CHAPTER-1

INTRODUCTION
Cost control is the practice of managing and reducing business expenses. Cost
control starts by the business identifying what their cost are and evaluate whether those cost
are reasonable and affordable, thereafter if necessary, they can look for ways to cut costs
through methods such as cutting back, moving to a less expensive plan or changing services
providers. To be profitable companies must not only earn revenues , but also control costs. If
the costs are too high, profit margin will be low making it difficult for a company to succeed
against its competitors . Brumbaug (2008) was of the opinion that companies should watch
the cost and the profit will take of itself.
Cost control in an integral part of any business venture. No firm will stay in the business
if it does not employ prudent means of checking its costs by ensuring that they don’t over
surpass the estimated costs projections. If costs are not checked properly the outcome can be
negative to smooth running of the business. For cost control purpose a budget provides
standard cost.
Cost control is simply the prevention of waste within the exiting environment. This
environment is made-up of the agreed operating methods for which standards have
been developed. These standards may be expressed in a variety of ways, from broad
budget levels to detailed standard costs.

Cost control is the procedure whereby actual results are compared against standard so
that waste can be measured and where appropriate, action can be taken to correct the
activity. Cost control is the process of regulating the action so as to keep the elements
of cost within the set parameters. This process is exercised by setting the norms, targets
based on past actual. Cost control is the process of utilizing the available resources
economically.
Cost reduction is the improvement of the environment. This involves the examination
of the purposes for which costs are incurred and, by a variety of means. Eliminates or
reduces the reasons for spending. The existing standards are closely examined at the
broad and detailed levels with a view to important
Cost Accounting is a branch of accounting cost accounting came into existence due to
the limitation actions of financial accounting. Cost Accounting is a branch of
accounting and cost system collects direct and indirect cost. This cost accounting
provides information for financial accounting requirement as well as management
decision making for the effective running of business and thus in maximizing profit by
eliminating waste of material, efforts and facilities.

In the present industrial scenario increasing competition squeezes margins and

managements of business enterprises pay more attention to cost control and cost
reduction of preserving or improving profitability. Control and reduction of cost stay a,
cosmetics as long as company maintains smooth liquidity. Problems raise ugly heads
with ‘market quakes’ which begin strangling liquidity.

Page 1
Cost control and cost reduction is not special exercise carried out each time by
management noticed that the profit margin has fallen. It should not be a fit-fighting
exercise.

It is or should be, a routine activity carried out consistently throughout the whole
organization, looking at every activity at all levels. Such a service is based on
commitment to change that will ensure that the organization at least keeps pace with
technological developments and may even take the lead in producing new approach to
old problems.

Any cost control or cost reduction service must be based on a full knowledge of the
organization’s use of its resources. The profitability of a product can be improved by all
or any of the following ways.
 By improving function, cost remaining constant.
 By improving function as well as reducing cost.
 By reducing cost, function, remaining constant.

Cost control and cost reduction is an approach rather than a technique. It depends very
much on individual talent coupled with a complete understanding of the business
process from design to delivery. It is achieved only through a process of appraisal of
all aspects of using resources, carried out on a continuous basis from the movement the
product is conceived to the movement customer users it.

OBJECTIVES OF THE STUDY.

 To study the cost control and cost reduction policy adopted at Tri-wall pak
Ltd.
 To study and understand the costing policies and various systems of costing.
 To reducing inefficiencies and wastages
 To setting up predetermined costs.
 To improvement of the effective utilisation of resource.
 To improve the rate of return on investment.
 To give suggestions for the finding of the study.

SCOPE OF THE STUDY.

 The area of study is limited to the functions in TRI-WALL pak Limited.
 This study is limited to the organization.
 The study will however the perceptions of customers and suppliers.
 To study the cost control and cost reduction procedure in the company.

Page 2
LIMITATIONS OF THE STUDY.
 The study is conducted only in TRI-WALL.
 The time provided for the study is very limited i.e, .45 days.
 Due to shortage of time only important information has been collected.
 The data collected is only basis for providing necessary suggestions.
 Finding of the study may change with the change in time.
 Complete information was not available doe to confidentiality

Chapter-2
Review of literature
In the study made by Mikhail Chester and Chris Hendrickson (2005), they have
concluded that “construction cost goes up in a project with the seven different
mismanagement scenarios, such as (i) delay (ii) Cost cutting (iii) resequencing of work
(iv) acceleration (v) change of scope (rework) (vi) defective work (vii) strike”.

According to Gregory L. Magee (1996), “proper financial management requires a reporting

system by a Project Manager that supplies both cash and accrual methods of accounting.
Project accounting system and Cost accounting technique are also important for Cost Control”.

According to John G. Everett and Peter B. Frank (1996) construction is not a safe industry. One
of the areas in which the cost can be reduced and productivity increased is the area of safety.
The Business Roundtable (BR) 1979 determined the true costs of accidents and injuries in
construction industry. The cost of workers compensation insurance have skyrocketed and there
has been a rash of third-party lawsuits as a result of accidents on construction sites.

Navon (1996) observed that “a well developed cash flow management system will manage the
cash flow of the company as a whole, and it is flexible and accepting projects with varying
degrees of detailing levels, it requires no human involvement in cash flow generation, it is
accurate, and it is a typical management tool”.

According to Shamil G. Naoum (1994), “ten factors identified to measure project performance
are (i) Preconstruction time (ii) Construction time (iii) total time (iv) Speed of Construction (v)
unit cost of building (vi) time overrun (vii) Cost overrun (viii) time (ix) Cost and (x) quality”.

Michael Bommer, Rence DeLaPorte and James Higgins (2002) say that “the skunk works
project management teams was able to deliver the projects on time and particularly within
budget by (i) adhering to clear focus on their mission (ii) including extensive up front planning
efforts (iii) critically analyzing customer needs (iv) leveraging project overlaps (v) involving
suppliers early (vi) empowering the team and (vii) breaking rules”.

According to Damodara U. Kini (2000), “the Construction Company will have to be very good
in the basic project Management processes in planning, designing, scheduling, Controlling

Page 3
costs, and managing materials and construction. However the following six areas are crucial for
the complete success of a project. (i) The company will need an organization that can match
their expertise in a cost-effective manner to the needs of their global customers. (ii) They will
need an information technology system that will permit fast, reliable transfer of data to any
point of the world. (iii) The staffs of these companies will have to be able to think globally and
to deligate design functions to engineers at distant locations. (iv) They will have to make
effective use of suppliers anywhere is the world to benefit from lower manufacturing costs and
proximity to a given construction site. (v) They will need to develop the knowledge to use local
materials and construction techniques in such a way as to minimize costs and take full
advantage of local existing facility. (vi) They will have to ensure that the required quality is
achieved in the end product they deliver regardless of its location”.
Chapter-3
COMPANY PROFILE
For over 60 years now, Tri Wall has been synonymous with heavy-duty, high
performance packing for the automotive aerospace, military and many other medium
and heavy industry sectors worldwide.

The Tri wall Pak Pvt ltd was founded in the year 2016 this are notable firm that is
instrumental in manufacturing and supplying a highly durable array of corrugated pop
display wooden pallet, packaging boxes, packing material, etc. it is the Pvt ltd company
that is situated at Greater Noida (utter Pradesh, India).this company are developed a
well structural and spacious infrastructural unit that help us in making qualitative range
of packing product as per the global set standards.

This units comprises of sub- department like quality testing procurement,

administration, sales, R&D, marketing, transportation, logistic, warehousing,
manufacturing, packing, etc. Managed under the direction of our dedicated team
member these departments are well we are able to deliver these products in several
parts of the country

The Tri-Wall Group is composed of a group holding company, three intermediate

holding companies, and operational companies within each of the intermediate holding
companies.

