INTRODUCTION ABOUT THE PROJECT

An internship program is a element of culture paths is designed to present students in

VISVESWARAYA TECHNOLOGICAL UNIVERSITY in MBA. It is considered to supply students
among real life understanding in their extent of specialization. The internship program helps, the
students to achieve knowledge regarding commercial standards and its working background
theoretically as well as basically. And it is help in the direction of build the relationship among the
students and organisation. And internship be, regularly conducted between extent of, 6 weeks in this
phase, of internship program provides, understanding of a fastidious company or industry’s risk, and
returns. identity controls in a, working environment.

OBJECTIVES

 To learning the profile and routine of Global Boards Pvt. Ltd.

 To appraise Profit-Volume ratio of the company
 To categorize the Break- even Point of the company
 To analyze the actual, and standard cost of material, labour, and overhead variance, in the
organization

SCOPE OF THE STUDY

The scope of this study is, that which is help us, en route for know the existing costing system, mode
of operation, enquiry of, variance and techniques of standard costing ,between suggestion to, Global
Boards Ltd., Ramanagara.
CHAPTER -02

REVIW OF LITERATURE

1. Md. Mamunur Rashid ACMA (2016):

The method of standard costing is traditional costing, it is important to management aid for
the purpose of cost control. In Bangladesh to study the use of standard costing in the listed
Pharmaceuticals and Chemical Industries was the main aim or goal of this article. But the
findings of the study shows that in the hand of the management standard costing is very
useful tool for controlling the cost and in managerial decision making. Turkey, UK, New
Zealand and Dubai are the places where the study is consistently conducted for the above
findings.

2. Md. Abdul Hannan Mia FCMA PhD, Md. Qamruzzaman ACMA (2016):
The intention of this paper is to recognize the Bangladeshi manufacturing industries of
obedience of IAS-2 and to categorize present circumstances of inventory appraisal. The
foremost intent of this study is to discover the nonconformity, and IFRS compliance
organization, area etc. Manufacturing organizations be using weighted middling cost
manner by 48.5%, LCM or disposable realized value by 30%, and 85% of using by refined
good inventory judgment. Conclusion of this study , is need to grant equivalence in
concerning amid inventory reporting, in financial statements.

3. Mula Nazar Khan, Muhammad Rizwan, Fahad Islam, Zain Aabdeen (2016):
This study that how long , Pakistani and Chinese firms ,are using standard costing. as well
as this study says that the diversity in use by Pakistani and Chinese firms. Questionnaires
are used to assemble the data commencing, 57 Chinese companies and 64 local companies.
The researchers is approach the manufacturing companies to use the snowball sampling or
referring sampling which were including the study. Standard costing technique was still is
using the questionnaire. The questionnaire is adopted from the prior studies. Suggestion
given by Empirical results is that the Chinese firms are still using standard costing. To test
the data SPSS software is using in this research or study. Study says that 69% of Chinese
firms and 71% of Pakistani firms are standard costing system. At the time of decision
making this study is very useful for corporate managers regarding costing system.

4. Sadiq Rabin Abdullah, Iyanuoluwa oni, Muhammed Dahiru Ahmed, FarukImam

Shakur (2015):

Study of the standard costing is the aim at examining the effects of MIN telecommunication
companies to determine techniques of any effect on profitability, whether procedure of
standard costing and principles of standard costing are actually agreed by Nigerian MIN
telecommunication company to discover the connection between standard costing and
profitability of telecommunication companies.
5. Thankgod c Agwor (2015):
The main reason to conduct this study is to investigate the standard costing and cost control
technique relationship in Nigerian oil and gas industry. Primary method and secondary
method of data collection was adopted to generate the necessary data for this study. By
using 5-point Likert scale questionnaire design primary data was collected by the
administrators and on the other hand the Secondary data was from Nigerian Stock Exchange
Factbook of 2011 has been sourced. In this study there is significant relationship exist
between standard costing and cost control. And the observation said that, if the firm uses
more standard costing means then the more significant efficient on firm’s material, labor,
and overhead cost.

6. Chao Su (2013):
The main purpose of this study is to describe the two main cost accounting systems takes
place in Germany, Japan and US respectively from the aspects of background, theoretical
and empirical. Qualitative research is used in this study, simply by terminology it was
unable to draw a lines between the cost accounting practices, it is unable to predict. In the
three countries (Germany, Japan and US) the major determinants of divergence of cost
accounting system was observed.

7. CemkutBadem, EmreErgin, Colin Dure (2013):

Standard costing has a very big debate in future today. According to some academicians’
modern manufacturing environment cannot be used standard costing form or method for
comparing the actual cost and estimated cost. To study the use of standard costing in leading
manufacturing sector and automotive sector of Turkey is the main of this article. According
to survey average rate of usage of standard costing was 77%. In non-users local small
suppliers are majority. In terms of importance and usage there is a statistical difference
between primary and supplier industries.

8. DURY (2013):
Standard costing matches the pre-set costs to the real costs and forms expected cost targets
that accumulate in operation. Standard costing is most effective means for cost control and
it is using in various industries throughout the world. Automobile companies can easily find
out that which department will consume more cost in operation than budgeted values by
using standard costing.

9. Onwurah Virginia Ngozi (2013):

This study tells that the effects on profitability of a manufacturing company and the purpose
of this study is to discover that the technique of standard costing will have effect on
profitability o-r not, it is done to know the relationship between profitability and standard
 costing of manufacturing concerns and also to evaluate weather Nigerian manufacturing
companies are using standard costing technique and principle or not. Descriptive survey
method is using in Nigerian breweries. The conclusion says that Nigerian manufacturing
companies are using standard costing widely and planning, control cost and making
decision in the right time and place is make very nicely in very good sense. The aids of the
standard costing manufacturing companies are elimination of products which are not giving
profits and provis ion of costing information and controlling cost.

10. Abobaker M Abdurahman Fatah(July 2013):

To Libyan company the agricultural sector is also one of the a very important contributors
in which Libya company is owned by government it was compulsory to compete with the
foreign companies. The objective of this study is to investigate and understand the cost
accounting system which is currently practicing in Libyan agricultural firms. In this study
Mixed method explanatory survey design is used to collect data by using 3 instrument
namely Questionnaire-based survey, interview and documentation analysis. Total 57
Questionnaire is asked to agricultural firm which is owned by government. The conclusion
of this study says that by using cost accounting system to managing Libya agricultural firms
production costs and expects that implication for that firm.

11. Kamilah Ahmad (2012):

This study is takes place to increase understanding the adoption of Management accounting
practices in SMEs. He got response from 160 Malaysian SMEs out of 1000 questionnaires
sent. The result shows that majority of respondents are using MAPs properly and medium
sized enterprises are also using MAPs properly that pushes MAPs toward downwards and
most of the institutions are using strategic management accounting. The main objective of
this study is to investigate how many MAPs are employed in Malaysian SMEs, the role
played there and to determine the factor which affects the Malaysian SMEs to use
Management accounting practices (MAPs)

12. Marie, Cheffi, Louis, and Rao (2010):

By conducting survey in 100 companies doing business in Dubai (UAE) the study has been
started to identify whether standard costing is still relevant. In that 100 companies contains
53 companies from industrial sectors and 43 companies from service sector. They found that
standard costing are used by 77% of industrial sector and 39% of service sector. Due to
affordability, simplicity and flexibility service sector and industrial sector is expanding as a
part of globe and the standard costing is remain favorite cost accounting in finance
professionals and accountings.

13. Horngren(2008):
Developed countries are using standard costing in wide range. Controlling the costs is the
main purpose of standard costing, managerial activities like budgeting and product pricing
are contributing by standard costing. For example, according to survey 1980s and 1990s
 manufacturing companies are using standard costing system other than traditional costing
system. Standard costing usage rates are Ireland 84%, Japan 65%, Sweden 73%, England
76% and USA 86%.

14. Gregory B Waymire, Sudipta Basu (2007):

They develop their research by determining Accounting History Research and pose 6
questions about historical accounting evolution. The summarization is done by using
accounting history of past ten thousand year organized our six questions. By discussing
numerous empirical studies using archival accounting data and provides some more
questions to extend research which was published. The objectives of this study is to identify
the research opportunities which are available under posed six questions which was together
help us to build a proper accounting prospects. The conclusion of this study is without the
knowledge of past experience or history the accountant may not be aware about sufficient
evolutionary nature of society.

15. Ali Kamen Ibrahim (June 2007):

The title of this research is the practice of standard costing systems in Syrian public
companies. This study determines the Syrian manufacturing public companies practices of
standard costing system. In Syria through analysis of past contemporary literature and
exploratory visit to company the questionnaire instruments are determined. Out of 96
population of SPCs questionnaires are distributed to 53 SPCs (that is more than 50% of
population) by hand using clustering sample. Out of that 53 SPCs only 44.4% of SPCs are
using standard costing system on partially. The objective of this study is to explore and
examine the extent to which standard costing system using in Syrian manufacturing public
companies and how it is been practicing and gaining insights into its implications.

