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Accounting and Costing System analysis at Super Asia Fans

Accounting and Costing System analysis at Super Asia Fans

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Published by Umar

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Published by: Umar on Dec 23, 2009
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06/13/2013

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Final Project on Super Asia Fans
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Accounting and Costing System analysis at Super Asia FansFinal ProjectBsc Hons in Accounting and FinanceSubmitted By:Zain Hameed 05108032Mudaser Umer 05108044Zohaib Khalid 05108058M Dawood 05108105Sharjeel Nasir 05108026Submitted to:Sir Faisal Munir Date: September 30, 2009
Group # 4 GIFT University
 
Final Project on Super Asia Fans
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Executive Summary
Super Asia is rightly rated as largest growing industry of Gujranwala. It is a true exampleof progress made by leaps and bounds. It is engaged in producing a large variety of  products touching the diverse industries like automobiles, electronics, home appliances,and even food chains. It is a family owned business. Super Asia was found 30 years agoand started to grow in 1980s. Super Asia is very successful in its various businessesespecially in Home Appliances. It is eagerly looking forward to modernize its culture anddiversify its investments in other areas as food chain. Super Asia believes in individualimportance in collective success. Mutual respect civility, creativity, and collectiveactivity towards common goals are considered as core values. Ethical behaviors greatlyaffect decision making in company. Company believes in growing profitability. Super Asia is also involved in many after sale and other services along with production, whichdifferentiate them from their local competitors. Super Asia is divided into units based onthe products e.g. there is different unit for fan and a different unit for motorcycle production. There are four departments which serve all production units namely:marketing, HR, sales, and accounting departments. Almost every department except HR department, which consists of a single HR manager, has a supervising manager andassisting staff working under him. Marketing department use a wide range of tactics toenhance sales ranging from TV advertisements to lucky draws. HR department is not performing all the functions in the manner in which it should perform. Sales departmentworks parallel to and in collaboration with marketing department and has a sales force asassisting team to sales manager.The main focus of the project is the evaluation of accounting system and cost efficiency.The accounting department is headed by a chief accountant who is also General Manager of the company. Accounting department serves all production units. Manager Accountsdeals with routine and operational matters of Accounting Department. This departmentalso performs the functions of Costing, Cost Accounting, and Finance. In its accountingfunction, department performs recording, summarizing, classification, and reporting aswell. Company uses an integrated system of accounts with perpetual inventory system. Acustomized accounting software, not very different from other available in market, isused in the company. Costing function is not up to the mark as expected in such a large a
Group # 4 GIFT University
 
Final Project on Super Asia Fans
3fast-growing industry. Standard and process costing is used. There is not consistent policy for costing material issues. No separate material wastage reports are prepared.Labor costing is done by using payrolls and time records. Manual time records are used.Factory overheads are absorbed using production as a base. Monthly Budgets areregularly prepared. Entry for sales is booked when GDN is communicated to Accountingdepartment by Godown, and entry for purchases is booked when invoice is received fromsupplier. There is no defined policy for settling payables and receivables, and settlementis mostly done on the directions of directors. The detailed production process is explainedin annexed chart.There were no major flaws found in accounting system of Super Asia with the exceptionof some small discrepancies. Costing System was not up to the mark as it should have been for such a large organization with such huge growing trends. Also, the typicalconservative mentality of owners can be seen in the inadequate and insufficient safetymeasures for the working labor on dangerous machines. Less focus on HR functions isalso another example. Company should understand its growing needs and should comeout of the conservative frame of mind of operating business. Their business is growingand they must modernize their culture and systems to cope for the growing needs.As a concluding note, it is observed that small businesses, with conservative and withowners having wither no or traditional education, resent to the modernization of cultureand ways of doing business. When these small businesses grow into large organizations,their typical mentality is automatically inherited. This is the case with Super Asia. May be, they are doing a fine business at the present stage, but they have to accept the fact thata revolutionary change in their organizational culture and structure is required to cope for the prospective needs of their immensely growing business.
Group # 4 GIFT University

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