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Project Report of Sulfex Mattress
Project Report of Sulfex Mattress
REVIEW OF LITERATURE
Alejandro M (Head of internal control, YPF group, 2014)
Cost analysis is the process of accumulation, examination, and
manipulation of cost data for comparisons and projections.
INDUSTRY PROFILE
INTRODUCTION
Rubberized coir industry
'Prior to the year "1960 people hardly had- any idea of rubberized coir. In
those days the "world famous car manufacturers Volkswagen of Germany, were
using horse hair as cushion filling material for their car seats. As their production
increased they wanted large amount of raw material. This leads to finding if
alternative product like sisal fiber, jute fiber, and the coir fiber. Coir fiber was
decidedly found to be the best. This was the beginning of rubberized coir industry.
In early 60s two renowned manufacturers Dr. Fehere and Dr. Otto Augliether
(DOA) were competing with each other to supply modem machine to manufacture
rubberized coir products. Their design and material constitution was so excellent
that because we could find some of their plant are still working well over a period of
four decades.
The Indian rubberized coir industry is nearly four decades old. It was in
1964 that Bharth motors of Chennai is the first producer among many other units
came up during sixties.
In the global market the use of rubberized coir had been dominated fey the
automobile industry. The luxurious cars manufacturers like Mercedes, BMW,
Volkswagen, Volvo and Fiat where got most of its supplies all over the world. Even
the Mitsubishi, Honda and Datsun company were a consistent user of rubberized
coir.
Another potential area for coir is for seating in other vehicles like trucks,
buses and railway sub-way coaches. It has potential for replacing polyurethane foam
in inner spring mattresses. The use of rubberized coir as means of stabilizing
seashore line's canal and river bank was reported gradually developing in some of
the western countries like Netherlands, Germany etc. There, exists a very large and
diverse market for bedding and upholstery in Europe and the 'United States wad if
efforts could be made to popularize rubberized coir it would be possible t0 get a
significant share of the market.
In the domestic front, the growth of rubberized coir manufacturing industry
was very slow, particularly as led matters, owing, to lack of awareness and any
organized marketing effort. There was total disapproval of this product in all sectors
when introduced as a healthy hygienic cushioning material. People considered it as
a dirty, fifthy, and low cost and a rough product meant for the low income segment
of the consumer market .The PU foam products in view of its sort feel used to be
considered as a luxury product and had the preference of the upper segment of the
consumer market. The situation gradually changed and the seventies witnessed rapid
growth of the industry with product finding more and more acceptance and outlets
on account of consumer public realizing its unique characteristics functional,
aspects and cost advantages.
After nearly one decade of its introduction, Government of India recognized
Rubberized coir mattress as a healthy and hygienic product, and taken the- efforts
for its popularization through projection of its advantages and end user applications.
COMPANY PROFILE
Sulfex is a commercial mattress company established in the year 1994.
Sulfex is a front line manufacturer with established core competencies, The factory
and marketing office of the company are located- in the parassinikadavu village, 15
km from kannur , an historic town in kerala. The factory is equipped with advanced
machinery and skilled personals to streamline various stages of production.
Sulfex India private limited is founded in the year of 1994, by Mr.M.T.P
Muhammad kuhni, a prominent NRI business personality with diverse interests in
rubberized coir, ply wood and construction in India and trading activities in the
Middle East. Sulfex group is a fastest growing entity, surging ahead with various
business interest filled by underlying passion to pursue excellence on all front,
Sulfex aims to create long lasting value for customers across the world.
Beginning as the manufacturer of exceptional quality rubberized coir
mattress; the Sulfexgroup, has along way today. Together the two state of coir based
manufacturing plants, such as Sulfex fiber products and Mattress products.
Company has grown rapidly.
Geographically it is situated at parassinikadavu and thaliparamba, kannur,
northern part of Kerala state. Account for a mammoth 8000 metric ton production
Gapaaty. Sulfex is the India's second largest and most sophisticated plant having
capacity for rubberized coir mattress as well as allied products like carpet,
underlay's, packing pads, air conditioner filters and companion products like
pillows, cushions and a range of door and bath mats.
The raw materials' are 100% natural coir fiber and rubber latex that are fully
replenishable resource. By Harnessing its technological superiority, product
excellence and care for the environment, the company has created one of the best
scientifically backed rubberized coir matters brand.
