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Process of Manufacturing Sunflower Oil
Process of Manufacturing Sunflower Oil
MASTER IN COMMERCE
MCOM I (2012-2013)
SUBMITTED
BY
NITESH. R.CHAURASIYA
UNIVERSITY OF MUMBAI
MASTER OF COMMERCE
MCOM-I (2012-2013)
SUBMITTED BY
NITESH.R.CHAURASIYA
ROLL NO. 6211
DECLARATION
the
project
on
MANUFACTURING SUNFLOWER
PROCESS
OIL,
OF
under the
SIGNATURE OF STUDENT
(NITESH.R.CHAURASIYA)
ROL
L
6211
NO.
MULUND COLLEGE OF
COMMERCE
S.N. ROAD, MULUND WEST, MUMBAI 80
CERTIFICATE
This is to certify that Mr.Nitesh.R.Chaurasiya the student of
MASTER OF COMMERCE IN ACCOUNTANCY 1 st YEAR
(2012-2013) has successfully completed the project on
PROCESS OF MANUFACTURING SUNFLOWER OIL,
under the Guidance of PROF. M.S.GANAGI.
COURSE CO-ORDINATOR
PRINCIPAL
PROJECT GUIDE
EXTERNAL EXAMINER
Acknowledgement
Thanks giving seem to be the most pleasant of all
the jobs but it is difficult when one tries to put into words.
On the event of completion of my project on PROCESS
OF MANUFACTURING SUNFLOWER OIL, I take
the opportunity to express my deep sense of gratitude
towards all those people without whose guidance,
inspiration and timely help this project would have never
seen the light of the ray.
I
am
very
thankful
to
my
Guide
Prof.
Objective
To study the Process of Manufacturing Oil Industry.
To study How the Sunflower seeds is converting into
Edible Oil.
To study the problems faced by the Oil Industry.
DATA COLLECTION
PRIMARY DATA
RESEARCH
METHODOLOGY:
QUESTIONAIRE METHOD
COMMUNICATED WITH THE PERSON,
WHO IS DOING THIS JOB IN AN OIL
INDUSTRY.
SECONDARY DATA
THROUGH
BOOKS
AND
INTERNET.
CONTENTS
SR.NO
TITLE
PAGE NO
1
1.1
1.2
1.3
1.4
1.5
1.6
2
2.1
2.2
3
3.1
3.2
3.3
4
6
8
9
14
16
4.1
4.2 Manufacturing Process of Sunflower oil
4.3 Conversion Factors of Sunflower seeds into Oil
Conclusion
5
1
1
2
3
4
5
20
24
25
1.
1.1
MEANING
(1) Process: A Process means a distinct manufacturing
operation or stage. In Process Industries the raw
material goes through a number of processes in a
sequence before the finished product is finally
produced.
For eg.
Production of coconut oil involves the
following distinct processes.
30
31
36
1. Copra crushing
2. Refining and
3. Finishing.
(2) Process Costing: Process costing is a method of
costing used to find out the cost of the product in
each process.
(3) Process Cost: According to CAS-1, when the
production process is such that goods are produced
from a sequence of continuous or repetitive
operations or processes, the cost incurred during a
period is considered as process cost.
1.2
1.3
produced.
APPLICABILITY AND NECESSITY
Process costing is applicable to several mining,
manufacturing and public utility industries, e.g. mines
and quarries producing minerals and ores; industries
producing textiles, chemicals, soaps, paper, plastics,
alcohol, refined oil, electricity, gas and so on.
It becomes necessary to apply Process Costing to the
Industries belonging to any of the following categories:
(1) One Product, Many Processes: A factory may
produce a single item through a number of processes
1.5
1.6
2.
COSTING PROCEDURE
2.1
ACCOUNTING PROCEUDRE
2.2
SPECIMEN
PROCESS
ACCOUNT
The specimen of Process Account would appear as follows:
Dr.
Process A/c
Cr.
Particulars
Units
To Transfer from
Earlier Process
Rate
Rs.
Particulars
By Normal Loss
By Abnormal Loss
To Materials
To Wages
By Transfer to next
Process / Finished
Goods.
To Expenses
To Overheads
To Abnormal Gain
Total
Total
Units
Rate
Rs.
3.
3.1
MEANING
materials,
bad-supervision,
bad-planning,
poor
CAS-6
The provisions of CAS-6 (Material Cost) relating to scrap,
waste, etc. are as follows(1) Scrap: Scrap means discarded material having some value
in few cases and which is usually either disposed of
without further treatment ( other than reclamation and
handling) or reintroduced into production process in place
of raw material.