16. Mitchell (2005):

Standard costing is a technique which is useful for performance evaluation, cost control and
determining product costing. According to Mitchel standard costing provides the following
benefits in performance of evaluation like to help manager control operations in accordance
with the plan standard cost variance provide feedback information design. Difference
between planned cost and actual cost are highlighted in standard costing. Cost variance
provide different kind of elements that together make up the total reported variance:

• System errors of costing

• Standard of inappropriate
• Uncontrollable random factors
• Operational causes with the variance of controllable variance (Mitchell 2005)

17. Massen, Carmel L Barnett, Paul G Sees, Karen L et al (2004):

The main objective of this study is to compare 180-day methadone detoxification enriched
with psychosocial services and the cost and cost effectiveness methadone maintenance
treatment. There are 179 adults with diagnosed opioid dependence. Marcov model is used to
 measure to adjust quality to estimate how many years of survival. The conclusion of this
study says that methadone maintenance is more effective when it is compared with enriched
detoxification services with a cost effectiveness ratio by accepting survival advantage.

18. Buyukmirza (2003):

The main reason for standard costing is to control the cost. The uses of standard costing are
budget preparation, performance evaluation, price setting and decision making etc. In the
survey Buyukmirza stated that the standard costing is using more in developed countries in
pricing products, preparing budgets and controlling costs.

19. Lucey (2002):

Lucey argues that for standard costing to be successful, standard costing need stability and
work must be repetitive and existence. In so many sectors of the economy these conditions
are founded. For example: Manufacturing sector, Service sector like transport, banking,
hotel etc. in parts of public sector i.e. street cleaning etc. She started first with standard
costing as a technique which is compared with predetermined with actual cost. The
predetermined costs are called standard cost and the difference between standard cost and
actual cost is called variance. Variance analysis is that the process by which the difference
between actual costs is broken down into different elements.

20. BeataMorelli & Carl-Joachim Wiberg (2002):

This study requires a secondary data for collection of data. Data collected from intranet,
internal publications from SKF, specialist literature and articles are the sources of secondary
data collection. The subject standard costing has been examined by every sources. For
collection of secondary data there is no particular starting point with the intension of getting
a better overview of material available. To understand the issues in the research the standard
costing and costing are studied deeply the available sources. In Gothenburg University
LIBRIS and GUNDA are used to collect academic literature and thesis etc.

This study there is significant relationship exist between standard costing and cost
control. And the observation said that, if the firm uses more standard costing means
then the more significant efficient on firm is material, labour, and overhead cost.
Ascertain the costing system and ascertain the standard costing.
 CHAPTER -03

INDUSTRY PROFILE

INTRODUCTION ABOUT THE INDUSTRY

The Global Boards is a Manufacturing company established in the year of 2006. These are
mainly producing Pre Compressed Press Boards [PCPB] that are mainly used in electronic
Transformers for the purpose of insulation. Good qualities of PCPB boards are the better life
of transformers. This type of industries provides detailed description about the manufacturing
and testing of pre compressed pressboard used in transformer.

Industrialized of insulation press boards for distribution and power transformer comes under
speciality board manufacturing. In Ramanagara Senapathy Whitely Pvt Ltd was the first
company manufacture in collaboration with London Company Whitely in the year 1959.
Later on Raman Boards was started in Thandrapura Mysore in the year 1980.

Insulation is very important factor for the life power and distribution transformer. This is
manufactured as per ISE 60641 and ISI1576 standards.

Pre compressed press boards are very abundant and inelastic boards which are artificial by
the purity and mechanical power IEC 643-1 will provides detailed clarification about the
PCPB. The Company’s product is broadly used in shielding the resources in power and
distribution to transformers.

PCPB is established for uninterrupted and speedily testing evaluation of the raw materials
and the product. PCPB was involving separate conditioning and testing facilities.
The raw material are recycled in manufacturing the pre compressed press boards that are
uncontaminated soft timber unbleached sulphate soft tissue. From the sub –freezing
farmstead the appropriate alliance of the electrical and the mechanical strength, the raw
materials are bringing in by the USA, Russia, Canada, Australia, and western kingdoms.

FUTURE GROWTH AND PROSPECTS

 Firm Present Manufacturing Capacity Of PCP Boards Is 1 Ton Per Day. The Firm Is
Expected 2 Tons Per Day In Span Of Next 2 Years. The Firm Expected To Use
Advanced Technologies In Lab Testing Purpose.
 Firm Require The Advanced Automation With Sophisticated Material Handling
Process Those Are Loading, Unloading Marigold Round Conveyor Systems.
 Manufacturing Of Pre Compressed Press Boards Is Biggest Challenges Because The
Multi-National Companies Competitors Having Already Established Last 45 Years
Back. But The Global Firm Started Just 8 Years Before So It Takes More Time To
Achieve Their Target.
 The Global Board Firm Present Supplies Pre Compressed Press Boards Only Some
Customers Who Are Manufacturing Transformers. Almost It Supplies 40 And More
Customers In India. The Firm Decide To Increases The Number Of Customers In
Future Days.
 The Firm Provide The Press Boards To Some Customers Only 50% Of Their Needs, In
Future Days Will Reach To 100% To Their Customers.
 The Firm Requires The Grid Certification Form NTPC Is Required.
 Through The Firm Have T Q M, They Require I S O Certification. And It Is Required
In Final St
CHAPTER-04

COMPANY PROFILE

Company profile:

The Global Boards Company is a partnership firm. Producing Pre Compressed Press Boards. Which
are established in the year 2006. it was positioned in Archakarhalli Manager District BM Road. It was
list under Indian Partnership Act 1932 U/S 58(1).The Global Boards company is keeping the
transaction with SBI Ramanagara.

Short note on Company Profile

Organization : Global Boards

Location : #708. Archakarahalli. BM Road Ramanagara-562159

Linking number : 080-27201026

Dealing Fax : 080-272724242

E-Mail : globalpcboards@yahoo.co.in.

Period of Formation : 2006

Authorize status of firm : Partnership firm registered under Indian partnership Act 1932U/S58(1)

Nature of Corporate : Manufacturing of Pre Compressed Press Boards

SSI Record-keeping No : 290291200099. Date:30\5\2013

Container No : 29870457131

ECC No : AAGFG 3320FEM001

Income tax registering : PAN No:AAGFG3320F

Industrial unit license No : MYB-15925

EPF Process No : KN-43565

ESI process No : 53-26037-82

Transport and Import code : 0705017613

Industrial unit are covered : 3700 sq.mts

Industrial unit area un covered : 1600 sq.mts

Bank name : SBI Ramanagara

Bank ifsc code : SBIN0004998

Account No : 30043427520

1.3 Promoters
The Global boards are a partnership firm is recognized in the year 2006 and its listed with Indian
partnership act 1932 U/S 58(1). The commercial tax providing the license from small scale industries.
& it’s a partnership firm the following associates are the partners of global boards firms.

 MR.N. Ravi Kumar

 MR. Lakshminarayana
 MR.V. Narasimha murthy
 MRS. Hemalatha murthy

 MR. N. Ravikumar

Mr. N. Ravikumar aged 47 years is a BE. Mech graduate. & he has completed Years
of familiarity in the mfg.& marketing field of insulation of pre compressed press
boards @ global boards co. He has operated with M\S Senapathy Whitely limited
Ramanagara. The sensapathy whitely concern limited co. is one of the leading
insulation board mfg in Karnataka. For over 7 years & @ the time he started his own
unit M\S Royal boards industries limited in Kanakapura and Ramanagara.

 Mr. Lakshmi Narayana

Mr. Lakshmi narayana aged 48 years is a civil & one of the civil services by
occupation. in last year’s he involved in the business construction. He has a wide
contractor in the field of marketing & he will supports & suggest in the promoting of
the firms products in many part of country.

 Mr.V. Narasimha murthy

Aged 53 years. He is the promoters of the global boards co. He is post graduate in
arts.& at current continuing a provision store in Ramanagara. & he was the owner of
land of global boards co.@ Ramanagara

 Mrs. Hemalatha Ramamurthy

Mrs. Hemalatha Ramamurthy aged 58 years. She is one of the promoters of global
boards co. & her husband Mr. SK. Ramamurthy is one of the promoters of global
boards co. He is a BE. Electronics graduate experienced in the field of insulation for
electrical applications. & he serves his services in western India Ply wood limited.
Mafat lal plywood limited. Senapathy whitely limited Ramanagara etc.& he has a
marketing and technical specialist in Global boards
1.6 Product profile
Global boards co. mfg the pre compressed press boards in variety sizes & kinds as follows.

 0.8mm 1173*2350mm
 1.0mm 1173*2350mm
 1.7/1.8mm 1173*2350mm
 2.1/2.6mm 1173*2350mm
 3.2/3.5mm 1164*2311mm
 4.0/4.4mm 1164*2311mm
 5.0/6.0mm 1164*2311mm
 8.0 to 50mm 1152*2250mm
 Low thickness sheets
 High thickness sheets
 Low thickness boards
 High thickness boards
 Laminated material thicker than 8mm

Cross sectional view of per compressed pressboards:-

Below shows the pre compressed Pressboards (PCPB) of different types:-

Thickness Range: 0.5mm to 6mm. Thickness Range above 6mm.

MACHINED MOLDED COMPONENTS

PCPB 1.0 mm PCPB 8.0 mm

Service profile
The global boards co. provided good services’ to his customers and safest distribution of pre
compressed press board. The safest delivery of boards is usually carrying through trucks. The co’s
press boards are keeping with safety seal and protected from the wetness effect.