Sulfa is a brand that is going places not only in India, but in highly
discerning value conscious global market as well. With a turnover that is 400
million in Indian currencies company stronghold, the state of Kerala, and through a
wide network of 2000 dealers, Sulfex is expanding its market to the whole south
India, Goa, Maharashtra, Madhya Pradesh, Chhattisgarh, Jharkhand, Orissa and
west Bengal. Backed by mammoth production capacity and proactive logistics
capacity, Sulfex is positioning itself as a front line player in these areas.
The company relies on imported machinery and highly skilled manpower.
Continuous quality upkeep and attention to detail ensure that each mattress provides
maximum sleeping comfort and extra long life. These are the two critical
benchmark for every mattress produced by the company.
Many quality conscious clients' approaches in Sulfex mattress like director
general of supplies and disposal, ministry of commerce and industry, government of
India, director if general quality assurance, premium hotels, internationally reputed
pilgrimage centers etc, for instance. The "product excellence" awards that have
come Sulfex's way stand as a glowing testimony to the brand superiority.
VISION
"Aims to create long lasting value of customers across the world"
MISSION
The aim of sulfex company is to produce agro based or eco friendly products
with natural resources. Sulfex Company utilizes the available resources effectively
and efficiently. Their consumption of raw material is minimal and it provides
maximum comfort.
QUALITY POLICY
PROMOTERS
Great India Particles Pvt Ltd.
Prime Habitats Pvt Ltd.
Khazana Builders Pvt Lt-d
OBJECTIVES
Produce eco friendly products
Minimum rejection or wastage
TO satisfy the customer by providing the right quality goods at the right time
and at right place and also in right price
To produce quality product
Economy in production
SULFEX MOTTO
Our customer is the most important person in premises and our employees
and our workers are our assets.
We are steered by the needs and requirements and strive to exceed their
expectations every time.
We are responsible to the community in which we do business, building their
skills and strength as we our own.
We never compromise the quality and our products.
We research and innovate for ways to improve our skills to serve our
customers better
ROPEE DRYING
UNTWISTING
SHEET MAKING
HYDRAULIC PRESSING
10
PRODUCTS PROFILE
Following are the various of products offered by the sulfex Company
I.
II.
Sulfex mattress
Sulfex cushions, Pillows mid
bolsters
III.
sulfex quick dry mats
Sulfex mattress
Sulfex mattress provide scientifically tested back support and soothing
comfort. The main objective of company is to give good quality product for a
reasonable price. The products unique Side blanketing (only mattress to have this
specialty) attribute prevents sagging and help keep dimensional stability intact, in
spite of long use. For the critical tape- edging process, the company retires on
imported machinery and skilled manpower.
Sulfex produces 3 different grade of mattress namely soft grade, medium
grade and firm grade. The mattresses come in varied size, length, width and density.
Size varies from length. Common sizes are 72 inches, 75inch, and 7inch. Width also
varies from 24, 30', 33', 36, 424860, 72.Thickness from 1 inch to 12 inches.
Density of mattress is 80.
According to the order the length and width varies. Among these Sulfex
mattresses are differentiated with its size, quality and rates. They are listed below
Sulfex President
It is a brand new range from Sulfex, quilted in fine polyester blended cotton
for added comfort. It is designed especially for the most luxurious experiences with
11
an extra layer of rubber foam and Exudes elegance and indulgences, every inch,
super thick, with rich rubber topping to sink in softly. It has Strong inner backings
to help your body retain the natural comforts. It is available with a wide variety of
royal shades and designs to pick your right president.
Sulfex Nakshatra
It offers plush, but firm backings for your fun filled indulgences. Yes it
is ideal comfort that newlyweds yearn for. Finer fabric and & polyester
blended cotton. Ensures superior comfort and It is also choice mattress for the
hoteliers to pamper then- choicest guests. Wide range to satisfy every
customers taste. Available in a stunning range of surface designs and covers.
12
Exquisite elegance takes the shape of mattress. The premium range and fine
quality mill cloth. Everyone will admire the majestic quitting, and die superior
13
quality of sloth and the finest shades and designs. As for its comfort, everyone will
surrender. The, wide range of colors and quilted designs offer you a lot to indulge
in.