History
The name “Tri-Wall” came into existence in the early 1950’swhen Abe Goldstein, a
small box maker in New Jersey, USA, invested the manufacturing process for a new
heavy-duty corrugated material he dubbed “Tri-Wall Pak@”.

When tri wall came into Asia in 1974 and first TRI-WALL LIMITED and the
company’s corporate headquarter is in Hong Kong with subsidiary holding companies
for Japan, Southeast Asia, China and Europe(2012) and India (2001). Key functions
include corporate planning, group financing, IT, and public/investor relations

Page 4
“One World, One Tri-Wall”
As a replacement for wood and other outmoded materials that had dominated transport
packaging up until that time, Tri-Wall Pak @'s many advantages were quickly
recognized. Within a decade of its introduction into the US marketplace, Tri-Wall
Pak® could be found in virtually every area of industrial and agricultural transport
packaging.

The great success of Tri-Wall Pak in the US led the company to extend its reach
worldwide through a series of local partnerships. Beginning with the UK in the late
1960's, Tri-Wall came to Asia in 1974 when the company established a partnership
with one of Japan's largest paper companies. Over the next thirty-years the tremendous
success of TRI-WALL K.K. in Japan led the company to expand into the neigh boring
regions of Korea, Taiwan, SE Asia, and China. This was the beginning of what we now
call the "TRI-WALL GROUP".

In 2010, Tri-Wall's corporate headquarters was shifted from Tokyo to Hong Kong, a
natural move reflecting the Group's increasingly International corporate profile, and
China’s central importance to the Group's long-term vision and growth. From Hong
Kong, TRI-WALL LIMITED oversees the Tri-Wall Group subsidiary holding
companies for Japan, Southeast Asia, and China. Key functions include corporate
planning, group financing, IT, and public/investor relations.

Today, the Tri-Wall Group is still evolving. Our Asian network continues to expand,
even as we increase our global awareness and broaden our corporate goals. We are
carrying the Tri-Wall name into non-packaging related areas; creating new products
and services using the same world-class standards for innovation, quality, and
customer-driven performance that Tri-Wall established over half-a-century ago.

"One World, One Tri-Wall" – wherever our customers are, we provide products and
services that set the standard for quality reliability and excellence.

Group holding company of tri wall limited

Page 5
Tri-Wall’s Mission and Vision

Dedicated to making the Tri-Wall name

synonymous

With Integrity, Quality, and Innovation,

we strive to

Offer a unique combination of

integrated

Packaging solutions and

services unmatched by any other company to be the Only One”.

Yuji Suzuki, chairman and

Founder of Tri-Wall

A track record of winning awards

At Tri-Wall, we pride ourselves on developing innovative corrugated packaging that
exceeds our clients’ expectations. It’s therefore not surprising that some of our designs
have been recognised by the packaging industry.

Over the years, we have won numerous awards for our revolutionary developments in
packaging. In fact, we’ve picked up no less than 52 prestigious Star pack Awards and
30

WordStar Awards. This is quite an achievement, as these are known as the ‘Oscars’ of
the packaging world.

The objective of the Star pack Award Scheme is to promote the best practice in
packaging design, in particular:

•Innovation in design, construction, manufacturing and materials technology

Page 6
•Good environmental credentials relating to material usage, manufacturing and re-use,
recycling or recovery

•Helping the consumer with more functional packaging and less product waste

Extensive manufacturing facilities

At Tri-Wall Europe, we have a large manufacturing plant in Monmouth in the UK and

we also work with approved fabricators, or box manufacturers, right across Europe that
use our fibreboard.

This means we will produce the packaging either at our own plants or wherever we feel
is best for your specific requirements. We can also manufacture in Asia, if that is the
best option for you.

To give you more of an insight into our extensive manufacturing facilities, our
Monmouth site is 21,500 square metres in size, employs 132 people and:

•Is an integrated plant for creating products from paper through to the finished
corrugated packaging

•Manufactures heavy-duty corrugated sheet and bespoke packaging solutions

•Manufactures triple-wall corrugated sheet board in multiple configurations. We are the

only AAA manufacturer in the UK and also produce other configurations including
CAA, CAC and CBC

•Manufactures other standard corrugated configurations including AA, CA, BA, BC, A
and C

•Collaborates with Europe's fabricators to ensure the best packaging conversion

processes

•Coordinates globally with our Tri-Wall corrugating network to ensure consistency of

product manufacture is maintained around the world

Our Infrastructure
With the support of our spacious and well functional infrastructural base, we have been
able to accomplish the huge and urgent consignments of our prestigious customers
within limited time period. Covers a large area, this infrastructural unit is categorized
into sub-divisions like quality testing, marketing, R&D, transportation, admin, logistic,
quality testing, procurement, warehousing, sales, manufacturing, packaging, etc. Our
manufacturing unit is outfitted with the latest machines and equipments that enable our
staff members in the making the packaging products in diverse specifications.

Page 7
Business Capability
• Global Reach – Local Service Global Design and Project teams work with local
fabricators to tailor composite solutions to customer packaging needs

• High performance papers Ultimate strength and durability but with full recyclability
• Technical Support UN approved Laboratory and UKAS & ISTA testing facilities

•Service and Innovation Supply Chain Solutions not just packaging.

Tri-Wall - Selling Innovation

Tri-Wall was invented and patented in the USA over fifty years ago by two brothers,
one an engineering genius, the other a marketing wizard. Together they created not only
the material - known throughout the world today as "Tri-Wall" - but also the intensely
customer-service driven Tri-Wall Fabricator Network system. This system of creating a
Fabricator Network in every country in which it operates, is what continues to
differentiate Tri-Wall from all other packaging companies.

From the late 1960's Tri-Wall began to expand its operational outside of the US, first in
the UK, followed in quick succession by Europe, Israel, Australia, and finally Asia,
starting with Japan. Along the way, Tri-Wall has led the packaging industry in the
development of premium quality materials and handling systems that reduce costs and
rationalize customer’s entire material handling flow. By adopting Tri-Wall solutions for
their transport packaging, customers benefit from significant cost reductions throughout
their material handling chain (time, labour, shipping, and insurance, to name just a few)
while at the same time improving packaging performance, reducing damage, and
reducing environmental impact. Tri-Wall Pak containers are custom designed and
tailored to the customers’ individual products and needs, and are used to ship a vast
array of automotive, electronic, chemical, and agricultural products.

Tri-Wall packaging consistently outperforms government regulatory standards for

transport packaging, and is used extensively in military transport and logistics
operational throughout the world. The secret behind Tri-Wall’s amazing growth into a
product with worldwide brand-name recognition and trust can be summed up in one
key concept: although we manufacture and sell one of the strongest packaging materials
in the world, our real product is Innovation.

Today Tri-Wall is
More than 70 locations HKD 1.5+ Billion in 1,900+ employees

In 20+countries Sales Revenue 2014

Page 8
Head office of Tri-Wall Limited

Packaging on a Global Scale

One of the biggest advantages of using Tri-Wall for all of your packaging is that
we are a truly global company.

Page 9
In fact, we are the only company to have globally connected teams providing complete
corrugated packaging systems that save time and manpower, reduce costs, improve
efficiency and support sustainability throughout your product's supply chain.

We produce heavy duty packaging for big industrial products or small, fragile ones for
delivery on a global scale – locally, nationally and internationally.