Area of operation
The global boards co. is operated in India in different parts of country are as follows

 Karnataka
 Bangalore , Mysore , Kodagu
 Tamil Nadu
 Rameshwaram
 Madhya Pradesh
 Bhopal
 Gujarat
 Vadodara
 West Bengal
 Kolkata
 Hyderabad
 Baroda
 Meerut

1.7 Infrastructure Facilities

The global boards concern consuming a appropriate facilities & work place is required to attain
their product needs.

 Work place building

The firm is having a satisfactory and advanced technology in occupied locale. The
technologies are required for mfg the wonderful and designed of the pre compressed
press boards.
 Storage facility
The global co. have a adequate ware house facilities for possession & cargo space
of pre compressed press boards. And transformed parts of press boards prior storing
of boards parts previously to check the atmosphere. That is clever or not.
 Safety
In advance the packing in ware house. The co’s pre compressed press boards are
adequately insured for the rationale of protection. The co’s products are insured
under the all-purpose insurance policy. & the co’s as lengthy as the safest apparels
& personnel protection to their employees.

1.8 competitors information

 1) M/S Senapathy whiteley private limited Ramanagara
2) Raman Boards limited Nanjangudu. Mysore
3) Western India ply woods limited

PROCESS FLOW CHARTMATERIAL BALANCE CYCLE:

RAW MATERIAL

HYDROPULER

300 kgs
STORAGE TANK 3 NOS.
Capacity each

REFINER

MACHINE CHEST

Rejected wet sheets

BOARD MACHINE Recycled

4.5% cutting
Boards recycled
CUTTING

PACKING & DISPATCH

 100% material recycled
 For every 1000 kgs. Of
Production wet board
Recycled is 30 kgs. And
Cutting boards of 45 kgs,
Is recycled.

Visions
Global boards co. Proposals suitable & cost effective distribution in order to satisfactions the
solution to online vendors. In addition to offer alternatives distribution option to postal operatives and
mail consolidators all over the country.

 To discharge the customers pleasure through involvement the good worth products of pre
compressed press boards
 The global boards co. Conserving, good prominence in stretched years
 In all year our co. is causative the funds, to orphanage trusts. Educational relatives. Handy
caps etc.
 The co. is full satisfying the customer’s accomplishment by provided that the cost benefits
and margins

1.5 Mission
 At at hand the global boards co, have yield Rs.3 crores and we are planning to accomplish
or swelling the yield Rs.5 crores in next year.
 by the side of nearby the co. triumph the orders from Bangalore. ,Chennai, Mumbai, and
Kolkata. And we are planning to inflate the demand next to northern piece of the country.

Quality Policy
The global boards co. in actual fact offers training program to employees. That is technical &
spread while using the machinery in the running environment of the co. and maintaining the products
by on condition that the unsurpassed quality and cost settlement timely of pre compressed press
boards.

COMPANY PROFILE
MCKENSY 7s FRAMEWORK

McKinney’s 7s Model is shown in fig.

The McKinney’s 7 framework provides, a useful framework for analyzing the strength &
weakness of an organization. The McKinney’s consulting firm notorious tactic as only 07
essentials exhibited by the best managed companies. The 7’s reproduction can be used in a
spacious mixture of situations where an association point of view is useful, for example

∙ recover the show of a company ∙ check up the likely sound effects of upcoming changes
within a company ∙ support departments and processes at some stage in a separation or
acquisition ∙ find out how best to put into service a proposed line of attack
The Mckensy’s 7-S model involves seven self-determining factors which are regarded as as
either “Hard” or “Soft” fundamentals:

Hard Elements

1. Strategy

2. Structure

3. Systems Soft Elements

Soft Elements

4. Shared Value

5. Skills

6. Style

7. Staff

Hard elements are easier to define or categorize and management can honestly manipulate
them: These are strategy statements; organization charts and exposure lines; and ceremonial
processes and IT systems.

Soft elements, on the other hand, can be more complicated to illustrate and are less tangible
and more predisposed by culture. However, these soft elements are at the same time as
important as the hard elements if the organization is going to be present successful.

3.1 STRATEGY

The concept of approach includes Mission, Objectives, Goals and major accomplishment
plans and policies. The integrated vision and bearing of the company in addition to the
comportment in which it derives articulates communicates and trappings the vision and
direction.

A) The foremost stratagem is to warrant ceiling exploitation of available wherewithal

B) To enlarge our situation of leadership in India to launch global.

C) Social dependability is resembling shape, education and environment safeguard

D) To be along with the companies’ top 10 most fashionable to work for.

E) To constantly achieve a revisit on invested capital of at slightest 10 points elevated than

the cost of capital.

3.2 STRUCTURE

It refers to the organization structure which provides in sequence on the subject of who
reports to whom and how task are, divided and integrated. The policy and trial which govern
the line of attack in which the organization acts within itself and within its atmosphere It
prescribes the ceremonial liaison surrounded by an assortment of positions & activities
engagements about reporting how an organization component is to communicate in the midst
of other member.

3.3 SYSTEMS

The system in the 7s framework refers to every bit of set of laws and regulation technique
and trial and in cooperation formal and informal that go together the organization constitution
The organism is federal software used in the company public soft soul supply Information
System.

3.4 SKILLS

It refers to one of the the bulk important element or capabilities infatuated next to the
organization are skills. The term skills take account of that potency which largely of the
citizens used just before illustrate the company. Skills refer to the facts that workforce have
the skills needed to carry out the company’s tactic

Training and enlargement It ensures nation discern how to do their jobs along with hang
about up to blind date with the latest performance. subsequent are the skills overcome by
means of the Global Boards

A) Communication Skill

B) Technical Skill
C) Leadership Skill

D) Time Management

E) Interpersonal Skills

F) Motivation

3.5 STAFF

Staffing referred as HR of an organization where they have a say to the fullest coverage to
accomplish the organizational goal contained by a predetermined period. Staffing represents
the developments of employees in terms of miscellany, appointment preparation advertising
and concert etc. Global Boards includes 20 members as administrative centre workforce and
further than 100 members as employees or workers. They are provided with the following
incentives:

A) Bonus

B) Provident Fund

C) Medical facilities

3.6 STYLE

It refers to manner of working and the reporting relationship style means how administrator
collectively expend their time and consideration and how they bring into play emblematic
manners how management acts is accompanying important than what management declare
the working of the management is Participative mode

3.7 SHARED VALUES

Being Accountable

Delivering Quality

Keeping Promises

Being Positive

Being Reliable
Trustworthy

1.9 SWOT Analysis

Strength
 The co has excellent eminence surrounded by the customers &
follow total superiority mgt(TQM)
 The co. has pleasing customers all more India
 Mfg the towering quality boards @ competitive price
 bendable glory policy
 Provide admirable client provision all over spaces
 The co. has excellent research & development panel
 Maintaining first-rate employees joining together strength

Weakness
 towering raw material cost
 wholesale credit period to customers my leads be deficient in of
liquidity
  Lack of investment avenue
 Lack of commercial

Opportunities

 The co. has sufficient land for prospective expansions

 Employment opportunities to insignificant & miniature
magnitude industries
 spreading out of business individual during future
 Opportunities are provided to hamlet industries for making
small mechanism of pre compressed press boards

Threats
 Increasing labour cost
 Raw material are sourced commencing abroad
 Strict labour cost

RATIO:

1. A Simply one number expressed in terms of an additional number.

In former words a ratio expressed mathematical relationship connecting one number and
an added number

01.: CURRENT RATIO:

This ratio is frequently used to complete the short phrase financial analysis. also
known as the company ratio. This ratio matches the current assets of the unchangeable to its
current liabilities.

CURRENT RATIO = Current Assets / Current liabilities

 Year Current Assets Current Current Ratio
Liabilities
2012 – 13 81,46,919 21,68,936 3.76

2013 – 14 75,18,299 8,99,180 8.36

2014 – 15 80,31,027 8,94,297 8.98
2015 – 16 84,84,104 11,37,717 7.45
2016 – 17 1,12,30,703 15,74,046 7.13
2017-18 16,65,768 34,45,879 4.8

current ratio
8.98
9 8.36
7.45
8 7.13
7
6
4.8
5
3.76
4
3
2
1
0
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

02. QUICK RATIO

This ratio is also known as acid test ratio or liquid ratio. It is a more serve test of
liquidity of a company.

Formula:
Quick Ratio = Quick Assets /Current Liabilities

Year Quick Assets Current Quick Ratio

Liabilities
 2012 – 13 76,02,591 21,68,936 3. 51
2013 – 14 63,57,792 8,99,180 7.07
2014 - 15 68,10,630 8,94,297 7.68
2015 – 16 81,42,870 11,37,717 7.15
2016 - 17 93,15,857 71,30,439 1.31

2017-18 8,07,632 34,45,879 0.23

8 QUICK RATIO
7.68
7 7.15
7.07
6

1 1.31
0
0 0.23
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

03. PROPRIETARY RATIO

This is varian of debt equity ratio it measures relationship between shareholders fund
and total asset.