14
MAJOR COMPETITORS
The major competitors for Sulfex mattress are
M/S KURL-ON
M/S DUOFLEX
M/S RUBCO
M/S SHERLON
M/S FIBERFOAME
INFRASTRUCTURE FACILITY
Sulfex provides a very good infrastructure facility. Areas of land covered
with production facility, administration and roads..The infrastructure facilities includes,
Drinking water
drinking
Canteen
serving good
food at reasonable price
15
Cabins
without
any disturbance from outside
Machines
manufacturing the
products
FUTURE GROWTH AND PROSPECTS
SWOT ANALYSIS
Strengths
Weaknesses
Opportunities
Maximum utilization of workforce efficiency
16
Expanding market
Increasing number of marketing outlets
Higher performance due to increasing capacity
A The reasonably priced products of the company have a competitive edge
in the market
Efficient and well connected transportation system
Threats
The threat from local competitors. Some of the Competitors have been able
to gain ground even in remove rural areas
Unfavourable raw material price, price of chemicals and other resource
AWARDS & ACHIEVEMENTS OF THE COMPANY
ISO 9001:2008,isi&,bis certification for the company
Management System Certified- Company
First Company to have DCQA (Director General of Quality Assurance)
Certification
Best small scale Industries award 1998-99
Kerala Govt. CONSUMER AWARD for quality in the year 2000
National Small scale Industries Award (HSTC)
Best performer award from Canara Bank
ORGANIZATION AT A GLANCE
Company name
Business Type
Manufacture/wholesale supplier
Product name
Plant Location
Pallivayal, Kannur
Company Address
Elemhelampara
Pallivayal P.O, Thahparamba
Kannur, Kerala-670
Tel-0497-2780747, 2780748
Fax: 0497-2780848
Email: sulfexindia@gmail.com
Website: www.Sulfexmattress.com
Turnover
17
Ownership
Constitution
proprietorship
Year of establishment :
1994
Owner
Factory information
No. of R&D Staffs
3 persons
Production capacity
Total employees
210 persons
24 hours (3 shifts )
Office
8 hour
Board licenses
Coir board.
Rubber board
Pollution control board
Managing director
ORGANIZATIONAL STRUCTURE
General Manager
Production manager
Marketing manager
Finance manager
Area sales
Accounts
Personnel manager
Staff
Plant in charge
Production in charge
Sales officer
Foremen
Cashier
Sales executive
Staff
Electricians
18
Workers
Workers
Workers
INTRODUCTION TO FINANCE
In a modern day economy "Finance" is considered to be the "Life Lim" of
every business and it is the foundation upon which all me economic activities are
carried put. To think of an economy without money is impossible as it is the most
important element of all the commercial activities earned out in the world, it has
overcome the difficulties of the barter system. It has brought in rapid economic
changes actress the globe by facilitating Specialization and division of labour,
techno logical advancement to meet large scale demands of customers spread over a
Wide area, enhancement of business activities and expansion of financial
institutions and organization.
MEANING OF FINANCE
19
20
Cost accounting
Ascertainment of profitability
Cost presentation
Cost control
METHODS OF COSTING
There are two methods of costing
21
22
information using some procedure and principles for recording cost data. There are
two methods of costing and they are as follows
1. Job order costing system
2. Process costing system
23
24
25
26
Direct material
Direct labour
Direct expenses
Factory
overhands
Opportunity cost
Sunk cost
Relevant cost
Differential cost
Imputed cost out-out of pocket cost
Fixed, variable and mixed cost
Shut dawn cost
27
MARGINAL COSTING
The chartered institute of management accountants, England, defines the
term marginal costing as "marginal costing is the ascertainment of marginal cost
and of the effect on profit of changes in volume or type of output by differentiating
between fixed costs and variable costs.
Characteristics of marginal costing
The essential characteristics and. mechanism of marginal costing technique
may be summed up as follows:
28
In marginal costing stock of work in progress and finished goods are valued
as marginal cost only. In observation costing, stocks are total cost which includes
both fixed and variable costs. Thus stock values in marginal cost are lower than in
absorption costing.
2. Management of profitability:
In marginal costing, relative ^profitability of products or department is based
on study of relative contribution made by respective products or departments. The
managerial decisions are thus guided by contribution. In absorption costing, relative
profitability is judge by profit figures that also guiding factor managerial decision.
Elements of cost:
Mere knowledge of total cost cannot satisfy the needs of management for
proper control and managerial decisions, management is to be provided with
necessary data to analyze and classify cast. For this purpose, the total cost is
analyzed by elements of cost are 3 materials it is, materials, labour and other
expenses.
Elements of cost:
a. Materials
Direct
Indirect
b. labour
Direct
Indirect
c. Other expenses
Direct
Indirect
d. Overheads
Production
Administration
Sellings
Distribution
29
Manufacturing overheads
Administration overheads
Selling and distribution overheads
Variable overhead
Research and development expenses
Fixed overhead
Semi variable cost
Indirect materials
Indirect labour
Allocation and apportionment of overhead of cost centers
Allocation of overhead expenses
Apportionment of overhead expenses
30
It is the graphical representation of sales volume and sales. It snows not only
the BEP but also the effects of cost and revenue at varying levels of sales.
