ FIXED COST, as fixed cost remains constant and VARIABLE COST = SALES- CONTRIBUTION.
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INTERPRETATION:
By the above graph we can interpret that we will be able to earn the profit of 2000000 for each product when the sales in value increases and the sales in value increases only if more no: of pieces are sold . Here the fixed cost remains the constant, and the variable cost will be more because the direct expenses, direct labor, material etc.., will be increased.
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TABLE 18: TABLE SHOWING BREAK EVEN SALES AND BREAK EVEN QUANTITY, MARGIN OF SAFETY FOR A PERIOD OF FOUR YEARS. PARTICULARS SALES SALES IN QUANTITY VARIABLE COST CONTRIBUTION FIXED COST PROFIT BREAK EVEN SALES BREAK EVEN QUANTITY MARGIN OF SAFETY MARGIN OF SAFETY AS A % OF TOTAL SALES PROFIT- VOLUME RATIO Contribution per pcs 2006-07 169343909 293668 PCS 100989476 68354433 54378950 13975483 134720508.3 233626.697 34623400.67 20.44561323 0.403642702 232.76 2007-08 184054033 319178 PCS 118542732 65511301 63830702 1680599 179332389.3 310990.0219 4721643.733 2.565357388 0.355935156 205.25 2008-09 295807920 400749 PCS 190074281 105733639 102347689 3385950 286335146.4 387915.7406 9472773.624 3.202339418 0.35744019 263.84 2009-10 349755798 959523 PCS 218162355 131593443 117472038 14121405 312223204 856584.7893 37532594.04 10.73108559 0.376243779 137.14
GRAPH 23: Graph showing break even sales and margin of safety of Birdy exports private limited for a period of four years.
GRAPH 24: Graph showing Break Even Quantity of Birdy exports private limited for a period of four years.
ANALYSIS:
The above table provides information about Break-even sales, Break- even quantity, Margin of safety, Profit-Volume ratio for the period of four years from 2006-07 to 200910 .Here, break even sales is a point at which the total cost incurred during the year is recovered and it is a point, where the profit starts generating after recovering the total cost, whereby the BEP in the year 2006-07 is 134720508, in the year 2007-08 is 179332389 and in the year 2008-09 is 286335146 , where as in the year 2009-10 is OXFORD 103 COLLEGE OF BUSINESS MANAGEMENT
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312223204. Margin of safety, in short it tries to know how much above they are from the BEP, whereby the Margin of safety in 2006-07 is more when compare to other years. The formulae used are as follows: BREAK-EVEN POINT (in units)= TOTAL FIXED COSTCONTRIBUTION PER
UNIT=FS-V
BREAK-EVEN POINT (in rupees)= TOTAL FIXED COST CONTRIBUTION=F*SSV
MARGIN OF SAFETY=
ACTUAL SALES - BREAK EVEN SALES
PROFIT-VOLUME RATIO =Contribution Sales*100
Margin of safety as a percentage of total sales:=MARGIN OF SAFETYTOTAL

SALES100
INTERPRETATION:
The above graph shows the break even sales, margin of safety and break even quantity over a period of four years, in the year 2006-07 the % of margin of safety over sales is high of about 20.45% when compare to other years is high this shows that they have crossed the BEP and earning more profits, and even the P-V RATIO of the same year is high which leads to huge profits. In the year 2007-08, the % of margin of safety over sales is low of about 2.56%, this shows that even though they have crossed BEP , they are earning less profits because the Break even sales are more as fixed cost to be recovered are high and P_V RATIO of the year is less. Hence the profit earning is less. In the year 2008-09, the % of margin of safety over sales is more of about 3.20%,when compared to its previous year it has been increased but even though even though they have crossed BEP , they are earning less profits because the Break even sales are more, as fixed cost to be recovered are high and P_V RATIO of the year is less. Hence the profit earning is less. In the year 2009-10, the % of margin of safety over sales is more of about 10.73%, when compared to its previous two year it has been increased, but even though they have crossed BEP, they are earning less profits because the Break even sales are more, as fixed
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cost to be recovered are high and P_V RATIO of the year is less. Hence the profit earning is less.
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TABLE 19: TABLE SHOWING COST OF MATERIALS CONSUMED AND STOCK TURNOVER RATIO FOR THE YEAR 2007-08
COST MATERIALS CONSUMED 43067356 6440302 OF STOCK TURN STOCK TURN OVER RATIO OVER RATIO expressed in number of (STOR) days 7 TIMES 2.35 TIMES 52 DAYS 156 DAYS
PARTICUL ARS FABRIC ACCESSO RIES
GRAPH 25: Graph showing stock turnover ratio (STOR) expressed in number of days for the year 2007-08
ANALYSIS: The above table shows the cost of Fabric and Accessories consumed during the year 2007-08 and the Stock turnover Ratio of Fabric is 7 times whereas 2.35 times in case of Accessories . The Stock turnover Ratio is expressed in number of days, in case of Fabric it is 52 days and in case of Accessories it is 156 days. The calculations for the above table are as follows.
Particulars Opening stock of raw- materials ADD LESS Cost of Purchase Closing stock of raw-materials RAW-MATERIAL CONSUMED Calculation of cost of material consumed:
2007-2008 Fabric 3258839 45460062 5651545 43067356 Accessories 1427542 7638539 2625779 6440302
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Particulars
2007-2008
Average stock= OPENING STOCK OF RAW-MATERIAL +CLOSING STOCK OF RAW-MATERIAL2
Fabric Average stock of raw6084612 materials Calculation of Average stock of raw-materials:
Accessories 2740432
Calculation of Inventory turns and Inventory period : Particulars 2007-2008