Proprietary Ratio = Share Holders fund / Total Assets

Year Share Holders Fund Total Assets Proprietary Ratio

2012 – 13 20,20,000 1,42,78,060 0.14
2013 – 14 60,00,000 1,22,04,854 0.49
2014 – 15 60,00,000 1,18,75,956 0.51
2015 – 16 60,00,000 1,13,35,246 0.53
2016 – 17 50,00,000 1,32,77,351 0.38
2017-18 50,00,000 1,26,78,251 0.39
 0.6
PROPERIATARY RATIO
0.5 0.53
0.51
0.49

0.4
0.38 0.39

0.3

0.2

0.14
0.1

0
2012-13 2013-14 2014-15 2015-16 2016-17 2017-2018

05. SOLVENCY RATIO

Formula:

Solvency Ratio = Total Assets / Total Liabilities

Year Total Assets Total Liabilities Solvency Ratio

2012 – 13 1,42,78,060 1,42,78,060 1:1
2013 – 14 1,22,04,854 1,22,04,854 1:1
2014 - 15 1,18,75,956 1,18,75,956 1:1
2015 – 16 1,13,35,246 1,13,35,246 1:1
2016 - 17 1,32,77,351 1,32,77,351 1:1
2017-18 1,26,78,251 1,26,78,251 1:1
 SOLEVNCY RATIO
00:00

00:00
4
00:00

00:00
3
00:00

00:00
2 4
00:00
3
00:00
1 2
00:00
1
00:00
01:01 01:01 01:01 01:01
2013-14 2014-15 2015-16 2016-17

06.FIXED ASSET TURN OVER RATIO

This ratio indicates the efficient with the firm is utilizing its investment in fixed
asset such as plant and machinery land and building etc.

Fixed Asset Turn Over Ratio = Total Sales / Total Fixed Asset

Year Total Sales Total Fixed Asset Fixed Asset Turn

(RS) (RS) Over Ratio
2012 - 13 2,20,73,929 61,31,142 3.60
2013 - 14 2,32,83,041 46,86,555 4.96
2014 - 15 2,30,39,358 38,44,929 6.00
2015 - 16 2,05,23,907 28,51,142 7.19
2016– 17 2,20,45,623 20,46,648 10.78
2017-18 2,20,45,623 11,17,686 18
 FIXED TURN OVER RATIO
20
18
18
16
14
12
Series 3
10 10.78
8
6 7.19
6
4 4.96
3.6
2
0
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

07.NET PROFIT RATIO

It is the over all measures of a firm ability to turn each rupee of sale into profit

Net profit ratio = Net Profit / Net Sales *100

Year Net Profit Net Sales Net Profit Ratio

(Rs.) (Rs.)
2012 - 13 21,93,706 2,20,73,929 9.93%
2013 - 14 19,77,173 2,32,83,041 8.49%
2014 - 15 2,19,379 2,30,39,358 0.95%
2015 - 16 1,18,411 2,05,23,907 0.58%
2016– 17 -4,81,105 2,20,45,623 -2.18%
2017-18 7,42,092 2,04,94,395 3.6%
 900.00%

800.00%

700.00%

600.00%

500.00%

400.00%
9.93%
300.00%

200.00%

100.00%

0.00%
2013-14 2014-15 2015-16 2016-17
-100.00%

08.GROSS PROFIT RATIO

The ratio express the relationship between gross profit and sale.

Gross Profit Ratio = Gross Profit / Net sales * 100

Year Gross Profit Net sales Gross Profit Ratio

(Rs.) (Rs.)
2012 - 13 43,44,739 2,20,73,929 19.68%
2013 - 14 48,88,172 2,32,83,041 21%
2014 - 15 26,85,094 2,30,39,358 11.65%
2015 - 16 22,87,000 2,05,23,907 11.14%
2016 - 17 27,56,405 2,20,45,623 12.50%

2017-18 26,22,55 2,04,94,395 12.8%

 GROSS PROFIT RATIO
900%

800%
4
700%

600%
3
500%
19.68%
400%
2 4
300%
3
200% 1 2
100% 1
0% 21.00% 11.65% 11.14% 12.50%
2013-14 2014-15 2015-16 2016-17
CHAPTER -05

THEORITICAL RELEVANCE OF TOPIC

Financial Accounting
Financial accounting is primarily concerned with recording the business transactions in
the books of accounts for the intention of presenting, final account to the management, share
holders & tax authorities, etc. It is defined as ‘The ability of recording, classifying &
summarizing in a significant manner & in terms of money, transactions & events, which are
in parts of smallest amount, of a, financial character & interpreting the results there of’.

Cost Accounting
Compared in the midst of Financial accounting ,cost accounting is a relatively fresh
development. contemporary cost accounting developed only during 19th century . In fact ,
cost accounting started as a branch of financial accounting, but is is nowadays regarded as an
accounting organism in its be the owner of precise .Cost accounting is a system of
determining the costs of products & services. It afford detailed cost in sequence to a
mixture of levels of management for proficient routine of their gathering

Cost
According to CIMA, Landon ‘cost is the quantity of outflow (actual or notional) incurred
to or attributable a certain thing’

Costing
The Chartered Institute Of Management Accountants (CIMA),Landon as term costing as,
‘The procedure & processes of ascertaining cost’.

Weldon as defines costing as ‘the appropriate allotment of outgoings and involves the
gathering of costs for all order, job, process, examination or unit’.

Cost Centre
For the rationale of ascertaining cost the entire organisation is separated into miniature
parts or sections. Each small sections is treated as a cost centre of which cost is ascertained.

Cost Unit
“Cost unit is a structure of capacity of dimensions of production or services, This piece is
generally adopted on the basis of encourage and custom in the industry concerned”

Methods of Costing
There are two methods of costing.

1. Job costing or Job order costing

 2. Process costing

1 . Job costing : This method ‘applies where occupation is undertaken to customers’

unique requirements. Cost unit in job enjoin costing is taken to be a employment or work
instruct for which cost are unconnectedly collected and computed.

2. Process Costing: As distinct commencing job costing, this manner is used in bunch
production industries manufacturing standardised products in continuous processes of
manufacturing. Costs are accumulate every one process or branch

Techniques of Costing
It is the type of industries that dealing which of the eight systems of costing discussed
above will be used in a particular scheme

1. Standard Costing
2. Budgetary costing
3. Marginal costing
4. Total absorption costing
5. Uniform costing

1. Standard costing: This is especially priceless technique of controlling cost. In this

technique, standard cost is encoded as intention of show and authentic concert is
against the standard. The differentiation among standard and actual cost are analysed
to know the reasons for the divergence so that corrective actions may well be taken.
2. Budgetary control: personally connected to standard costing is the modus
operandi of budgetary control. A financial statement is an turn of phrase of a firm’s
production sketch in financial outline and budgetary be in charge of is a technique
applied to the have power over of totality disbursement on material, wages &
overheads by comparing concrete performance with planned performance. Thus, in
totting up to its bring into play in planning, the financial statement is what's more
used for control & bringing together of business operations.
3. Marginal costing: In this technique, taking apart of costs addicted to fixed &
unpredictable (marginal) is of exceptional interest consequence. This is so since
marginal costing regards only unpredictable costs as the cost of item for burning up.
Fixed cost is treated as phase cost and no stab is made to deal out or divide up this
cost centres or cost centres, or cost unit. It is transferred to costing, profit & loss
account of the episode This procedure is used to cram the end product on profit of
changes in degree otherwise variety of yield
4. Total Absorption Costing: It is a traditional method of costing whereby
entirety costs, (fixed & variable) are charged to products. This is in inclusive disparity
to marginal costing where barely variable costs are charged to products. even
nevertheless until in recent times , this was the only technique employed by cost
accountants, but at this moment a days it is considered to have no more than limited
applications.
5. Uniform costing: This is not a take apart technique or method of costing in the
vein of standard costing or progression costing. It simply denotes a circumstances in
which a quantity of firms agree to a homogeneous position of costing principles. It
has been defined by CIMA, Landon as ‘ the use by a number of undertakings of the
equivalent costing principles & practices’. This helps to put side by side the
performance of one unchangeable with that of other firms and thus, to draw from the
promote of anyone’s well again familiarity and performance.

Classifications Of asking price

Classification is the development of grouping costs according to their customary
characteristics is a systematic situation of resembling items in performance according
to their all-purpose features.

1. Classification into Direct and Indirect costs

Costs are classified into direct costs & indirect costs on the basis of their
identifiability in the midst of cost units or jobs or processes or cost centres.

Direct cost
These are those costs which are incurred for and effortlessly identified
with a fastidious cost purpose. Cost of raw material used and wages of a
machine operative are frequent examples of direct costs.
Indirect cost
These are generally costs and are incurred for the assistance of a number
of cost objects. These costs cannot be easily identified among a fussy cost aim.
Depreciation of machinery, assurance, lighting, influence, hire managerial
salaries, materials used in repairs, etc

2. Classification into Fixed And Variable Costs

Cost behaves differently when echelon of production rises or falls. assured
costs changed in friendship with production level though other costs hang
about unchanged. As such on the basis of behaviour or unpredictability, costs
are classified into fixed, variable and semi-variable.