USE OF BREAK EVEN CHARTS
OBJECTIVE 1
31
% Changes in Purchase
100.00%
127.54%
148.96%
% Changes in Purchase
160.00%
140.00%
120.00%
% Changes in
Purchase
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%
2010-2011 2011-2012 2012-2013
ANALYSIS
Total Purchase: The above table interpret that the total purchase by taking base
year as-2010-11 On the basis of this, the total purchase in the year 2011-12 it has
been increased by 24.54%. and also it has been tremendously increased to 48.96%
in the year 2012-2013.
INTERPRETATION
Total Purchase: The Above Graph it Reveals that total purchase has been upward
trend in the purchase of raw material by the company from year to year. And
company also earned maximum profit.
32
Crores)
2010-2011 127.23
2011-2012 137.11
2012-2013 185.37
(Source: Reports of SULFEX)
% Changes in Prime
Cost
ANALYSIS
From the above table, it reveals That the Prime cost in the year 2011-2012
was 128.76 % increased compare to base year 2010-2011. But from the year 2010 to
2013 it has been tremendously increasing every year. In the year 2012-2013 it has
been shown as 74.08%, hence the Total Prime Cost have been increased.
INTERPRETATION
The above Graph, it interpret that the prime cost has been increased due to
increase in purchase of "C" grade coal. If "C" grade coal which often produced
33
more waste, it is advisable to the organization to maintain and reduce the total direct
wages. Compared to the previous year the prime cost have increased due to increase
in the cost of raw material and direct wages.
TABLE 4.3: TABLE 3 SHOWING TOTAL FACTORY OVERHEAD
Year
2010-2011
2011-2012
2012-2013
(Rs in Crores)
5.43
6.74
10.01
Overhead
100.00%
157.11%
233.33%
% Changes in Total
Factory Overhead
100.00%
50.00%
0.00%
ANALYSIS
From the above table it shows that the Total Factory Overhead in the year
201l-20l2 was 57.11% increased compare to base year 2010-2011. But from the
year 2010 to 2013 it has been tremendously increasing every year. In the year 20122013 it has been shown as; 113.33%, hence the Total Factory Overhead have been
increased.
INTERPRETATION
34
The Above Graph reveals that the total factory overhead has been increased
due to increase in purchase, if"C1' grade coal which often produced more waste.
Hence, it is advisable to the organization to maintain and reduce the total works
overheads. Compared to the previous year the factory expenses have increased due
to increase in me cost of raw material and factory stores and spares.
TABLE 4.4: TABLE 4 SHOWING OFFICES AND ADMINISTRATIVE
Year
Administrative
100.00%
163.39%
178.43%
100.00%
50.00%
0.00%
ANALYSIS
From the above table, it shows that the total office administration overheads
63.39% was in the year 2011-2012. It has been increased to 78.43% in the year
2012-2013. Thus the total office and administration overheads have been increased
from year to year.
INTERPRETATION
35
The Above Graph reveals that there is. a variation in office and
administration overheads. It is advisable to the organization to pay the managers on
the basis of value created and added to the organization. There should be sufficient
safety measures to be adopted while handling the machines or while work. The
interest burden of the organization can be reduced by early repayment of loan to
NDDB and to the majority extent use the reserves and surplus in
applying/allocating the funds.
But in year 2012-2013 expenses have decreased than the expected because
in that year they acquired land expansion activities have been done. The amount
decreased in cost of production from the year 2(U 1-2012 to 2012-2013
TABLE 4.5: TABLE 5 SHOWING SELLING AND DISTRIBUTION
OVERHEAD
Year
Overhead
100.00%
219.45%
220.04%
150.00%
100.00%
50.00%
0.00%
36
ANALYSIS
From the above table, it is found that there is an increase in selling and
distribution overheads from the year to year. But it had been increased in selling
and distribution overhead from the year 2011-2012 to 2012-2013 is 120.04%. it
reveals that the Amount of Selling and distribution overhead is increasing year
by year because for more production and demand.
INTERPRETATION
The above Graph it interprets that the selling and Distribution overheads
have been increasing from year to year because after a product is established well in
market and when product becomes household name then there may be much
expenses on marketing and distribution likewise MYSORE SANDAL brand is also
a households name m these days as they are serving people from with good quality
product.