(2) Waste: Waste means material loss during production or
storage due to various factors such as evaporation,
chemical reaction, contamination, unrecoverable residue,
shrinkage, etc., and discarded material which may or may
not have value.
(3) Spoilage: Spoilage means production that does not meet
with dimensional or quality standards in such a way that it
cannot be rectified economically and is sold for a disposal
value. Net Spoilage is the difference between costs
accumulated up to the point of rejection and the salvage
value.
(4) Marketable Scrap: The production process may generate
marketable scrap or waste. Realized or realizable value of
scrap or waste shall be credited to the cost of production.
(5) Reprocessed Scrap: In case, scrap or waste does not have
ready market and it is used for reprocessing, the scrap or
waste values is taken at a rate of input cost depending upon
the stage at which such scrap or waste is recycled. The
expenses incurred for making the scrap suitable for
3.2
3.3
CALCULATIONS
What is to be calculated
Normal Loss
How is to be calculated
= input x % of Normal Loss
[Note]
[1]
2.
Normal Output
[2]
Normal Cost
Normal Output
[3]
3.
Unit Cost
Abnormal Loss
Or
Abnormal Gains
4.
[5]
5.
[6]
7.
[7]
(3) Find out Unit Cost: Under the Normal basis of Scrap
Accounting, the process account is not credited with the
sale value of Actual Loss. It is credited with the sale
value of the Normal Loss. The net cost is therefore =
Gross Cost Less Sale of Value of Normal Loss =
Normal Cost. This Net Cost is divided by the Net
Output to arrive at the Unit Cost. The Net Output is =
Input Less Normal Loss = Normal Output. Cost of
process means the total of the debit side of the Process
Account viz. Cost b/f From Earlier Process + Material +
Labour + Expenses + Overheads. Sale value of Normal
Loss means the sale value of normal scrap or defectives.
This is computed as follows: sale value of Normal
Loss = Sale Price x Quantity of Normal Loss. It should
be noted that this is the sale value of expected or
Normal Loss; the actual loss may be more or less. In
case of waste or weight loss the sale value of Normal
Loss would be Nil. The Sales Value of Normal Loss is
credited to the Process Account. Input in the above
formula indicates the total units handled in the process
viz. Units b/f from earlier process + Units of Raw
Material Consumed in the Process itself.
Normal Loss means the units derived by the formula
explained above viz. Input x % of Normal Loss. It
should be noted that the above formula gives the
normal, expected or standard loss; the actual loss may
(5) Find out Cost of Actual output: The unit cost worked
out in the above step no.3 is applied to the (1) quantity
of Actual Output, (2) quantity of Abnormal Loss or (3)
Pressing:
The heated meal is then fed continuously into a screw press,
which increases the pressure progressively as the meal passes
through a slotted barrel. Pressure generally increases from
68,950 to 206,850 kilopascals as the oil is squeezed out through
the slots in the barrel, and is recovered.
By-products/waste
The most obvious by-product of the oil-making process is oil
seed cake. Most kinds of seed cake are used to make animal
feed and low-grade fertilizer; others are simply disposed of.
Quality control
The seeds used to make oil are inspected and graded after
harvest, and the fat content of the incoming seeds is measured.
For the best oil, the seeds should not be stored at all, or for only
a very short time, since storage increases the chance of
deterioration due to mould, loss of nutrients and rancidity.
Quality of seeds very much depends on infrastructure (silos)
available for the proper storage conditions. The seeds should be
4.2
Clean Sunflower
Seed
(1,420 kg.)
Cooking
drying
Drying
9% moisture
(1,370 kg)
(Preprocessing)
Granulating
Flaking (2)
PRESSING
Meal
Grinding
Cooling
Pressure
Extracted
meal (640
kg)
SOLVENT
EXTRACTION
Oil
Clarification
Crude Oil
(350 kg)
Refined oil
(330 kg)
Meal
Crude Oil
(425 kg)
Coolin
g
Solvent
extracted
me
(560 kg)
CONCLUSION
Refined
Oil
(410
kg)
Shell
s
(100
kg)
for making any product, the raw material has to go from some
processes and after completing all the processes, the raw
material become the useable product. So the very first stage of
oil industry is cleaning the sunflower seeds in the Cleaning
Process then the output of cleaning process will transfer to the
next process called Grinding Process. In the Grinding process,
the sunflower seeds will grind totally and the output of the
Grinding Process will again transfer to the next process called
Pressing Process. In the Pressing process, the sunflower seeds
will hardly press and by pressing the sunflower seeds very
hardly, sunflower oil was produced and sunflower cake is also
produced and that sunflower cake is known as by-product and
that by-product will sell in the market at some cost and the
output of Pressing process will transfer to the next process
called Refining Process. In the Refining Process, the Sunflower
oil is refined and then again that refined oil will transfer to the
next process for packing. In the packing process, the refined oil
is packed and then it will transfer to the Godown for selling and
distributing the oil in the market. So, this is the process of oil
industry for converting the sunflower seeds into Refined Edible
oil.
