LOVELY PROFESSIONAL UNIVERSITY

Mittal School of Business

Faculty of Business and Arts

Course Code: ACC205 Course Title: Cost Accounting

Course Instructor: Preeti Kumari Section: Q2013

Academic Task No: 01 Academic Task Title: HIL

Date of Allotment: 07.09.2021 Date of Submission: 15.09.2021

Student Roll No: RQ2013B45 Student Reg. No: 12011403

Max. Marks: 30 Marks. Obtained:

 HIL: Hyderabad Industries Limited

Established in 1946, HIL Limited is a flagship

company of the $2.4 Billion conglomerate, CK Birla
Group. The company offers comprehensive building
materials and solutions for 70+ years and has achieved
market leadership by developing and marketing the
most sustainable and relevant products which are
future-ready, high quality, and have innovation at its
core.

Vision:

“To be a leading, global, innovative, and eco-friendly building and infrastructure solutions
company and create sustainable value for our stakeholders.”

Mission:

➢ To deliver a diversified portfolio of eco-friendly products and solutions, fueled by

innovation.

➢ To build a strong corporate brand present across all continents.

➢ To digitalize processes, end-to-end, for business excellence.

➢ To be a diverse workplace that is a preferred employer while continuing to meet our

highest standards of quality, corporate social responsibility, safety, health and
environment.

Business:

World’s largest manufacturer and seller of fibre cement roofing, walling, polymer solution-
pipes & putty, flooring solution and offering comprehensive building solutions.

HIL has 5 major brands- Charminar, Birla Aerocon, Charminar Fortune, Birla HIL, and
recently acquired German flooring brand, Parador.
Board of Directors:
Name Designation

Arvind Sahay Independent Director

C K Birla Chairman

Desh Deepak Khetrapal Non-Executive Director

Dhirup Roy Choudhary Managing Director & CEO

Gauri Rasgotra Independent Director

K R Veerappan Chief Financial Officer

Mahesh Thakar Head - Legal & Co. Secretary

V V Ranganathan Independent Director

Competitors:

Name Sales Turnover

UltraTech Cement 43,188.34
Shree Cements 12,588.39
Ambuja Cements 11,371.86
ACC 13,784.54
Dalmia Bharat 148.00
Extraction of cost information for preparation of
Cost Sheet:
(Screenshots Attached Below)

Less- Excise Duty 498.04

Net Sales 156588.84

EXPENDITURE: N/A

Increase/Decrease in Stock 8179.79

Raw Material Consumed 78364.15
Opening Raw Materials 15550.36
Purchases Raw Materials 71491.12
Closing Raw Materials 8677.33

Employee Cost 39393.63

Salaries, Wages & Bonus 33082.30
Contribution to EPF 5137.31
Workmen & Staff Welfare 717.33

Rent 220.97
Rates & Taxes 369.31
156.73
Insurance
1550.41
Professional and legal fees

Selling and Distribution Expenses

Advertisement & Sales Promotion 2618.97
736.44
Sales Commissions & Incentives 299.32
Commission on sales 149.95
Bad debt written off 14526.52
Carriage outwards 588.43
Packing expenses
Note 1 :(Opening- Closing Inventories)

Note 2: (Prime Cost)

Note 3: (Cost of Production)

Note 4 (Work Cost, COP, COS)
Particulars Amount Amount
(₹in lacs)
Opening stock of raw materials 15,550.36
Add: Purchase of raw material 71,491.12
: Purchase Expense
Less: Closing of raw materials (8,677.33)

1. Raw material consumed 78,364.15

2. Direct labour
o Employee Cost 39,393.63
3. Direct Expenses
o Excise duty 498.04

A. Prime Cost 1,18,255.82

Add: Factory Overheads

o Depreciation 10896.06
o Repairs and maintenance 5933.38
o Insurance 689.20
o Rent 1180.24
o Power and Fuel 8689.29

Less: Sale of factory scrap 220.35

27,167.82
Work Cost Incurred
1,45,423.64

Add: Opening Stock of Work-in-Progress 438.06

Less: Closing Stock of Work-in-Progress 207.02
231.04

B. Factory/ Work Cost 1,45,654.68

Add: Office and Administrative Overhead

o Professional, consultancy and legal expenses 1550.41
o Rates & Taxes 501.88
o Statutory audit fee 48.00
o Tax audit fee 6.00
o Directors’ fee 59.75
o Directors’ commission 120.00
2,286.04
Cost of Production 147,940.72

Add: Opening stock of Finished Goods 10901.74

Less: Closing stock of Finished Goods 11085.45

(783.71)

C. Cost of Goods Sold 1,47,157.01

Add: Selling and distribution overheads

o Advertisement and Sales promotion 2618.97
o Travelling and conveyance 736.44
o Commission on sales 299.32
o Bad debt written off 149.95
o Carriage outwards 14526.52
o Packing expenses 588.43
18,919.63
D. Cost of Sales/ Total Cost 1,66,076.64

Profit 18,919.63
Sales 184,996.27
Terminology and Formula
Prime Cost:
Prime Cost are a firm’s expenses directly related to the material and labour used in production.
Prime costs are direct costs, meaning they include the costs of direct materials as well as direct
labor involved in manufacturing an item. Companies use prime costs to price their products.

Calculation of Prime Cost:

Prime Cost= Direct Material Consumed + Direct Wages + Direct Expenses

=78,364.15 + 39,393.63 + 498.04

= 1,18,255.82

If raw material consumed is not mentioned then we need to calculate Raw Material
Consumed by
Raw Material Consumed – Opening stock + Purchase of Raw Material + Purchase
Expense – Closing Stock of Raw Materials.

Work/ Factory Cost:

Factory cost refers to the total cost required to manufacture goods. This concept is the basis of
several cost accounting analysis. Factory Cost is further been broken down into 3 categories:
▪ Direct Materials
▪ Direct Labour
▪ Manufacturing Overhead.

The Work Cost is calculated by summing up the prime cost with the factory overhead and
simultaneously adjusting the opening and closing of work in progress.

Calculation of Work Cost:

Factory Cost = Prime cost + sum of all factory overheads.

=1,18,255.82 + 2,286.04
=1,45,654.68

Cost of Production:
Cost of production refers to the cost a company incurs from manufacturing a product or
providing a service that results in revenue for the company.

Calculation of Production Cost:

Cost of Production = Factory cost + office and administration overheads.

=1,45,654.68 + 2,286.04
=147,940.72
Cost of Goods Sold:
Cost of goods sold (COGS) refers to the direct values of producing the products sold by a
company. This includes the cost of the materials and labor work directly used to create the
good.

Calculation of Goods Sold:

Total Cost = Cost of production + (Opening stock of Finished Goods - Closing stock of
Finished Goods)

=147,940.72 - (783.71)
=1,47,157.01

Cost of Sales:
The cost of sales is the accumulated total of all costs used in production of a product or
service, which has been sold. The cost of sales is a key part of the performance
metrics of a company, since it accurately measures the capability of an entity to design,
source, and manufacture goods at a reasonable cost.

Calculation of Cost of Sales:

Total Sales = Cost of goods sold + Selling and Distribution overheads.

=1,47,157.01 + 18,919.63
=1,66,076.64
Reference:
Annual Report 2021

Thank you.