Fixed cost
These expenditure stay put invariable in ‘total’ amount greater than a
specific assortment of activity for a specified theatre of time, i.e., individuals
do not enlarge or decline when the degree of production changes. For
example, building rent, and managerial salaries hang about invariable and
carry out not change with transform in productivity level and thus are fixed
costs
 Variable cost
These cost tend to be changed in direct fraction to the dimensions of
output. In other words, when volume , of output increases, total variables cost
what's more increases and vice versa, when volume of yield decreases, total
variable cost also decreases ,but the up-and-down cost per unit remains preset

Semi-variable cost or Semi-fixed cost(mixed cost)

These costs take account of both a fixed and a unpredictable element i.e.
these are somewhat fixed and partly up-and-down A semi-variable cost has a
fixed cost element which needs to be incurred irrespective of the echelon of
activity achieved.

3. Classification into Committed and Discretionary costs

It is explained beyond that costs may classified into fixed variable. Fixed costs
are supplementary classified into committed costs and unrestricted (or
programmed) costs. this classification is based on the measure to which a firm
is locked addicted to an asset or service that is generating the fixed cost
Committed costs
These are those costs that are incurred in maintaining substantial
facilities and administrative set up. Such costs are committed in the wisdom
that once the judgment to deserve them has been made, they are obligatory and
invariant in diminutive run.
Discretionary cost
These are those cost which can, be avoided by management decisions.
Such costs are mot permanent. Advertising, examine and maturity cost and
salaries of low echelon managers are examples of discretionary costs because
these cost may be avoided or reduced in the petite run, if so desired by the
management.
4. Classified into Product cost and Period cost

Product cost
These cost include all such expenditure that are involved in acquiring or
making a item for consumption For a trader, product cost includes procure
cost plus freight inwards. For a manufacturer, these consist of direct material,
direct labour and industrial unit overheads.
Period cost
These are persons costs which are not obligatory for production and
are incurred smooth if there is no production. These are written off as
expenses in the phase in which these are incurred. such costs are incurred for a
time phase and are charged to the profit & loss account of the phase
Advantages of cost accounting
The deficiencies of financial accounting may be re-started as the advantages of
cost accounting since the latter while emerged on the road to over come the
limitations of the previous.

Advantages to Management

1.Reveals profitable and unprofitable activities

A structure of cost accounting revels profitable and not making money
activities. On this information mgt may take steps towards reduce or eliminate
surplus and in efficiencies occurring in form, such as unoccupied time, under
utilisation of plant competence and spoilage of materials.
2.Helps in cost control
Cost accounting helps in controlling costs by way of singular techniques,
resembling standard costing & budgetary be in command of
3.helps in decision making
It supplies fit cost figures & other related information for managerial
decision making, such as preamble of a new product line, alternative of mature
machinery with an automatic plant, make or obtain
4.Guides in fixing selling price
Cost is one of the most imperative factors to be considered while fixing
prices. A system of cost accounting guides, the mgt in the complex of selling
prices, particularly during a hopelessness phase when prices may have to be
fixed lower than cost.

5. Helps inventory control

unending inventory system which is an elementary part of cost accounting,
helps in the preparation of interim profit & loss account. Other inventory
control techniques like ABC analysis, level setting etc. Are also used in cost
book-keeping

Advantages to workers

Workers are benefited by beginning incentives plans which are an

fundamental part of a cost system. This results not only in higher productivity but also
elevated earnings for them.

Advantages to society

An competent cost system is jump to subordinate the cost of production, the

assistance of which is passed on the communal by the side of bulky in the form of lower
prices of product or services.

Advantages to Government agencies

 A cost system produces full figures for use by government earnings committees
chambers of barter and industry transfer unions etc for effect in problems like charge fixing
income level swindling decision of industrial disputes course of action matters etc.

Limitations or objectives against cost accounting

Disputes the fact that the progress of cost accounting is one of the largely significant steps
to recover routine confident objections are raised adjacent to its introductions. These are as
follows

1. It is unnecessary
It is argued that safeguarding of cost records is not necessary & involves doubling-
ups of work. It is based on the premises that first-rate number of concerns are
functioning prosperously lacking any system of costing.
2. It is expensive

It is pointed not in that installation of a costing system is moderately expensive which

on large concerns can afford. It is also argued that installation of the coordination will
involve supplementary outflow which will pilot to a attenuation of turnover

3. It is inapplicable
Another dispute sometimes out familiar is that modern methods of costing are not
applicable to many types of industry. This plea is hardly tumble, given the
complexities of operating whichever enterprise today.
4. It is failure
The failure of costing system in some concerns is quoted as an disagreement
against its production in previous undertakings. This is a very deceptive argument.

Essential of a good cost accounting

The essential principles of a good system of cost accounting are as follows:

1. Suitability
The system of costing adopted i, e. Job or process costing should be proper to the
industry & give out the objectives in installing system.

2. Specially designed system

A ready-to-wear costing system cannot be apposite for every business. The cost
accounting system should be tailor-made according to constraint of a business.

3. Support of executives
If a costing system is to be doing well it must be fully supported by executives of
various departments & each person should participate it.
4. Cost of the system
The cost of installing and operating the system should be justified by the results
produced.

5. Clearly defined cost centres

In order to derive greatest benefits from a costing system well defined cost centres &
responsibilities centres should be identified surrounded by the organisations.

6. Controllable costs
Controllable and non-controllable costs of both responsibility centres should be
separately shown.

7. Integration with financial accounts

There should be assistance and coordination among cost accounting & financial
accounting departments. In order to pass up duplication of accounts, cost and financial
accounts may be combination

8. Continuous education
Well trained educated workforce should be employed to operate the system. In order
to educate the costing team printed manuals and meetings, etc. Should be arranged on a
continuous basis

9. Prompt and accurate reports

The cost accounting department should set up accurate reports & quickly agree to
the same to correct level of management so that accomplishment may be taken without
stoppage

10. Avoid unnecessary details

Resources should not be wasted on collecting and compiling cost data that is not
required. barely useful cost in sequence should be complied & used whenever you like
required.

C HAPTER – 4
 ANALYSIS AND INTERPRETATION

TABLE 1 : TABLE SHOWING WAGES COST VARIANCE

Year 2013-14 2014-15 2015-16 2016-17 2017-18

Standard 4,000,000 4,400,000 4,200,000 4,500,000 4,600,000

Actual 3,968,129 4,498,759 4,108,767 4,523,965 4,512,798

Variance 31,871 -98,759 91,233 -23,965 87202

*Variance in 0.80% -2.24% 2.17% -0.53% 1.89%

(%)

(A) GRAPH SHOWING WAGES COST VARIANCE

5,000,000

4,000,000

3,000,000

stndard
2,000,000 actual
variance

1,000,000

0
2013-14 2014-15 2015-16 2016-17 2017-18

-1,000,000
 GRAPH (b): GRAPH SHOWING WAGES COST VARIANCE IN (%)

2.50%

2.00%

1.50%

1.00%

0.50%

0.00% Column2
2013-14 2014-15 2015-16 2016-17 2017-18
-0.50%

-1.00%

-1.50%

-2.00%

-2.50%

The on top of table and graphs shows that the wages cost variance from the year 2013-14 to
2017-18. The graph (A) is wages cost variance (in numbers) and the graph (B) is wages cost
variance in percentage (%). In the year 2013-14, 2015-16 and 2017-18 it was a favourable
variance of 0.80%, 2.17% and 1.89% respectively because standard cost more than the actual
cost so is favourable variance. In the year 2014-15 and 2016-17 is unfavourable variance
-2.24% and – 0.53% respectively because actual cost is less than the standard cost.

TABLE 2 : TABLE SHOWING PURCHASE COST VARIANCE

Year 2013-14 2014-15 2015-16 2016-17 2017-18

Standard 11,000,000 11,000,00 11,000,000 12,000,000 12,000,000

Actual 9,793,786 12,139,480 8,984,720 11,004,891 85,46,730

Variance 1,206,214 -1,139,480 2,015,280 995,109 34,53,270

 Variance in 10.96% -10.36 18.32% 11.31% 28.77%
(%)

GRAPH (A): GRAPH SHOWING PURCHASE COST VARIANCE

14,000,000

12,000,000

10,000,000

8,000,000
stanadard
6,000,000 actual
variance
4,000,000

2,000,000

0
2013-14 2014-15 2015-16 2016-17 2017-18
-2,000,000

GRAPH (B): GRAPH SHOWING PURCHASE COST VARIANCE (in %)

35.00%

30.00%

25.00%

20.00%

15.00%

10.00% Column2

5.00%

0.00%
2013-14 2014-15 2015-16 2016-17 2017-18
-5.00%

-10.00%

-15.00%

From the over graph and stand it is shows that acquire cost variance. The graph (A) is
purchase cost variance in numbers and the graph (B) is purchase cost variance in percentage.
In the year 2014-15 that is -10.36, is the unfavourable variance because actual cost more than
the standard cost. And in the year 2013-14, 2015-16, 2016-17and 2017-18 is 10.96%,
18.32%, 11.31% and 28.77% respectively there is all favourable variance because standard
cost is more than the actual cost.