Services
You might think that a bespoke packaging solution created specifically for your
business would be unnecessarily expensive. Far from it. Tri-Wall packaging can
actually save your business money right through the process, from inventory all the
way to disposal. There are many more advantages to using Tri-wall packaging too.
Here you’ll discover how we work on a truly global scale, our innovative research and
development and the stringent product testing we carry out. You’ll also gain an insight
into our extensive manufacturing facilities and worldwide network of fabricators.

Global Fabricators Network

Tri-Wall has established a global network of fabricators to support our

manufacturing plants across the world.

Each fabricator is checked and approved, so that we know they will manufacture to the
same exacting standards as we do.

The benefit for you, the customer, is that we supply high quality fibreboard to
fabricators and can across the world manufacture

Wherever most is appropriate for your product and market either at one of our own
facilities or through one of our approved fabricators.

Extensive Corrugating manufacturing the integrated plants for corrugated

packaging creating products from paper through to the finished

•Manufactures heavy-duty corrugated sheet board and packaging solutions in multiple

configurations in the UK, China and Thailand

•Triple-wall corrugated configurations

•Standard corrugated configurations

•Collaborates with the fabricators to ensure the best packaging conversion processes

Page 10
Testing Process
Tri-Wall in-house UN approved laboratories, with UKAS approved facilities in the UK
and ISTA in China

•Board Analysis: Analysis of corrugated material, grammage check of complete board

and individual liners and fluting.

•Burst: Determines the pressure required to burst paper, liner

And board. For reference see British Standard BS3137

•Cobb Test: Measures the water absorption of liner/paper

For reference see British Standard BS2644

•Compression: Determines the compressive failure point of a corrugated package.

Applies loads up to a maximum of 20,000 kg. Maximum size limits are 1980 x 1360 x
1800mm or 2420 x 800 x 1800mm. For reference see British Standard BS1133.

•Conditioned Environment: The laboratory is maintained at 23°C, 50% relative

humidity.

•Drop Testing: As per customer requirements up to 1000 Kg.

•Flat Crush: Determines the amount of force required to compress a single corrugated
flute. For reference see British Standard BS4686.

•Friction Test: Determines the coefficient of static friction. For reference see Tappi
test method T815.

•Gel Point: Determines the gel point of starch adhesive.

•Mechanical Vibration: A table capable of operating with synchronous motion –

rotary or linear. Table dimensions: 1365 x 1525 mm.

Page 11
•Moisture Content: Determines the moisture content of liner/paper and corrugated
board. For reference see British Standard BS3433.

•Ring Crush: Determines the edgewise-compressive strength paper. For reference see
SCAN test method P-34-71.

•Puncture: Determines the energy required to puncture corrugated material. For

reference see British Standard BS4816.

•Whiteness: determines the whiteness or tint of white liner/paper.

•Humidity Cabinet: Allows samples to be conditioned

•In a specific atmospheric environment prior to testing. Maximum sample size 350 x
200 x 340 mm.

Think outside the box

Our designers like to think outside of the box and come up with radical new ideas that
help with your packaging storage, assembly, safe, efficient working line-side, logistics
and disposal. In fact, you’ll soon come to see our design team as part of your own and
work seamlessly together.

Or why not come in on one of our 'hot seat days' and get involved in the product
testing – many of our clients do. It's a great opportunity to work through any issues,
whilst we modify the design as required.

It all means that bespoke packaging doesn't mean expensive packaging. Tri-Wall
actually saves your business money right through the process, from inventory all the
way to disposal

For the last 8 years, planted over 400,000 trees

• Our plan /goal is “One Million Trees” to create a Tri-Wall forest

• Over 20 years, one (1) tree can absorb about 18kg of CO2. Can contribute to reduce
18,000 tons of CO2 when we realize the “One Million Trees“through this program

Boxes of any size can be made with Tri wall, Tri-Wall Gives design solution for safe
transportation and it can reusable packing

Page 12
 Branches of tri wall in world wide
1) Singapore 7) Europe 13) Korea

2) Vietnam 8) USA 14) Malaysia

3) Australia 9) Hong-Kong 15) Indonesia

4) Philippines 10) china

5) India 11) Japan

6) Israel 12) Thailand

Page 13
Tri-Wall is replacement for all kinds of wooden pack

Tri-Wall packing is water resistance.

Tri-Wall packing used by US Army.

Page 14
KEY CUSTOMERS

Compression of tri-wall box with wooden box Carbon Foot Print.

Slink Rubber wood box with rubber wood pallet Tri-Wall box with
rubber wood pallet
Sl.No Rubber wood box Tri-Wall
with rubber wood box with
pallet rubber
wood pallet

1 Rubber wood in 6.35 1.94

( Cft.)
2 Rubber wood in 158.75 48.5
(Kg.)
3 Tri-Wall (Sq. 0 8.1
Mt.)
4 Co2 Emitted due 269.875 109.99
to Incineration
(Kg).
Rubber wood box Tri-Wall
with rubber wood box with
pallet rubber
wood pallet

Page 15
 Net weight of 160 64.7
packing box.
1 Number of 8 8
boxes per truck.
2 Gross weight of 1280 517.6
packing box.
3 Total Km. 2000 2000
transported.
4 Co2 emitted by 524.8 212.216
the truck. ( Kg)
5 Co2 emitted by 43.03 17.40
the truck for
transporting 1
box ( Kg)

6 Total Carbon 312.91 127.39

dioxide emitted
per box (Kg.)

SWOT ANALYSIS OF THE COMPANY

SWOT analysis refers to the strength, weakness, opportunity and threat of the
organization.

SWOT is a compound of two factors namely external factors and internal factors.
Strength and weakness are the internal factor which can be controlled

Environmental Scan

Internal Analysis External Analysis

Strength Weakness Opportunities Threats

Page 16 SWOT Matrix

by the technical and personnel departments. Opportunity and threat are the external
factors which cannot be controlled by the company. External factors may include
political factors, socio-cultural factors, technical factors, demography, environmental
factors etc

Strengths

 Skilled staff and hard working people

 Less cost of production with quality product
 Effective utilization of resources
 There is no government issues are arising along with no sticks, lack out of
company
 The company is going to get the good financial support from the management

Weakness

 The other weakness in the inadequate flow of information among different

departments
 The issues may arising from the environmental department
 Competition for the packing activity for company form the many competitors
 There is no proper media for advertising for the product

Opportunities

 The company wants reduce its cost of production

 To expand its branches in the India as well as in the world wide
 To achieve the market leadership by through producing the high quality of of
product with less cost

Threats

 The external Environmental issues are going to arising in the company

 The competition from the world wide competitors

Page 17
 CHAPTER-4
Theoretical back ground of the study
Cost Accounting is a branch of accounting cost accounting came into existence due to
the limitation actions of financial accounting. Cost Accounting is a branch of
accounting and cost system collects direct and indirect cost. This cost accounting
provides information for financial accounting requirement as well as management
decision making for the effective running of business and thus in maximizing profit by
eliminating waste of material, efforts and facilities.

DEFINITION

According to Weldon, Cost Accounting is “The classifying, recording, and appropriate

allocation of expenditure for the determination of costs of the products or services, and
management”.

Meaning of cost:

It refers to the cost amount of expenditure incurred on a product and or service.

Elements of cost

The elements of cost are three 1) material 2) labour, 3) expenses. The elements of cost
further are divided into different element.

Direct material: Direct material is that material which can be identified in the product
and can be conveniently measured and directly charged to the product.