INVENTORY TURNS = INVENTORY PERIOD
RAW-MATERIAL = 365 OR 366 DAYS CONSUMED AVERAGE INVENTORY TURNS STOCK OF RAW-MATERIALS
Fabric Inventory turns and period of raw-materials 7 times
Accessories 2.35 times
Fabric 52 days
Accessorie s 156 days
INTERPRETATION: OXFORD 107 COLLEGE OF BUSINESS MANAGEMENT
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From the above graph we can infer that Fabric has higher conversion rate, hence it is moving faster than Accessories. We can also observe that Fabric is in stock for lesser number of days before getting consumed than Accessories. Hence, Fabric is fast moving then Accessories. TABLE 20: TABLE SHOWING COST OF MATERIALS CONSUMED AND STOCK TURNOVER RATIO FOR THE YEAR 2008-09
PAP PARTICULARS FABRIC ACCESSO RIES COST OF STOCK TURN STOCK TURN OVER MATERIALS OVER RATIO RATIO expressed in CONSUMED (STOR) number of days 7.56 78528893 48 DAYS TIMES 5.94 21169944 61 DAYS TIMES
ANALYSIS: The above table shows the cost of Fabric and Accessories consumed during the year 2007-08 and the Stock turnover Ratio of Fabric is 7.56 times whereas 5.94 times in case of Accessories . The Stock turnover Ratio is expressed in number of days, in case of Fabric it is 48 days and in case of Accessories it is 61 days.
Calculation of cost of material consumed:
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A STUDY ON COST MANAGEMENT PRIVATE LIMITED Particulars Opening stock of raw- materials ADD LESS Cost of Purchase Closing stock of raw-materials RAW-MATERIAL CONSUMED
BIRDY EXPORTS
2008-2009 Fabric 5651545 82337992 9460644 78528893 Accessories 2625779 204200038 1875873 21169944
Particulars
2007-2008
Fabric Average stock of raw10381867 materials Calculation of Average stock of raw-materials:
Accessories 3563716
Calculation of Inventory turns and Inventory period : Particulars OXFORD 109 COLLEGE 2007-2008 OF BUSINESS MANAGEMENT

INVENTORY TURNS =
BIRDY EXPORTS
INVENTORY PERIOD
RAW-MATERIAL = 365 OR 366 CONSUMED AVERAGE INVENTORY TURNS STOCK OF RAW-MATERIALS
DAYS
Fabric Inventory turns and period of raw-materials 7.56 times
Fabric 48 days
Accessorie s 61 days
INTERPRETATION: From the above graph we can infer that Fabric has higher conversion rate, hence it is moving faster than Accessories. We can also observe that Fabric is in stock for lesser number of days before getting consumed than Accessories. Hence, Fabric is fast moving then Accessories. TABLE 21: TABLE SHOWING COST OF MATERIALS CONSUMED AND STOCK TURNOVER RATIO FOR THE YEAR 2009-10
COST MATERIALS CONSUMED OF STOC TURN STOCK TURN OVER OVER RATIO RATIO expressed in (STOR) number of days 7.24 101230501 50 DAYS TIMES 31707671 9.17 TIMES 40 DAYS
PARTICUL ARS FABRIC ACCESSO RIES
ANALYSIS: The above table shows the cost of Fabric and Accessories consumed during the year 2007-08 and the Stock turnover Ratio of Fabric is 7.24 times whereas 9.17 times in case of Accessories . The Stock turnover Ratio is expressed in number of days, in case of Fabric it is 50 days and in case of Accessories it is 40 days. OXFORD 110 COLLEGE OF BUSINESS MANAGEMENT
BIRDY EXPORTS
Particulars Opening stock of raw- materials Cost of Purchase Closing stock of raw-materials RAW-MATERIAL CONSUMED Calculation of cost of material consumed:
ADD LESS
2009-2010 Fabric 9460644 100828001 9058144 101230501
Accessories 1875873 32994266 3162468 31707671
Particulars
2007-2008
Fabric Average stock of rawmaterials 13989716
Accessories 3457107
Calculation of Average stock of raw-materials:
Calculation of Inventory turns and Inventory period : Particulars OXFORD 111 COLLEGE 2007-2008 OF BUSINESS MANAGEMENT