TABLE 3 : TABLE SHOWING FACTORY MAINTENANCE COST VARIANCE

Year 2013-14 2014-15 2015-16 2016-17 2017-18

Standard 6,50,000 6,50,000 6,50,000 6,50,000 6,50,000

Actual 93,156 78,272 1,42,950 2,17,669 1,91,896

Variance 5,56,844 5.71.728 5,07,050 4,32,331 4,58,104

Variance (in 85.66% 87.95% 78.00% 66.51% 70.47%

%)

GRAPH (A): GRAPH SHOWING FACTORY MANINTENANCE COST VARIANCE

700,000

600,000

500,000

400,000
STANDARD
ACTUAL
300,000 VARIANCE

200,000

100,000

0
2013-14 2014-15 2015-16 2016-17 2017-18
GRAPH (B): GRAPH SHOWING FACTORY MAINTAINCE COST VARIANCE IN
(%)

100.00%

90.00%

80.00%

70.00%

60.00%

50.00%
Column2
40.00%

30.00%

20.00%

10.00%

0.00%
2013-14 2014-15 2015-16 2016-17 2017-18

The above table and graph shows that the factory maintenance variance. In the year 2013-14
the variance is 85.66%, in the year 2014-15 is 87.95%, in the year 2015-16 is 78.00%, in the
year 2016-17 is 66.51%, and in the year 2017-18 is 70.47%. It indicates that factory
maintenance cost is decreased compare to the year 2013-14 to 2017-18 but there is no
unfavourable in any year since 2013-14.

TABLE 5: TABLE SHOWING FUEL COST VARIANCE

Year 2013-14 2014-15 2015-16 2016-17 2017-18

Standard 2,50,000 2,50,000 2,50,000 2,50,000 2,50,000

Actual 1,05,937 99,856 89,956 1,94,030 1,55,030

Variance 1,44,063 1,50,414 1,60,044 55,970 94,970

Variance (in 57.62 60.16 64.01 22.39 37.98
%)

GRAPH (A): GRAPH SHOWING FUEL COST VARIANCE: (Amt)

300,000

250,000

200,000

STANDARD
150,000
ACTUAL
VARIANCE
100,000

50,000

0
2013-14 2014-15 2015-16 2016-17 2017-18

GRAPH (B): GRAPH SHOWING FUEL COST VARIANCE (IN %)

 70.00%

60.00%

50.00%

40.00%

Column2
30.00%

20.00%

10.00%

0.00%
2013-14 2014-15 2015-16 2016-17 2017-18

The above table and graph shows that the fuel cost variance and in the above years 2013-14
to 2017-18 there is all are favourable variance because actual cost less than the standard cost.
And 2013-14 fuel cost variance is 57.52%, 2014 -15 and 2015-16 increase the fuel cost
60.16%and 64.01% respectively. 2016-17 is slightly decreased 22.39% and again 2017-18 is
increase the variance 37.98%.

TABLE 6 : TABLE SHOWING (FACTORY OVER HEAD COST VARIANCE

RENT COST VARIANCE

Year 2013-14 2014-15 2015-16 2016-17 2017-18

Standard 2,30,000 2,30,000 2,30,000 2,30,000 2,30,000

Actual 1,18,800 1,80,000 1,80,000 1,80,000 1,80,000

Variance 1,12,000 50,000 50,000 50,000 50,000

Variance (in %) 48.69 21.74 21.74 21.74 21.74

 GRAPH (A): GRAPH RENT COST VARIANCE (FACTORY OVERHEAD) (Amt)

250,000

200,000

150,000
STANDARD
ACTUAL
100,000 VARIANCE

50,000

0
2013-14 2014-15 2015-16 2016-17 2017-18

GRAPH (B): GRAPH SHOWING RENT COST VARIANCE (FACTORY

OVERHEAD) (IN %)

60.00%

50.00%

40.00%

30.00%
Column2

20.00%

10.00%

0.00%
2013-14 2014-15 2015-16 2016-17 2017-18

The above table and graph shows that the rent cost variance. The graph (A) shows that rent
cost variance in values and the graph (B) shows that the rent cost variance in percentage. In
the year 2014-15 to 2017-18 no changes in the rent paid because the same variance shown
and 2013-14 is changes in rent paid 48.69% is variance. And all are favourable variance
because actual cost less than the standard cost.
 TABLE 7: TABLE SHOWS THAT FIRE WOOD COST VARIANCE

Year 2013-14 2014-15 2015-16 2016-17 2017-18

Standard 10,50,000 10,00,000 11,00,000 12,00,000 10,00,000

Actual 10,14,992 9,20,890 10,76,211 11,75,762 9,09,530

Variance 35,008 79,110 23,789 24,232 90,470

Variance (in 3.33 7.91 2.16 2.02 9.05

%)

GRAPH (A): GRAPH SHOWING FIRE WOOD COST VARIANCE

1,400,000

1,200,000

1,000,000

800,000
STANDFARD
ACTUAL
600,000 VARIANCE

400,000

200,000

0
2013-14 2014-15 2015-16 2016-17 2017-18

GRAPH (B): GRAPH SHOWING FIREWOOD COST VARIANCE (IN %)

 10.00%

9.00%

8.00%

7.00%

6.00%

5.00%
Column2
4.00%

3.00%

2.00%

1.00%

0.00%
2013-14 2014-15 2015-16 2016-17 2017-18

The above table and graph shows that firewood cost variance. And graph (A) is shows that
firewood cost variance in amount and graph (B) is shows that firewood cost variance (IN %).
In this table shows no unfavourable variance cost because the actual cost less than the
standard cost. The variance of 2013-14 is 3.33%, 2014-15 is 7.91%, 2015-16 is 2.16%, 2016-
17 is 2.02% and 2017-18 is 9.05%.

TABLE 8: TABLE SHOWINGH REPAIR AND MAINTAINCE COST VARIANCE

Year 2013-14 2014-15 2015-16 2016-17 2017-18

Standard 4,80,000 4,80,000 4,80,000 4,80,000 4,80,000

Actual 6,63,210 2,40,727 2,33,593 1,07,070 2,55,672

Variance -1,83,210 2,39,273 2,46,407 3,72,930 2,24,328

Variance (IN %) -38.17 49.85 51.34 77.69 46.73

GRAPH (A): GRAPH SHOWSING REPAIR AND MAINTAINANCE COST
VARIANCE

800,000

600,000

400,000

STANDARD
200,000 ACTUAL
VARIANCE

0
2014-14 2014-15 2015-16 2016-17 2017-18

-200,000

-400,000

GRAPH (B): GRAPH SHOWING REPAIR AND MAINTAINENANCE COST

VARIANCE (IN %)

100.00%

80.00%

60.00%

40.00%

20.00% Column2

0.00%
2013-14 2014-15 2015-16 2016-17 2017-18
-20.00%

-40.00%

-60.00%

The above table and graph sows that repair and maintenance cost variance. The graph (A)
sows that repair and maintenance cost variance in value and graph (B) shows that percentage.
In the year 2013-14 is -38.17% is unfavourable variance because actual cost more than the
standard cost and 2014-15 to 2017-18 is all favourable variance is 49.85%, 51.34%, 77.69%
and 46.73% respectively ,because standard cost is more than the actual cost.
 TABLE 9: TABLE SHOWING CONVEYANCE COST VARIANCE

Year 2013-14 2014-15 2015-16 2016-17 2017-18

standard 1,90,000 1,90,000 1,90,000 1,90,000 1,90,000

Actual 1,88,967 77,554 59,890 44,970 1,27,465

Variance 1,033 1,12,446 1,30,110 1,45,030 62,535

Variance (IN %) 0.54 59.18 68.48 76.33 32.91

GRAPH (A): GRAPH SHOWING CONVEYANCE COST VARIANCE (IN AMT)

200,000

180,000

160,000

140,000

120,000
STANDARD
100,000
ACTUAL
80,000 VARIANCE

60,000

40,000

20,000

0
2013-14 2014-15 2015-16 2016-17 2017-18
 GRAPH (B): GRAPH SHOWING CONVEYANVE COST VARIANCE (In %)

90.00%

80.00%

70.00%

60.00%

50.00%
Column2
40.00%

30.00%

20.00%

10.00%

0.00%
2013-14 2014-15 2015-16 2016-17 2017-18

The above table and graph shows that conveyance cost variance. In the year 2013-14 to
2017-18 is there is no unfavourable variance because actual cost less than the standard cost.
In the year 2013-14 is 0.54% and low percentage of variance and in the year 2016-17 is
76.33% is higher percentage variance in the year and 2014-15, 2015-16 and 2017-18 is
59.18%, 68.48% and 32.92% respectively.