Direct labour: Direct labour is all labour expended in altering the construction,
composition, confirmation or condition of the product.
Direct expenses: All expenses which can be treated as direct Labour if they are directly
engaged on specific product or process and the hours they spend on directly measured
without much of an effort.
Indirect materials: It has been defined as “materials which cannot be allocated but
which can be apportioned to or absorbed by cost centers or cost units”.
Indirect Labour: The wages of that Labour which cannot be allocated which can be
apportioned to or absorbed by cost centers or cost units in known as indirect Labour.

Page 18
Indirect expenses: which cannot be allocated but can be apportioned to or absorbed by
cost centers or cost units as rent, rates, insurance, municipal taxes, general manager’s
salary, cost of training new employees, lighting and heating, telephone expenses

Components of Total Cost:

TOTAL COST

Material Cost Labour Cost Expenses

Direct Indirect Direct Indirect Direct

Material Material Labour Expenses
Labour

Prime Cost Overhead

Production Administratio Selling

overhead n overhead Distrib
n overh

DEFINITION OF COSTING:
I.C.M.S., London, has defined costing as “the technique and process of
ascertaining costs”.

Method of costing

It primarily depends on the manufacturing process and also on the methods of

measuring the departmental and finished products. The main costing methods are as
follows.
 Job costing

Page 19
  Contract costing
 Batch costing
 Process costing
 Operating costing
 Farm costing
 Multiple costing

Job costing: Under this method, costs are collected and accumulated for each job, work
order or project separately. Each job can be separately identified; so it becomes
essential to analyze the cost accounting to each item. A job card is prepared for each
job for cost accumulation. This method is applicable to printers, machine tool
manufacturers, foundries and general engineering workshops.

Contract costing: When the job is big and spread over long periods of time, the
method of contract costing is used. A separate account is kept for each individual
contract. This method is used by builders, civil engineering contractors, constructional
and mechanical engineering firms etc.

Batch costing: This is an expansion of job costing. A batch may represent a number of
small orders passed through the factory in batch. Each batch is treated as a unit of cost
and separately coasted. The cost per unit is determined by dividing the cost of the batch
by the number of units produced in a batch. This method is mainly applied in biscuits
manufacture, garments manufacture and spare parts and components manufacture.

Process costing: This is suitable for industries where production is continuous,

manufacturing is carried on by distinct and well defined processes, the finished product
of one process becomes the raw material of the subsequent process, different products
with or without by products are produced simultaneously at the same process and
products produced during a particular process are exactly identical. Process costing is
generally followed in textile industries, chemical industries, tanneries, paper
manufacture etc.
COST CONTROL AND COST REDUCTION
In the present industrial scenario increasing competition squeezes margins and
managements of business enterprises pay more attention to cost control and cost
reduction of preserving or improving profitability. Control and reduction of cost stay a,
cosmetics as long as company maintains smooth liquidity. Problems raise ugly heads
with ‘market quakes’ which begin strangling liquidity.
Cost control and cost reduction is not special exercise carried out each time
management noticed that the profit margin has fallen. It should not be a fit-fighting
exercise.
It is or should be, a routine activity carried out consistently throughout the whole
organization, looking at every activity at all levels. Such a service is based on
commitment to change that will ensure that the organization at least keeps pace with

Page 20
technological developments and may even take the lead in producing new approach to
old problems.

Any cost control or cost reduction service must be based on a full

knowledge of the organization’s use of its resources. The profitability of a
product can be improved by all or any of the following ways.
 By improving function, cost remaining constant.
 By improving function as well as reducing cost.
 By reducing cost, function, remaining constant.

Cost control and cost reduction is an approach rather than a technique. It

depends very much on individual talent coupled with a complete
understanding of the business process from design to delivery. It is achieved
only through a process of appraisal of all aspects of using resources, carried
out on a continuous basis from the movement the product is conceived to the
movement customer users it.

IMPORTANCE OF COST CONTROL AND COST REDUCTION

The advantages of exercising cost control and cost reduction are as
follows.
 Better utilization of resources.
 To proper for meeting a future competitive position.
 Reasonable price for the customers.
 Firm standing in domestic and export markets.
 Improved methods of production and use of latest manufacturing techniques
which have the effect of rising productivity and minimizing cost.
 By a continuous search for improvement creates proper climate for the
increase efficiency.
 Improves the image of company for long-term benefits.
 Improve the rate of return on investment.

COST CONTROL
MEANING
Cost control is simply the prevention of waste within the exiting
environment. This environment is made-up of the agreed operating methods
for which standards have been developed. These standards may be expressed
in a variety of ways, from broad budget levels to detailed standard costs.

Cost control is the procedure whereby actual results are compared against
standard so that waste can be measured and where appropriate, action can be
taken to correct the activity. Cost control is the process of regulating the action
so as to keep the elements of cost within the set parameters. This process is

Page 21
 exercised by setting the norms, targets based on past actual. Cost control is the
process of utilizing the available resources economically.

DEFINITION
The Chartered Institute of Management Accountants, London defines
cost control as “the regulation by executive action of the cost of operating an
undertaking particularly where such action is guided by cost accounting”.

ELEMENTS OF COST CONTROL

 Set down a norm or standard or targets.
 Select a yardstick for measuring the standard or target.
 Ascertain the actual performance by applying the yardstick which was used for
measuring the standard or target.
 Compare the actual performance with the standard or target and compute the
variances.
 Analyze the variances by cause and fix responsibility for variances.
 Periodically review the standards or targets and revise them in the light of
changed circumstances.

COST CONTROL TECHNIQUES

 Material control
 Labour control
 Overhead control
 Budgetary control
 Standard costing
 Control of capital expenditure
 Productivity and accounting ratios.

COST REDUCTION:
MEANING
Cost reduction is the improvement of the environment. This involves
the examination of the purposes for which costs are incurred and, by a variety
of means. Eliminates or reduces the reasons for spending. The existing
standards are closely examined at the broad and detailed levels with a view to
important.
Cost reduction is the process of seeking ways to achieve a given result
through improved design, better methods, new layouts, incentive schemes,
establishing of new standards etc. cost reduction is a coordinated set of
contingent actions to achieve the dual objective of reducing overall costs
without corresponding loss of efficiency.

Page 22
 DEFINITION
The Chartered Institute of Management Accountants, London defines
cost reduction as follows.
“Cost reduction is to be understood as the achievement of real and permanent
reduction in the unit cost of goods manufactured or services rendered without
impairing their suitability for the use intended or diminution into the quality of
the product.

TOOLS AND TECHNIQUES OF COST REDUCTION

The various tools and techniques used for achieving cost reduction are
practically the same which have been suggested for cost control. Some of these
are
 Budgetary control
 Standard costing
 Standardization of product and tools and equipments
 Simplification and variety reduction
 Improvement in design
 Material control
 Labour control
 Overhead control
 Product planning and control
 Automation
 Operation research
 Market research
 Planning and control of finance
 Value analysis
 Quality measurement and research
 Cost benefit analysis
 Contribution analysis
 PERT
 Job evolution and merit rating

Page 23
 Chapter-5
ANALYSIS AND INTERPRETATION

DATA COLLECTION.

A set of numerical figures usually obtained by measurement or counting. Data

collection is an important phase for conducting a research data easy collected mainly
from two sources.

Primary sources: primary data means first hand that is see data which are collected at
first and here by researcher or by someone especially for purpose of study.
Secondary data: it refers to information grabbing from already existing sources.
Secondary data has some advantages
 It is more economical
 It save time
 With the help of secondary data research errror can make his primary data
collection most specific and more relevant.
Disadvantage
Secondary data may be same as it required for research project.
It is out of data
Secondary data will be always accurate.