INVENTORY TURNS =
BIRDY EXPORTS
INVENTORY PERIOD
RAW-MATERIAL = 365 OR 366 CONSUMED AVERAGE INVENTORY TURNS STOCK OF RAW-MATERIALS
DAYS
Fabric Inventory turns and period of raw-materials 7.24 times
Fabric 50 days
Accessories 40 days
INTERPRETATION: From the above graph we can infer that Accessories has higher conversion rate, hence it is moving faster than Fabric. We can also observe that Accessories is in stock for lesser number of days before getting consumed than Fabric. Hence, Accessories is fast moving then Fabric.
FINDINGS;
1. From the study it is observed that the company does not maintain cost. 2. Even though raw-material consumed during the year 2009-10 has decreased to 129.48% when compare to 2008-09, but the production level has increased because of effective material management. 3. In the year 2009-10, the direct expenses have decreased to 109.78% when compare to 2008-09 due to removal in unnecessary labors. 4. Depreciation on Machinery has an upward trend in 2009-10 when compare to 2008-09 as well as 2007-08 because purchase of Machinery. This clearly states that the company is more technical dependent. 5. The stock of work-in-progress when compared to 2008-09, it has reduced to 85.43% because they make use of machinery to the maximum extent and thereby it leads to effective production level of the company for the year 2009-10.
6. The administration expenses were reduced to 2009-10 due to usage of e-mail has
resulted in reduction in the telephone charges, postage and telegram. 7. The cost of production in the year 2009-10 has increased due to increase in production level, Prime cost and works cost.
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8. In the year 2009-10, the closing stock of finished goods was increased to 553660. This shows the sales were too less than the production level. But, the cost of goods sold has an upward trend year to year because increase in opening and closing stock of finished goods. 9. Selling and distribution expenses in 2008-09, 2009-10 has increased to 156.46% and 139.84% respectively because of warehouse charges, salary of salesmen and transportation charge. 10.The total cost is increasing from year to year because of increase in cost of goods sold. 11.Profit in the year 2009-10, reduced due to purchase of machinery, the total cost becomes more and it was period of economic recession, this effected the company a lot, thereby all these factors reduces profit. 12.In the year 2008-09, the sales were increased to 160.72% because in this year the entire stock of finished goods were sold. But, later in 2009-10 it reduced to 118.24% because total sales were less than production level.
13.The marginal cost in the year 2007-08 was 64.41% which decreased to 64.29% in
2008-09 and it further decreased to 62.38% in the year 2009-10. This is a good sign, by this the contribution increases to 0.355%, 0.357% and 0.376% respectively. 14.The fixed cost in the year 2007-08 was 97.43% which decreases to 96.80% and further decreased to 89.27%in the year 2009-10.
15. Regarding the price of Birdy Exports Private Limited it has observed that the price is
reasonable. 16.There is a well developed research and development department in the company.
17.The activities of the company are decided according to their specialization and there
is proper departmentation.
18..Employees are provided with good canteen and good sanitary facilities
19.The company well utilizes the experience of the employees by keeping the labor turnover ratio at a minimum level 20. Fabric and thread is the major raw-materials consumed by the Birdy exports private limited. 21.Birdy is approved by the government. Every products produced is bearing ISI MARK and for Exporting it got approved with OEK TEX CERTIFICATION by the government. OXFORD 113 COLLEGE OF BUSINESS MANAGEMENT
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22. Birdy does not follow any strategies in relation to advertising, marketing and selling. 23. Birdy exports deal with more than 130 customers.
SUGGESTIONS AND RECOMMENDATIONS:

It would be beneficial to the company if it maintains cost accounts so that analysis of cost is made and a planning procedure can be undertaken for future. Birdy exports as to increase skilled employees and reduce unskilled labor. From the above study we can find tremendous increase in sales figure from year to year. The company must create more brand awareness. Birdy exports private limited has to increase the use of E-mails to reduce the cost of Postage and Telegrams From the study, the present sales mix for the men garments, women garments, children garments and kids garments is providing less profit. Therefore sales mix have to be changed and it is better to concentrate more on women garments to get more profits. The variable cost has to be reduced as by this the contribution decreases and further it effects profits .so, direct labor, direct materials etc., have to be reduced Birdy exports has to improve their Margin of safety level because in the year 2009-10 it has decreased to 10.73% when compare to 2006-07. Birdy exports should open a website to enable its customers to get up-to-date information about Birdy exports just at the click of the mouse. Further this will reduce the total ordering cost of all its products.
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CONCLUSION:
The Birdy exports private limited which is providing wide range of patterns for men, women, children and kid garments and many more has made a sufficient name and fame in the minds of the people for its quality. The availability and quality of the product is satisfying the need of the ultimate consumer, it has made a sufficient mark amongst the various garment export industries. Even though the overall cost is high, but there is a good production levels maintained by the company. By and large the survey has revealed that the financial position of Birdy exports private limited is good.
LEARNING AND EXPERIENCE:

This report on the organization study and the interpretation of the statements of the BIRDY EXPORTS PRIVATE LIMITED gave me the good learning practice, great industrial practice and great experience in my career and study. This project training programme has helped me to understand management better inspite of practical applications. This programme gave me a opportunity to work in BIRDY EXPORTS PRIVATE LIMITED, BENGALURU and it gave the view of practical application of theoretical aspects. My own learning experiences in this programme in BIRDY EXPORTS PRIVATE LIMITED are: It gets the practical exposure of functional departments of BIRDY EXPORTS PRIVATE LIMITED. It helps that how my M.COM programme is more relevant to the needs of industry by studying how theoretical knowledge is practically applied in different departments. It helps to know how management or administration is closely related to industry.
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BOOKS REFFERED:
NAME OF THE BOOKS COSTING FOR MANAGEMENT COST ACCOUNTING COST MANAGEMENT COST ACCOUNTING
AUTHOR NAME
PUBLICATIONS
S.K. BHATTACHARYYA VIKAS PUBLISHING HOUSE AND JOHN DEADEN PRIVATE LIMITED S.P.JAIN AND K.L. NARANG KALYANI PUBLICATIONS C.SITARAMAN AND B.SARAVANA PRASATH COMPANY.PVT.LTD HIMALAYA PUBLISHING M.N. ARORA HOUSE
WEBSITES:
www.fibre to fashion.com www.ministry of textiles. gov.in www.accounting for management.com www.wikipedia.com www.ibef.org www.textile association india .com www.slideshare.net www.icwai.org www.icai.org www.websukat.com www.texmin.nic.in
OXFORD 116
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Swetha

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A STUDY ON COST MANAGEMENT PRIVATE LIMITED

INDUSTRIAL REVEIW INTRODUCTION

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

TEXTILE HISTORY IN INDIA:

The Textile and Apparel supply chain

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

GROWTH OF INDIAN TEXTILE INDUSTRY 2009-10

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

QUALITY IN LAKH BALES (170KG EACH)

SERICULTURE AND SILK SECTORS:

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

Catalytic Development Programme The Flagship Programme

PERCENTAGE INCREASE 4.516 20.70 19.4 (-)11.76 6.70

2.13 lakh hectares.

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

MAN-MADE FIBRES SECTOR:

The domestic fiber consumption ratio in India at present is 41:59 (FY09) in

TABLE 3 TABLE SHOWING THE

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

Rupees in lakhs. YEAR 2008-09 AND 2009-10

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

2008-09 Quantity Value

2009-10 Quantity Value

RAW JUTE JUTE PRODUCTS

89 202.99 291.99 -12.78%

82.9 112.8 195.7 51.40%

197.42 453.2 650.62 122.80 %

TOTAL 129.98 % CHANGE OVER LAST YEAR 43.36%

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

2.00 89.00 12.00

INTRODUCTION TO COST MANAGEMENT

Availability of large number of alternative choices:

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

SCOPE OF COST MANAGEMENT:

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

COSTING CONCEPTS: Costs:

A STUDY ON COST MANAGEMENT PRIVATE LIMITED .Cost accounting:

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

A STUDY ON COST MANAGEMENT PRIVATE LIMITED Ordering cost:

STOCK TURNOVER RATIO (FOR DAYS)

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

Objectives of material or inventory control are as follows: To ensure proper quality:

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

3. DIRECT OR CHARGEABLE EXPENSES:

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

SINGLE OR OUTPUT OR UNIT COSTING:

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

COST PER UNIT=TOTAL COSTNUMBER OF UNITS PRODUCED DURING THE YEAR

FIGURE 1.3 SHOWING THREE TYPES OF STOCK

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

FIGURE 1.4 SHOWING SYSTEMS OF COSTING

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

FIGURE 1.5SHOWING TECHNIQUES OF COSTING METHODS OF COSTING:

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

A STUDY ON COST MANAGEMENT PRIVATE LIMITED Hospitals etc.,

FIGURE 1.6 SHOWING METHODS OF COSTING COST CONCEPTS:

A STUDY ON COST MANAGEMENT PRIVATE LIMITED

A STUDY ON COST MANAGEMENT PRIVATE LIMITED