TABLE 10: TABLE SHOWS PRINTING AND STATIONERY COST VARIANCE

Year 2013-14 2014-15 2015-16 2016-17 2017-18

Standard 50,000 50,000 50,000 50,000 50,000

Actual 22,984 16,439 27,162 25,972 31,974

Variance 27,016 33,561 22,838 24,028 18,026

Variance (IN %) 54.03 67.12 45.67 48.06 36.05

 GRAPH (A): GRAPH SHOWING PRINTING AND STATIONERY COST
VARIANCE

60,000

50,000

40,000

STANDARD
30,000
ACTUAL
VARIANCE
20,000

10,000

0
2013-14 2014-15 2015-16 2016-17 2017-18

GRAPH (B): GRAPH SHOWING PRINTING AND STATIONERY COST

VARIANCE (in %)

80.00%

70.00%

60.00%

50.00%

40.00%
Column2

30.00%

20.00%

10.00%

0.00%
2013-14 2014-15 2015-16 2016-17 2017-18

From the above table and graph shows that printing and stationery cost variance. There is all
favourable variance in this cost because every year (2013-14 to 2017-18) standard cost more
than the actual cost of printing stationery cost.
 TABEL 11: TABLE SHOWS THAT COMPUTER MAINTENANCE COST
VARIANCE

Year 2013-14 2014-15 2015-16 2016-17 2017-18

Standard 25,000 25,000 25,000 25,000 30,000

Actual 8,242 13,288 7,583 20,829 42,626

Variance 16,578 11,712 17,417 4,171 12,626

Variance (IN 67.03 46.85 69.67 16.68 -42.08

%)

GRAPH (A): GRAPH SHOWING COMPUTER MAINTANENCE COST VARIANCE

(IN AMT)

45,000

40,000

35,000

30,000

25,000
STANDARD ACTUAL VARIANCE
Series 2
20,000
Series 3
15,000

10,000

5,000

0
2013-14 2014-15 2015-16 2016-17 2017-18
 GRAPH (B): GRAPH SHOWING COMPUTER MAINENANCE COST VARIANCE
(IN %)
500.00%

0.00%
2013-14 2014-15 2015-16 2016-17 2017-18
-500.00%

-1000.00%

-1500.00%

-2000.00% Column2

-2500.00%

-3000.00%

-3500.00%

-4000.00%

-4500.00%

From the above table and graph shows that the computer maintenance cost variance. There is
no unfavourable variance from the year 2013-14 to 2017-18 because the standard cost is more
than the actual cost. Variance is more in the year 2015-16 and low in case of2017-18, it tells
that the variance is falling year by year. The cost of computer maintenance is variable from
year to year since actual cost varies all year and computer maintenance cost is not a fixed cost
it is variable cost.

TABLE 12: TABLE SHOWING TRANSPORT COST VARIANCE (SELLING AND

DISTRIBUTION OVER HEAD)

Year 2013-14 2014-15 2015-16 2016-17 2017-18

Standard 8,50,000 9,00,000 8,00,000 10,50,000 10,50,000

Actual 8,34,310 8,87,941 6,78,670 10,06,726 10,42,171

Variance 15,690 12,059 1,21,330 43,274 7,829

Variance (IN %) 1.85 1.34 15.17 4.12 0.74

 GRAPH (A): GRAPH SHOWING TRANSPORT COST VARIANCE (Amt)

1,200,000

1,000,000

800,000

STANDARD
600,000
ACTUAL
VARIANCE
400,000

200,000

0
2013-14 2014-15 2015-16 2016-17 2017-18

GRAPH (B): GRAPH SHOWING TRANSPORT COST VARIANCE (IN %)

16.00%

14.00%

12.00%

10.00%

8.00%
Column2

6.00%

4.00%

2.00%

0.00%
2013-14 2014-15 2015-16 2016-17 2017-18

From the above table and graphs shows that the transport cost variance which is in
favourable variance condition because in the year 2013-14 the transport cost percentage is
1.85% and it is decreased in the year 2014-15 to1.34% and in the year 2015-16 it is rapidly
increased to 15.17% and 2016-17 it is decreased 4.12% and 2017-18 is also decreased to
0.74%.
 TABLE 13: TABLE SHOWING SALES COST VARIANCE

Year 2013-14 2014-15 2015-16 2016-17 2017-18

Standard 2,50,00,000 2,50,00,000 2,50,00,000 2,50,00,000 2,50,00,000

Actual 2,32,83,041 2,30,39,358 2,05,23,907 2,20,45,623 2,04,94,395

Variance 17,16,959 19,60,642 44,76,093 29,54,377 45,05,605

Variance (IN %) 6.87 7.84 17.90 11.82 18.02

GRAPH (A): GRAPH SHOWING SALE COST VARIANCE (Amt)

30,000,000

25,000,000

20,000,000

STANDARD
15,000,000
ACTUAL
VARIANCE
10,000,000

5,000,000

0
2013-14 2014-15 2015-16 2016-17 2017-18
 GRAPH (B): GRAPH SHOWING SALES COST VARIANCE (IN%)

20.00%

18.00%

16.00%

14.00%

12.00%

10.00%
Column2
8.00%

6.00%

4.00%

2.00%

0.00%
2013-14 2014-15 2015-16 2016-17 2017-18

The above table and graph shows that the sales cost variance which is favourable variance.
In the year 2013-14 the variance is at 6.87%, in the year 2014-15 is 7.84% , in the year 2015-
16 is 17.90%, in the year 2016-17 is 11.82% and 2017-18 is 18.02%. in the year 2017-18 is
the sales cost variance is higher and in the year 2013-14 the sales cost variance is lower. And
it is say that the sales cost variance is fluctuating in the trend. It variance according to the
variations happened in the actual cost.

TABLE 14: TABLE SHOWING PROFIT VOLUEM RATIO:

year sales Variable cost P/v Ratio

2013-14 2,32,83,041 82,43,302 64.59%

2014-15 2,30,39,358 90,08,624 60.90%

2015-16 2,05,23,907 78,13,585 61.93%

2016-17 2,20,45,623 94,75,124 57.02%

 2017-18 2,04,94,395 78,76,449 61.56%

GRAPH 20: GARAPH SHOWING PROFIT VOLUEM RATIO

66.00%

64.00%

62.00%

60.00%

Column2
58.00%

56.00%

54.00%

52.00%
2013-14 2014-15 2015-16 2016-17 2017-18

From the above table and graphs shows that the profit volume ratio in the year 2013-14 is
64.59%, in the year 2014-15 is 60.90%, in the year 2015-16 is 61.93%, 2016-17 is 57.02%
and 2017-18 is 61.56%. In the year 2013-14 to 2016-17 is decreased year by year and 2017-
18 is increase the profit volume ratio because decrease in variable cost.

TABLE 15 : TABLE SHOWING BREAK EVEN POINT IN SALES (Amt in Rs)

Year Fixed cost P/V Ratio BEP in Sales

2013-14 4,94,254 64.59% 7,65,217.53

2014-15 4,94,254 60.90% 8,11,582.92

2015-16 4,94,254 61.93% 7,98,084.93

 2016-17 4,94,254 57.02% 8,66,808.14

2017-18 4,94,254 61.56% 8,02,881.74

GRAPH 21: GRAPH SHOWING BREAK EVEN POINT SALES

880,000

860,000

840,000

820,000

800,000
Column2
780,000

760,000

740,000

720,000

700,000
2013-14 2014-15 2015-16 2016-17 2017-18

From the above table that the breakeven point in sales from the year 2013-14 to 2017-18. In
the year 2013-14 is Rs. 7, 65,217.53, 2014-15 is Rs. 8, 11,582, in the year 2015-16 is
7,98,084, in the year 2016-17 is 8,66,808 and 2017-18 is 8,02,881.
 CHAPTER-5

FINDINGS, SUGGESTION AND CONCLUSION

FINDINGS:-

a. The direct material price variance is good in the year 0f 2013-14 and very poor in the
year 2015-16 and other year some variable .
b. In the year 2014-15 was the direct material usage variance is more because problem in
the production and other all year is some variance to usage.
c. The direct labour efficiency variance is unfavourable due to increase in slow
destruction rate in the firm and also though highest labour rate per hour.
d. The sales cost in the year 2016-17 is better to previous year 2015-16 but in the 2017-
18 is decrease in the sales.
e. The profit volume ratio is decrease in the previous year 2016-17 but 2017-18 is
slightly increases because variable cost is decrease.
f. In the transport cost is year to year is increased because changes in natural oils rate
and road taxes.
g. There is no much change in factory overhead cost variance during last four years of
study.
h. The domestic sales are increased in every year.
i. Actual factory maintenance cost is increase consistently till 2015-16 later decreased in
the year 2016-17 but again increased in the 2017-18.

SUGGESTIONS:

a. The direct material usage variance will raise mechanically with enlarge in production,
so suitable care should be taken to verify the cost of the material.
b. Material disagreement caused by difference in the rate, quality of material, it is
recommended that the raw material should be standardized.
c. Timely check up of tools at numerous intervals is recommended, to keep tackle in
excellent working conditions.
 d. To progress the effectiveness of working of the firm they need to hire skilled people.
e. At the time of manufacturing Global Boards require to minimize the making of excess
in holder of PCPB raw materials.
f. As there is more deliberate destruction rate in the firm, the cost of labour is increasing
which is to be taken care.
g. The company also should concentrate on the direct labour effectiveness for a
recovered productivity.

CONCLUSION:

 Today cost accounting is considered to be an essential contrivance for enhancement

Costing techniques replaying an important task in maintain the board in decision
making. The study of the costing system at Global Boards Pvt Ltd has made known
some most important deficiency in the costing method, one of the major crisis faced is
on the bases for allotment of overheads and data obedience not being followed by the
construction area. Most of them, during the through individual interviews conducted,
shared observation point that the costing system has been standardized. But only a
few issues have to acquire in hand to, which has been causing crisis in resolve the
exact production.

From the above digest of result it is understandable that variance pertaining to mainly of the
expenses shows approving variance. The firm was capable to limit their expenditure to with
the standard number even while the firm is practical grow. Many reasons pilot to favourable
variances but it was guidelines of cost control that ensured that no compulsory or additional
escape was incurred.