Method of data collection

All the required data for analysis is collected from both the primary and secondary
sources.
Primary data: The primary objective of the study is to co-relate the cost, volume,
profit and sales of TRI-WALL.
Secondary source: The secondary data has been collected from costing manual. Books
on cost accounting and annual reports of the company.
 To find out the volume and sales.
 To find out cost of production.
 To know the relation between cost, profit and sales.

Page 24
 ANALYSIS OF DATA.
The working of existing costing system was clearly observed and
additional data was collected. These data are collected through interviews and
observations. Data collected was analyzed and interpreted. Process flow
charts, diagrams and illustrations were used for analysis and interpretation.

Analysis

Analysis refers to the proper arrangement of data where in total figures

in the financial statements are regrouped distinct of the different parts.

INTERPRETATION:

It refers to the composition of various components of definite

conclusions may be drawn about the earning capacity, efficiency, profitability,
therefore is very much essential for meaningful interpretation.

Costs are allocated work order wise/process center wise as in job costing. In
each production

Cost center, cost of manufacture per unit of production is determined. The unit
is either kg or an output man-hour form those unit cost of production, the cost
of a product at various stages of manufacture are found out and after making
necessary corrections for in –process rejection, the total cost of a product up to
added to the factory cost to arrive at the total product cost.

The financial books of accounts contain information relating to element

wise expenditure. (E.g., direct material, direct labour, deprecation etc.)
Element wise expenditure is allocated to production cost canters.

Page 25
Table-1

Shows the value of material cost to Total cost

Month Material Total %of material

cost cost cost to total
cost
1stmonth(starts from 1965700 3792350 51.83%
August 2016)
2ndmonth(starts from 2469840 4836470 51.07%
September2016)
3rdmonth(starts from 2247800 4518720 49.74%
October2016)
4th month(starts from 2235600 4412470 50.67%
November 2016)
5th month(starts from 2745600 4349370 63.13%
December 2016)
In a given table to analysis material cost on total cost. The material cost is high
in 51.83% in 1st month, in the 2nd month on words material cost decreased 50.07%, in
3rd month 49.74%, in the 4th month cost is increased 50.67% and in the 5th month cost is
increased due to the material cost is increased.

Graph: 1

Graph showing value of material cost to total cost

70.00% This
60.00% are
50.00% the
40.00%
30.00% 63.13%
51.83% 51.07% 49.74% 50.67%
20.00%
10.00%
0.00%
August sepember October November December

Column1

materials which identified with the product, the cost of material change on the base of
supplier sells his goods to the company. When change in the material purchase leads to

Page 26
changes of total cost. When bulk purchase of material helps to the decrease of cost in
material Purchase. In the 5th month the company increase purchase up to 63.13%.

TABLE-2: Show the value of labour cost to Total cost

Months Direct Total %of direct

Labour cost Labour cost
to total cost
1st month(starts from August 389000 3792350 10.26%
2016)
2nd month(starts from 401800 4836470 8.31%
September2016)
3rd month(starts from 320560 4540270 7.06%
October 2016)
4th month(starts from 375200 4456070 8.42%
November 2016)
5th month(starts from 307100 4381070 7.01%
December 2016)
The labour cost increased on the employees who engaged directly in making the
product. The labour cost is goes on decreases when production is rising, in 1st month the
cost is high, in 2nd month it decrease to8.31%when compared to 1 st month in 3rd month
also it decrease to 7.06%but in 4 th month it raised to8.42% later in next month it come
down to7.01% due to material consumption is increased in the 5th month.

Graph -2: Showing the value of labour cost to Total cost

20.00%
18.00%
16.00%
14.00%
12.00%
10.00%
8.00% Column1
6.00%
4.00%
2.00%
0.00%
August
september
October
November
December

Labour work can be identified clearly in the process of converting the

row materials in to finished product direct labour plays a key role in the cost
production. Hence it is necessarily to know the contribution of direct labour in
the cost production. When the company purchases high material and produced
more product leads to decrease of direct labour cost The changes taken please
due to the company install the technology along with recruiting skilled
people .and also the company implementing cost reduction strategy.

Page 27
TABLE-3: SHOWING THE VALUE FACTORY OVERHEAD TO TOTAL
COST

MONTHS Factory Total %of factory

overhead cost overhead to
total cost
1st month(starts from 549300 3792350 14.48%
August 2016)
2nd month(starts from 648900 4836470 13.42%
September2016)
3rd month(starts from 587400 4540270 12.94%
October 2016)
4th month(starts from 601350 4456070 13.50%
November 2016)
5th month(starts from 586300 4381070 13.38%
December 2016)
In the above table gives information that Factory overhead is compared to Total
cost the factory expenses of last five month. In the 1st month the factory expenses are
very high it is14.48%, In next two month the cost is decreased in 2nd month13.42%, in
the 3rd month the overall the high cost is reduced is 12.94%, in the month of 4th it
increase to 13.50%and in finally in the month of 5th it came to down is13.38% it shows
the good performance of company when it is compeered total cost.

Graph: 3 SHOWING FACTORY OVERHEAD TO TOTAL COST

14.48%
Column1
13.42% 13.50% 13.38%
12.94%

August September October November december

Factory over head are the indirect cost which cannot be allocated to any specific job.
These are the expenses which are incurred at the time of production directly. There
include power and fuel, water, indirect material, labour etc, these are key items without
which manufacturing process cannot be taken place In the 1st month the factory
overhead is 14.48%, in the 2nd month it reduces to13.42%, and the company adopt is
manufacturing more product leads to reduce of cost factory in the 3 rd month is
12.94%.inthe 4th month it increases due to less material consumed Hence as production
increases factory overheads will remain constant to some extent, so it is better to
produce at such level where cost will not.

Page 28
TABLE-4 ADMINISTRATION OVERHEAD TO TOTAL COST

months Administrat Total cost %

ion Administration
overhead overhead to
total cost
1st month(starts from 868900 3792350 22.92%
August 2016)
2nd month(starts from 834600 4836470 17.26%
September2016)
3rd month(starts from 860100 4540270 18.94%
October 2016)
4th month(starts from 899750 4456070 20.19%
November 2016)
5th month(starts from 835500 4381070 19.07%
December 2016)
This Table shows administration overhead cost in last five month and it is compeered
to the total cost for to know the administration expenses on total cost in the 1 st month 22.92%
the expenses is very high in 2nd month it is 17.26%was reduced and in the 3rd month it
increase to 18.94%, in the month of 4thmonth it analysis to the total cost it will again increase
later in the month it may constant only the little changes are taken place it is 19.07%. On the
total cost.

GRAPH: 4: SHOWING ADMINISTRATION overhead to total cost

25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
August
september
October
November
December

Column1

The graph shows the changes of in the cost of administration. A good management with
decision making ability only can take the company into long run, survive and complete in two
days competitive world. So the administration overhead cannot be ignored in sales of the
company. The changes is taken please due to the company recruit the skilled staff and the
management is taken some safety measures to word labour and staff due to this the cost of an
administrative expenses are going to varies and also the company taken some training
programs to words staff and labours.

Page 29
TABLE –5: SELLING AND DISTRIBUTION OVERHEAD TO TOTAL COST

MONTHS Selling and Total %selling

distributio cost and
n overhead distribution
overhead to
total cost
1st month(starts from 133700 3792350 3.53%
August 2016)
2nd month(starts from 156000 4836470 3.23%
September2016)
3rd month(starts from 178450 4540270 3.93%
October 2016)
4th month(starts from 156400 4456070 3.51%
November 2016)
5th month(starts from 168300 4381070 3.84%
December 2016)
In the above table the selling and distribution overhead is measured on total
cost. In 1st month the selling cost is 3.53%, in 2nd month it decreases 3.23% due to less
production, in 3rd month onwards the selling expenses increases in this month the cost is
3.93%, in 4th month 3.51% and in 5th month selling cost is increase again 3.84%, it
calculated on total cost.