5.
SIMPLE
PRATICAL
PROCESS
PROBLEM
OF
ON
OIL
MANUFACTURING COMPANY
Cost of Labour
Crushing Plant
Rs.
2,500
Refining Plant
Rs.
1,000
Finished
Rs.
1,500
Electric Power
600
360
240
Sundry Material
100
2,000
NIL
280
330
140
Steam
600
450
450
Factory Expenses
1,320
660
220
Cost of Casks
300 Tons of Crude Oil was produced. 250 Tons of Oil was
produced by Refining process.248 Tons of Refined Oil was
finished for delivery. Sunflower sack sold Rs. 400.
175 Tons of Sunflower seeds residue sold Rs. 11,000.Loss in
weight in Crushing 25 Tons.
45 Tons by-product was obtained from Refining Process
valued at Rs. 6,750.
You are required to show the accounts in respect of each of the
following stages of manufacture for the purpose of arriving at
7,500
the cost per ton of each process and also the total cost per ton of
finished oil.
Dr.
Cr.
Particulars
To Purchase
Raw Material
Tons
of 500
Rs.
2,00,000
Particulars
Tons
By Sale of 175
copra residue
Rate
62.86
Rs.
11,000
To Cost of Labour
2,500
By Loss
Weight
To Electric Power
600
To
Material
Sundry
100
To Repairs to
Machinery & Plant
280
To Steam
600
To
Factory
Expenses
1320
500
Rate
400
2,05,000
in 25
By Sunflower 300
Sack sold
By
Output
transferred to
Refining
Process
400
646.67
500
1,94,000
2,05,000
Dr.
Particulars
Tons
To Sunflower 300
Crushing
Process
A/c
transfer
To Cost
Labour
To
Power
of
Electric
Rate
Rs.
Particulars
Tons
646.67 1,94,000 By by-product 45
(sale)
1,000
360
To
Sundry
Material
2,000
To Repairs to
Machinery
&
Plant
330
To Steam
450
To
Factory
Expenses
660
By
Abnormal 5
Loss
By
Output
Transferred
to 250
Finished Process
A/c
Rate
150
Rs.
6,750
753.14 37,661
753.14 1,88,248
300
1,98,800
Dr.
300
1,98,000
Particulars
Tons
To Refining 250
Process A/c
To Cost
Labour
of
Rate
753.14
Rs.
1,88,284
Particulars
Tons
By Abnormal 2
Loss
1,500
By
Output
transfer
to 248
Finished Stock
A/c
To
Electric
Power
240
To Repairs to
Machinery &
Plant
140
Rate
763.34
Rs.
1,527
763.34
1,89,307
To Steam
450
To
Factory
Expenses
220
250
1,90,834
Dr.
250
1,90,834
Particulars
Tons
To Finished 248
Process A/c
Rate
763.34
To Cost of
Casks
Rs.
1,89,307
Particulars
By Balance
Tons
248
6.1
Rs.
1,96,807
7,500
1,96,807
Rate
793.58
RESEARCH
Data Collection
PRIMARY DATA
COMMUNICATED WITH THE PERSON,
WHO IS DOING JOB IN RUCHI SOYA
INDUSTRIES LTD.
1,96,807
SECONDARY DATA
THE SECONDARY DATA HAS BEEN
COLLECTED
THROUGH
BOOKS
AND
INTERNET.
6.2
Questionaire
1. Shall we get by-product in Oil industry?
YES
NO
2. Is the process of all Oil industries same?
YES
NO
3. Are
they
facing
manufacturing Oil?
YES
problems
at
the
time
of
NO
4. What is the use of Process Account?
methods
for
calculating
Equivalent
production are
(a) FIFO
(b) Average Cost
(c) Both (a) and (b)
(d) Neither (a) nor (b)
16. In process costing what are equivalent units?
(a) Production output expressed as expected
performance.
(b) Production of Homogenous product.
6.3
BIBLIOGRAPHY / WEBLIOGRAPHY
Through Internet:
http://www.ruchisoya.com/m_sunflower.htm
http://www.madehow.com/Volume-1/Cooking-Oil.html#b
http://www.fao.org/docrep/012/al375e/al375e.pdf
http://mu.ac.in/myweb_test/MCOM-Ac-%20Paper%20%20II.pdf
http://www.google.co.in/
Through Books:
Advanced Cost accounting book of TYB.COM
by
Ainapure
Advanced Cost accounting book of Mcom I
Ainapure
by