Some expenses showed unfavourable variance. This variance unavoidable expenses which
had to be incurred by the firm. Even while the variance be balanced by the huge majority of
favourable variances
 ANNEXURE

FINANCIAL STAMENT

TRADING & PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED
31/03/2014

PARTICULORS AMOUNT (RS) PARTICULORS AMOUNT(RS)

To opening stock By sales 2,32,83,041

Raw material 1,79,303
Semi –finished 1,32,257 By closing stock
Finished goods 2,32,879 Raw material 2,03,117
To purchases 97,93,786 Semi-finished 1,63,459
To Direct Expenses (as per
schedule) 93,22,859

To GROSS PROFIT C/D 48,88,172

2,36,49,707 2,36,49,707
Bank interest 2,52,043 GROSS PROFIT B/D 48,88,172
Bank debts 1,70,052 Indirect income 80,409
Bank charges 47,055
Miscellaneous expenses 19,321
Conveyance 1,88,967
Donation 9,000
Entertainment Expenses 28,592
EST 1,64,842
Fuel cost 1,05,937
Factory maintain cost 93,156
Fire wood cost 10,14,992
Insurance 44,001
Professional Tax 4,000
Professional fees 36,865
Postage and Telegram 17,252
Pooja expenses 25,336
Printing and stationery 22,984
Computer maintenance 8242
Repairs & maintainance 6,63,210
Rent cost 1,18,800
Telephone Charges 24,593
Travelling expenses 5000
Transportation charges 8,34,310
Depreciation 10,01,272
Other Expenses 9,22,923

Net profit 19,72,172

TOTAL 49,68,581 TOTAL 49,68,581

 TRADING & PROFIT AND LOSS A/C FOR THE YEAR ENDED
31/3/2015

PARTICULORS AMOUNT PARTICULORS AMOUNT

(RS) (RS)

To opening stock By sales 2,30,39,358

Raw material 2,03,117
Semi-finished 1,43,249 By closing stock
Finished goods 20,300 Raw material 5,95,770
Semi-finished 5,64,737
To purchases (as per 1,21,39,480
schedule)

To Direct Expenses 90,08,624

TO GROSS PROFIT C/D 26,85,094

2,41,99,865 2,41,99,865
Bank interest 2,03,785 TO GROSS PROFIT B/D 26,85,094
Bank debts 33,936 Indirect Income received 12,353
Bank charges 13,622
Miscellaneous Expenses 12,855
Conveyance 77,554
Donation 4,500
Entertainment Expenses 1,300
EST 1,82,805
Fuel cost 99,856
Factory maintain cost 78,272
Fire wood cost 9,20,890
Professional fees 4,000
Postage and Telegram 29,000
Pooja expenses 13,570
Printing and stationery 27,627
Rent cost 1,80,000
Computer maintenance 16,439
Repairs & maintainance 240727
Telephone Charges 13,288
Travelling expenses 19,072
Transportation charges 8,87,941
Depreciation 10,11,578
Other expenses 7,41,498

Net profit 2,91,379

TOTAL 26,97,447 TOTAL 26,97,447

 TRADING & PROFIT AND LOSS A/C FOR THE YEAR ENDED
31/3/2016

PARTICULORS AMOUNT PARTICULORS AMOUNT

(RS) (RS)

To opening stock By sales 2,05,23,907

Raw material 5,95,770
Semi – finished 5,64,737 To closing stock
Raw material 1,87,554
To purchases (as per schedule) 84,89,720 Semi – finished 1,55,680

To Direct Expenses 84,32,914

TO GROSS PROFIT C/D 22,87,000

2,08,65,141 2,08,65,141
Bank interest 56,602 BY GROSS PROFIT B/D 22,87,000
Bank debts 9,864
Bank charges 12,526 By indirect income 7929
Miscellaneous Expenses 813
Conveyance 59,890
Donation 4,500
Entertainment Expenses 3,080
ESI 1,82,494
Fuel cost 89,956
Factory maintain cost 1,42,950
Fire wood cost 10,76,211
Insurance 4,000
Professional Tax 26,500
Professional Fees 20,773
Postage and Telegram 31,365
Pooja Expenses 27,162
Printing and stationery 7,583
Computer maintenance
Repairs & maintainace 13,777
Rent 1,80,000
Telephone charges 6,78,670
Travelling charges 10,21,435
Transportation charges 6,63,109
Depreciation
Other Expenses 1,18,411

Net profit

TOTAL 22,94,929 TOTAL 22,94,929

TRADING & PROFIT AND LOSS A/C FOR THE YEAR ENDED
31/3/2017

PARTICULORS AMOUNT PARTICULORS AMOUNT

(RS) (RS)

To opening stock By sale 2,20,45,623

Raw material 1,85,554
Semi finished 1,55,680 To closing stock
Raw material 11,13,790
To purchases (as per schedule) 1,10,04,891 Semi finished 5,51,055

To Direct expenses 96,07,938

TO GROSS PROFIT C/D 27,56,405

 2,37,10,468 2,37,10,468
Audit Fess 41,300 BY GROSS PROFIT B/D 27,56,405
Other interest 40,519
Bank charges 38,461
Certification charges 11,500
Computer maintenance 20,829
Conveyance 44,970
Donation 65,000
Entertainment expenses 16,625
Entry tax 14,188
ESI 1,74,714
Fuel cost 1,94,030
Factory maintain cost 2,17,669
Fire wood cost 11,75,762
Gratuity for employee 19,962
Kandaya 1,15,800
PF (employee cont.) 3,97,273
PF admin charges 51,667
Professional Tax 4,000
Professional Fees 33,000
Postage and Telegram 19,247
Pooja expenses 25,850
Printing and Stationery 25,972
Telephone charges 1,80,000
Transportation charges 7,466
Repair and maintenance 10,06,726
Miscellaneous expenses 1,07,070
Insurance 7,403
Loan proceesing fees 2,25,115
Interst on term loan 73,186
Service tax paid 5,47,060 BY NET LOSS C/D 4,81,105
Depreciation 82,622
10,26,711
 TOTAL 32,37,510 TOTAL 32,37,510

TRADING & PROFIT AND LOSS A/C FOR THE YEAR ENDED
31/3/2018

PARTICULORS AMOUNT PARTICULORS AMOUNT

(RS) (RS)

To opening stock By sales 2,04,94,395

Raw material 11,13,790
Semi finished 5,51,055 By closing stock
Raw material 4,28,061
To purchases (as per 85,46,730 Semi finished 2,19,278
schedule) Finished goods 2,10,798

To Direct expenses (as per 85,18,400

schedule)

TO GROSS PROFIT C/D 26,22,555

2,13,52,531 2,13,52,531

Audit fees 35,000 BY GROSS PROFIT B/D 26,22,555

Bank charges 2,726
Bad debts 2,82,635 By excess provision written
Commission 34,000 off 1,800
Computer maintenance 42,626 By other interest receivable 1,005
Conveyance 1,27,465 By sundry creditors written
Donation 51,100 off 1,539
Discount allowed 4,430
Entry Tax 372
ESI 1,74,737
Fuel cost 1,55,030
Factory maintain cost 1,91,896
Gratuity for employee 2,25,912
PF (employee cont.) 4,18,170
PF admin charges 33,715
Professional fees 14,500
Postage and Telegram 13,604
Pooja expenses 39,800
Printing and stationery 31,974
Reapirs & maintaince 2,55,672
Telephone charges 10,247
Transportation charges 10,42,171
Miscellaneous expenses 5,742
Interest on Excise 897
Interest on TDS 6,543
Interest on term loan 7,77,546
Depreciation 10,35,249

TOTAL 33,68,992 TOTAL 33,68,992

 BALANCESHEET FOR THE YEAR ENDED 31ST MARCH.....

PARTICULORS 2018 2017 2016 2015 2014

Liabilities
Capital Account 50,00,000 50,00,000 60,00,000 60,00,000 60,00,000
Current Account (24,72,674) 3,46,393 36,27,279 47,13,230 47,90,450
Unsecured loan 4,70,000 2,10,000 5,70,250 50,000 1,50,000
Secured loan 57,75,356 61,46,912

Current Liabilities
Sundry creditor 34,45,879 8,50,433 4,65,414 6,88,550 5,49,540

Deferred tax liability 30,157 2,05,748 3,49,640

Provisions 4,59,690 7,23,613 6,42,146 5,18,248 3,65,224
TOTAL 1,26,78,251 1,32,77,351 1,13,35,246 1,18,75,596 1,22,04,854

Assets:
Fixed assets 11,17,686 20,46,648 28,51,142 38,44,929 46,86,555
Current Assets
Loans and advances 3,16,203 2,07,901
Deferred Tax Asset 3,68,715 1,63,416
Deposits (KEB) 4,16,293 4,16,293 4,16,293 4,16,293 4,16,293
Sundry debtor 79,43,544 82,83,856 72,86,164 60,82,411 65,53,773
TCS 453 2,511
Closing stock 8,58,136 16,67,989 3,41,234 11,60,507 3,66,666
Advance for
expenses 9,80,850 2,50,000 64039 59,890 50,000
Duties and taxes 1,31,565 17,736 17362 12,548 65,147

Bank Accounts
Karnataka bank 64 64 64 64 64
SBI current A/c 2,45,156 1,32,721 1,01,748 15,451 56,040
Cash in hand 3,00,039 90,727 2,57,200 2,83,410 7,805

TOTAL 1,26,78,251 1,32,77,351 1,13,35,246 1,18,75,956 1,22,04,854