Graph -5 Showing the value of selling and distribution overhead to Total cost
3.93% 3.84%
4.00% 3.53% 3.51%
3.23%
3.50%
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
August september october november december

Column1

the above graph indicate that the selling activate is the main a function of the
management that takes the decision on its distribution function the selling and
distribution expenses include the packing delivery expenses warehouse etc. The selling
expenses are going to change according to the number of product are produced and that
product are has to sell. If the production include the Over expenses among that one of is

Page 30
selling expenses by this we can analysis the cost selling in the total cost from the above
graph.

Table –6 Showing the value of the Raw Material to production

Months Material Total %of

s productio material to
n production
1st month(starts from 1965700 3658650 53.73%
August 2016)
2nd month(starts from 2469840 4680470 53.11%
September2016)
3rd month(starts from 2247800 4340270 51.79%
October 2016)
4th month(starts from 2235600 4256070 52.53%
November 2016)
5th month(starts from 2745600 4181070 65.66%
December 2016)
From the table we can identified that the material cost contribution to the total
production in the 1st month the more cost incurred in material only i.e. 53.73%in next
month on words material cost is decreased in the 2nd month53.11%, inthe 3rd month
51.79%, in the 4th and 5thmonth it is rising in the 4th month 52.53%, and in the 5th month
65.66%. It increases due to high material purchase.

Graph -6 Graph shows the value of raw material cost to total production cost

70.00%
53.73% 65.66%
60.00% 53.11%
51.79% 52.53%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
August
September
October
November
december

Column1

From the graph we can say that more than half off the expenses to the production is to
material cost only in here the company not purchasing material at bulk the company is
going to purchase the material whenever it required it leads higher cost of material the
reason for the purchase of material is in the company There is no storage for purchase
bulk of material and also there is another reason for the material cost increase is the
supplier of material to the company is may be the higher cost he supplying to the
company.

Page 31
TABLE-7

Show the Value of Administration over Head to Production Cost

Months Administrati Production %of

on overhead cost administration
overhead to
production
cost
1st month(starts 899750 3658650 24.59%
from August
2016)
2nd month(starts 860100 4680470 18.38%
from
September2016
)
3rd month(starts 834600 4340270 19.23%
from October
2016)
4th month(starts 868900 4256070 20.42%
from November
2016)
5th month(starts 835500 4181070 19.98%
from December
2016)

From the above table administration overhead is calculated on production cost. In the
1st month the administration cost is very high 24.59% due to there is no administration
decisions towards cost control. in 2nd month it reduces 18.38%, but in 3rd month
variation in administration expenses, in 4th month it totally increases high expenses in
administration overhead in the company and in the final 5th month the cost of
administration is gradually decreasing (19.98%). when it is calculated on production
cost.

Graph –7

Graph showing the value of administration overheads to production cost

Page 32
 25.00%

20.00%

15.00%

Column2

10.00%

5.00%

0.00%
August September october november December

INTERPRTATION:

From the above graph we can interpret that the administration overhead is varies from
one month to another month because of the variation in the administration and
production is taken please due to the company adopt the cost control and cost reduction
strategy. So little changes is taken please from one month to another

Table -8

Show the value of material consumed to product

Page 33
 Month Material productio %material
consumed n consumed to
total
production
1st month(starts 16,46,000 36,58,650 44.99%
from August
2016)
2nd month(starts 25,05,040 46,80,470 53.52%
from
September2016)
3rdmonth(starts  25,27,660 43,40,270 58.23%
from October
2016)
4th month(starts 23,99,950 42,56,070 56.39%
from November
2016)
5th month(starts 36,24,630 56,39,150 64.28%
from December
2016)

ANALYSIS:

From the above data we can analyze that the value of material
consumption to production. In the 1stmonth the material consumption is less it
compeer to its production. In 2ndmonth on words the material consumption is
increasing due to the demand and supply of material in market and also
demand for company tri-wall boxes. In 2ndmonth material consumption
53.52%, in the 3rdmonth58.23%of material consumption but in 4thmonth
material consumption was decreased to56.39%, and in 5thmonth there is
increase to the 64.28% on total production it good performance of a company

Graph-8

Page 34
 Shows The Value Of Material Consumption To Production.

70.00% 64.28%

58.23%
60.00% 56.39%
53.52%

50.00% 44.99%

40.00%

30.00%

20.00%

10.00%

0.00%
August september october November December

Column1

Interpretation:

Form the above graph shows the value of material consumption to production when
material is increases and also material consumption is decreased in 1stmonth later on
word material consumption along with the production is increased due reduction of
labours and replace the technology it leads to automatically production and sales also
increase. When sales increase profit also increase so company gets efficiency.

In this work we can identified the efficiency of raw material utilisation during the
production and also we can analysis the performance of labour and technology. Hence
we can find the contribution of technology in the production.

Page 35
TABLE-9

Month Direct Prime cost %of direct

Labour wages to
prime cost
1st month(starts 389000 2035000 19.16%
from August
2016)
2nd month(starts 361800 3206840 11.28%
from
September2016)
3rd month(starts 320560 2848220 11.25%
from October
2016)
4th month(starts 375200 2775150 13.51%
from November
2016)
5th month(starts 307100 2694030 11.40%
from December
2016)
Shows the Value Direct labour to Prime Cost.

ANALIYSIS:

From the above table we can analyze the value of direct labours to prime cost.
In 1st month high labour cost 19.16% along with less prime cost. In
2ndmonthlabour cost decreased to 11.28% and in the next 3rdmonth 11.25% and
4thmonth 13.51% the labour cost is similar change but in5th month along with
labour cost is11.40% and the prime cost is decreasing.

Page 36
Graph-9

Shows the value of Direct Wages to Prime Cost.

Column2

19.16%

13.51%

11.28% 11.25% 11.40%

August september October november december

INTERTPRATION:

The cost it will incurred during the process of material purchase to conversion
direct material into finished product along with the labour charges incurred in
its activity by this we can compared to prime cost with direct labour cost is
necessary for the production.

From the above graph we can interpret that the value of direct labour to
prime cost if production increases. The company wants more labours if there is
machinery when production increase leads to increase of labour as well as
prime cost. If labour cost or wages increase prime cost also increases.

Page 37
Table-10

Show the value of Factory overhead to woks cost

Month Factory Works %of factory

overheads cost overhead to
Works Cost
1st month(starts 549300 2758900 19.91%
from August
2016)
2nd month(starts
from
September2016) 648900 3820370 16.99%
3rd month(starts 587400 3505670 16.75%
from October
2016)
4th month(starts 601350 3387170 17.75%
from November
2016)
5th month(starts 586300 4803650 17.52%
from December
2016)

Analysis

In the above table the factory overhead are compared with works cost,
this is the cost which is indirectly incurred for production of unit, in
1stmonth19.91% of overhead to works cost, in 2ndmonth expenses are
decreased16.99%in the 3rd month16.75% percentage only changed but in
4thmonth factory overhead is increased 17.75% but the overall works cost is
reduced due to the high production leads to less cost in 5thmonth production is
decreased 17.52%.

Page 38
Graph-10

Shows the Value of Factory overheads to Work Cost.

Column2

19.91%

17.75% 17.52%
16.99% 16.75%

August september october November December

INTERPRETATION:

If Production increases, factory overheads also increases Because factory

overhead includes rent, rates and insurance etc. same and this expenses are
can’t change this cost because this are fixed cost.

Compare to 1stthe value of factory overheads is increases in the month 2nd. If

factory overheads are decreases, and work cost also decreases.

When production decreases the cost salary, power, fuel etc are going to
influence cost variance because this are variable cost when production
increase or decrease it will effect on factory overhead.

Page 39
 Table 11

show the value of profit to total sales

Months Profit Total sales %of profit to

Total sales
1st month(starts 689530 4481880 15.38%
from August
2016)
2nd month(starts 710500 5737800 12.38%
from
September2016)
3rd month(starts 805200 5323920 15.12%
from October
2016)
4th month(starts 654900 5067370 12.92%
from November
2016)
5th month(starts 1002300 5351670 18.72%
from December
2016)

Analysis

From the above table we can analysis that the value of profit to total
sales of last five month sins the 1st month the profit is high 15.38%of total
sales, in the 2nd month it was decreased to 12.38%,in the 3rd month the profit
was increase to 15.12% a and in the 4th month it was reduced to 12.92%and in
the 5th month the profit is increase to 18.72% of total sales and also there is a
decrease of sales.

Page 40
Graph -11

Graph shows the value of profit to total sales

20.00%
18.00%
16.00%
14.00%
12.00%
10.00%
8.00% Column1

6.00%
4.00%
2.00%
0.00%
August
september
october
november
december

Interpretation

Profit is the life blood of the company the profit of the company is increase
month to month it shows the efficiency of the company if cost reduces from
month to month it leads to increase of profit along with the sales of the
company When gets profit, company growth and image also increases. The
graph also says that the profit is increase and the cost is reducing from one
month to another month

Page 41
 Table: 12

Show the value of direct material cost to sales:

MONTHS MATERIAL SALES % OF

COST MATERIA
L TO
SALES

1st month(starts 20,03,300 44,81,880 49.08%

from August 2016)
2nd month(starts 25,18,400 57,37,800 43.89%
from
September2016)
3rd month(starts 22,72,700 53,23,920 42.69%
from October
2016)
4th month(starts 22,57,050 50,67,370 44.54%
from November
2016)
5th month(starts 27,77,030 53,51,670 51.89%
from December
2016)

ANALYSIS

Above table in shows the direct material cost for the past five months
of tri-wall Pak Pvt ltd company 1st month cost of material consumed was
49.08%on sales in 2nd month direct material cost has increased 43.83% due to
various reasons like marketing demand &supply and also the economic
condition. In next three months direct material cost has increased in 3rd month
42.69% in the 4th month44.54% of material was consumed but in 5th month the
direct material cost has increased.51.89%cost involved in sales.

Page 42
GRAPH: 12

SHOWING DIRECT MATERIAL COST TO SALES

60.00%

50.00%

40.00%

30.00%
direct material
20.00%

10.00%

0.00%
August
september
october
November
december

INTERPRETATION:

Material cost study of whole Tri-wall boxes product is less in 1 month

when compeers to sales. It is increased material cost in 2 month .In 3&4 month
material cost is decreased in the month .in next 5month the material cost was
raised51.89%.it is clear from the above graph that material cost has increased
due to increase in sales.

Page 43
Table-13

Show the value of Raw material to material consumed

Months Raw Materials %of raw

materials consumption materials to
material
consumed

1st month(starts 3184200 1646000 51.69%

from August
2016)
2ndmonth(starts 3807560 2505040 65.79%
from
September2016)
3rd month(starts 3020260 2527660 83.69%
from October
2016)
4th month(starts 2606750 2399950 92.07%
from November
2016)
5th month(starts 3066830 2694030 87.84%
from December
2016)

ANANLYSIS:

From the above table we can decide that in the tri wall company the
material are utilised very effective manner in conversion of materials into
finished good by this table in 1st month the consumption of material is 51.69%.
their after the company increase its material consumption in2nd month is
65.79%,in 3rd month 83.69%,in the 4th month the material consumption is
increasing is 92.07% in the 5th month the material used for consumption is
reduces to 87.84%.

Page 44
Graph -13

Show the value of material to material consumed

100.00%
92.07%
90.00% 87.84%
83.69%
80.00%

70.00% 65.79%

60.00%
51.69%
50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
August september october November December

raw material

Interpretation:

In a above specified graph we can interpret that the materials used for
the production is goes on increase due to the demand of the tri wall is increase
and also the cost of material purchase is changed along with the effective
utilisation of materials is taken placed in the company due to this the variation
of material consumption is happen.

Chapter-6

Page 45
 FINDINGS AND CONCLUSION
FINDINGS:

Findings can be defined as determine the factors which have come to know the time of
study.
 As per analysis the value of material cost to total cost it was 51.83% in the
month of august followed by 51.07% in the month of September, 49.74% in the
month of October, 50.67% in the month November and 63.13% in the month of
December.

 As per analysis value of the labour cost to total cost it was 10.26% in the month
of august followed by 8.31% in the month of September ,7.06% in the month of
October ,8.42% in the month of November and 7.01% in the month of
December.

 As per analysis the Factory overhead is compared to Total cost the factory
expenses of last five month. In the 1st month the factory expenses are very high
it is14.48%, In next two month the cost is decreased in 2nd month13.42%, in the
3rd month the overall the high cost is reduced is 12.94%, in the month of 4th it
increase to 13.50%and in finally in the month of 5th it came to down is13.38% it
shows the good performance of company when it is compeered total cost
.
 As per analysis the administration overhead cost in last five month and it is
compeered to the total cost for to know the administration expenses on total cost in
the 1st month 22.92% the expenses is very high in 2nd month it is 17.26%was reduced
and in the 3rd month it increase to 18.94%, in the month of 4 thmonth it analysis to the
total cost it will again increase later in the month it may constant only the little
changes are taken place it is 19.07%. On the total cost.

 As per analysis the selling and distribution overhead is measured on total cost.
In 1st month the selling cost is 3.53%, in 2nd month it decreases 3.23% due to
less production, in 3rd month onwards the selling expenses increases in this
month the cost is 3.93%, in 4th month 3.51% and in 5th month selling cost is
increase again 3.84%, it calculated on total cost.

 As per analysis we can identified that the material cost contribution to the total
production in the 1st month the more cost incurred in material only i.e. 53.73%in
next month on words material cost is decreased in the 2nd month53.11%, inthe
3rd month 51.79%, in the 4th and 5thmonth it is rising in the 4th month 52.53%,
and in the 5th month 65.66%. It increases due to high material purchase.

Page 46
  As per analysis the administration overhead is calculated on production cost. In
the 1st month the administration cost is very high 24.59% due to there is no
administration decisions towards cost control. in 2nd month it reduces 18.38%,
but in 3rd month variation in administration expenses, in 4th month it totally
increases high expenses in administration overhead in the company and in the
final 5th month the cost of administration is gradually decreasing (19.98%).
when it is calculated on production cost.

 As per analysis we can analyze that the value of material consumption to

production. In the 1stmonth the material consumption is less it compeer to its
production. In 2ndmonth on words the material consumption is increasing due to
the demand and supply of material in market and also demand for company tri-
wall boxes. In 2ndmonth material consumption 53.52%, in the
3rdmonth58.23%of material consumption but in 4thmonth material consumption
was decreased to56.39%, and in 5thmonth there is increase to the 64.28% on
total production it good performance of a company

 As per analysis can analyze the value of direct labours to prime cost. In 1st
month high labour cost 19.16% along with less prime cost. In 2ndmonthlabour
cost decreased to 11.28% and in the next 3rdmonth 11.25% and 4thmonth 13.51%
the labour cost is similar change but in5th month along with labour cost
is11.40% and the prime cost is decreasing.

 As per analysis the factory overhead are compared with works cost, this is the
cost which is indirectly incurred for production of unit, in 1stmonth19.91% of
overhead to works cost, in 2ndmonth expenses are decreased16.99%in the 3rd
month16.75% percentage only changed but in 4thmonth factory overhead is
increased 17.75% but the overall works cost is reduced due to the high
production leads to less cost in 5thmonth production is decreased 17.52%.

 As per analysis we can analysis that the value of profit to total sales of last five
month sins the 1st month the profit is high 15.38%of total sales, in the 2nd month
it was decreased to 12.38%,in the 3rd month the profit was increase to 15.12% a
and in the 4th month it was reduced to 12.92%and in the 5th month the profit is
increase to 18.72% of total sales and also there is a decrease of sales.

 As per analysis we can analysis that the value of profit to total sales of last five
month sins the 1st month the profit is high 15.38%of total sales, in the 2nd month
it was decreased to 12.38%,in the 3rd month the profit was increase to 15.12% a
and in the 4th month it was reduced to 12.92%and in the 5th month the profit is
increase to 18.72% of total sales and also there is a decrease of sales.

Page 47
  As per analysis direct material cost for the past five months of tri-wall Pak Pvt
ltd company 1st month cost of material consumed was 49.08%on sales in 2nd
month direct material cost has increased 43.83% due to various reasons like
marketing demand &supply and also the economic condition. In next three
months direct material cost has increased in 3rd month 42.69% in the 4th
month44.54% of material was consumed but in 5th month the direct material
cost has increased.51.89%cost involved in sales.
 As per analysis we can decide that in the tri wall company the material are
utilised very effective manner in conversion of materials into finished good by
this table in 1st month the consumption of material is 51.69%. their after the
company increase its material consumption in2nd month is 65.79%,in 3rd month
83.69%,in the 4th month the material consumption is increasing is 92.07% in
the 5th month the material used for consumption is reduces to 87.84%.

Page 48
 SUGGESTIONS.

 Tri-wall pak pvt ltd company improving efficiency through cost control and
cost reduction.
 Research and development activities should be taken up by the firm in order to
be with competitive world to improve the quality of service.
 Maintaining the high speed of response which provides competitive edge
technology has to be update often and fast.
 Infrastructure as well as equipments of Tri-wall pak pvt ltd has the volume
from that it gives quality service and get customer relation which helps to earn
the profit.
 There is a lack of advertisement for their service so it has to take up huge sales
promotional activities including their service.
 Some of the machineries should be replaced with the old machinery which is
outdated by which the quality of product can be improved.
 Internal audit should be carried out once in three months so as to get the
updated information about their operation.
 Internal audit should be carried out in the organization so as to get the safety
measures about their employees.
 In the organization should be carried out once in six months so as to get the
proper guidelines about their employees.
 The three systems i.e., product wise, section wise and unit wise. This helps to
the company to take better decision with the help of accurate cost of each
product.
 Organization has to arrange separate department to the different divisions.
 Costing measure should be adopted by the company in order to justify the cost
only in terms of what they ought to be under the particular operating
conditions.

Page 49
 CONCLUSION.

In the present industrial scenario it becomes difficult in the industry to Survive

unless the costs are correctly accounted for controlled and reduced so as to
sustain, retain and grow in the industry. The strategy of the company is good
and organization structure of the firm functioning efficiently. This helps the
smooth running of functional activities.
The working condition of the firm is satisfactory which gives good lighting,
ventilation, medical facility etc.
In the firm morale of the employees is high if leads to increase the
customer relation. The profit of the firm increased year after year. The firms
depends upon the services so when customer are satisfied from the service.
This firm gets reputation i.e., main reason company gives quality, service as
well as good accessories while doing the service.
Tri-wall pak pvt ltd has a computerized accounting t helps to maintain each
and every transaction in the firm so there is no misappropriation and frauds.

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ANNEXURE

Cost sheet for the5 month of the year2016-17

Particulars Total Total

cost(August) cost(September)
Opening stock of raw Materials 430600 787900
Add: Purchase of Raw Materials 1965700 2469840
Add: Carriage inwards 37600 48560
Less: Closing stock of Raw Materials 787900 501260
Raw materials consumed 1646000 2505040

Direct wages 389000 401800

PRIME COST 2035000 3206840

Add: Factory overheads 549300 648900
Add: opening work in progress 241830 67230
Les: closing work in progress 67230 102600
Work Cost 2758900 3820370

Add: Administration overheads 899750 860100

Cost of Production 3658650 4680470

Add: Selling and distribution 133700 156000

overheads

TOTAL COST 3792350 4836470

PROFIT 689530 710500

SALES 4481800 5737800

Page 51
 Particulars Total cost Total cost
(October) (November)
Opening stock of raw Materials 501260 246300
Add: Purchase of Raw Materials 2247800 2235600
Add: Carriage inwards 24900 21450
Less: Closing stock of Raw Materials 246300 103400
Raw materials consumed 2527660 2399950

Direct wages 320560 375200

PRIME COST 2848220 2775150

Add: Factory overheads 587400 601350

Add: opening work in progress 102600 32550
Less: closing work in progress 32550 21880
Work Cost 3505670 3387170

Add: Administration overheads 834600 868900

Cost of Production 4340270 4256070

Add: Selling and distribution 178450 156400

overheads

TOTAL COST 4518720 4412470

PROFIT 805200 654900

SALES 5323920 5067370

Page 52
 Particulars Total
cost(December)
Opening stock of raw Materials 103400
Add: Purchase of Raw Materials 2745600
Add: Carriage inwards 31430
Less: Closing stock of Raw Materials 186400
Raw materials consumed 2694030

Direct wages 307100

PRIME COST 3001130

Add: Factory overheads 586300
Add: opening work in progress 21880
Less: closing work in progress 263740
Work Cost 3345570

Add: Administration overheads 835500

Cost of Production 4181070

Add: Selling and distribution 168300

overheads

TOTAL COST 4349370

PROFIT 1002300

SALES 5351670

Page 53
 BALANCE SHEET as at 31-3-2016

Particulars Amount 31-3-2016

source of funds
Equity and liabilities
Share holder’s funds
Share capital 56,07,100
Reserves and surplus 3,36,84,054 3,92,91,154
Non-current liabilities
Long term borrowings 13,44,894
Long term provisions 9,85,641 23,30,535
Current liabilities
Short term borrowings 301110
Trade payables 8568845
Other current liabilities 1736234 1,06,06,190

TOTAL 5,22.27,879
APPLICATION OF FUNDS
Assets
Non-current assets
Fixed assets
Tangible assets 1119365
Intangible assets 548215
Long term loans and advances 3934631
Other non currents assets 1124942 16799153
Current assets
Inventories 2165517
Trade receivables 5402728
Cash and bank balances 27218282
Short term loans and advances 642199 35428726

Total 52227879

Page 54
 BIBLIOGRAPHY
1. TEXT BOOKS

Authors Title Edition Year Publicati Place

on
st
R. Krishna Business 1 2006 Himalaya Bangalor
swami & Research publishing e
B.G.Sathya Method House
Prasad
S.P Jai & Accountin 2nd 2006 Kalyani New
K.L Narang g for Publishers Delhi
manager

Ravi M Cost 4th 2008 Tax man New

Kishore manageme allied Delhi
nt services
B.
Mariyappa & Accountin 1st 2007 Himalaya New
B.K Suresh g and publishing Delhi
informatio house
n system

1. WEBSITE
www.tri wall.com

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