TABLE 4.6: TABLE 6 SHOWING NET PROFIT AND TOTAL SALES OF
THE SULFEX
Year
(Rs in crores)
Net Profit
2010-2011
5.11
2011-2012
13.46
2012-2013
21.75
(Source: Reports of SULFEX)
Total Sales
181.06
231.12
286.14
37
Net Profit
25
20
Net Profit
15
10
5
0
2010-2011
2011-2012
2012-2013
ANALYSIS
From the above table it found that the net profit was 5.11 crores in the year
2010-2011 but it has tremendously increased 13.46 crores in the year 2011-2012
and the net profit increased 21.75 crores in the year 2012-2013.
INTERPRETATION
The above Graph it infer that the profit is increasing from year to year
because of good sales planning of the company and also due to increased selling
price per unit. Profit is lowest in the year 2010-2011, because of improper planning
and excessive purchase of raw material and other essential manufacturing items.
OBJECTIVE 2
ANALYSIS OF COST SHEET AND PREPARATION OF BUDGETED COST
SHEET
38
AMOUNT
152848682
Add: Purchase
969031446
277927
1122158055
Total
AMOUNT
185180599
936977456
294179572
1231157028
Cost
1231157028
36768601
329090
3401084
4728065
Rent
2053278
Insurance
477742
5077222
6924781
59759863
Processing charges
Total
Less: Scarp
59759863
Total
34115426
22921163
70954126
39
Total
70954126
Work
Cost
1817028
3067907
Building Repairs
3933504
344235
Postage
509902
Subseription to Generals
3273808
88240
Legal Charges
4999633
Audit fee
21833
Security Charges
1448133
1836576
21340799
Vehicle Maintains
1302111154
Directors Fee
330641731
Total
Cost of Production
317132796
21340799
1323451953
13508935
59031105
1336960888
271862
102493145
Advertisement
35289203
Bad Debts
14427130
Sales promotions
5041058
Carriage outwards
160958395
C & F Charges
377511898
Octroi Charges
Excise Duty
Total
377511898
Cost of Sales (Total Cost)
40
1714472786
Profit
sales
96208841
1810681627
Table 2.1- STANDARD COSTING FOR THE YEAR END 2010-11
(Source: standard cost sheet and actual cost sheet)
In
Rs
PARTICULAR
Prime cost
Factory cast
Administrative cost
Cost of goods sold
Total cost
BUDGETED COST
1366584301
1445343381
1469031668
1484026586
1903064792
ACTUAL COST
1231157028
13Q2H1L54
1323451953
1336960888
1714472786
VARIATION
135427273
143232227
145579715
147065698
188592006
(Rs in crores)
25
20
15
10
5
0
2010-2011
2011-2012
2012-2013
ANALYSIS
From the above table it found that the Prime cost was decreased i.e, Rs
135427273, Factory cost was Rs 143232227, administrative cost was Rs
145579715, the cost of goods sold varies from budgeted to actual cost i.e,Rs
147065698.
INTERPRETATION
41
The above graph shows that there is a positive variance in all the cost, its
actual cost does not loss the standard cost the company having efficient control over
the actual cost.
AMOUNT
185180599
Add: Purchase
1226935401
221106
1412337106
Total
AMOUNT
242852687
1169484419
301713848
1471198267
Cost
1471198267
36072922
324301
5376625
4816392
Rent
2068223
Insurance
371184
8714698
9851032
67595377
Total
3714987
Less: Scarp
63880390
Total
34115426
22921163
75074653
42
Total
75074653
Work
1546272920
Cost
Add: Administration Overhead
2592327
Building Repairs
2454999
4117125
Postage
233830
Subseription to Generals
1060080
5485694
Legal Charges
88240
Audit fee
4819205
Security Charges
29382
2567243
Vehicle Maintains
1868957
25317082
Directors Fee
Total
25317082
Cost of Production
317132796
1571590002
219032392
98100404
1669690406
42700589
37760
Advertisement
152276263
Bad Debts
45404667
Sales promotions
16457515
Carriage outwards
5263306
C & F Charges
192794268
Octroi Charges
454934368
Excise Duty
Total
454934368
Cost of Sales (Total Cost)
43
2124624774
Profit
186608023
sales
2311232797
Table 2.1- STANDARD COSTING FOR THE YEAR END 2010-11
In
Rs
PARTICULAR
BUDGETED COST
ACTUAL COST
Prime cost
1588894128
1471198267
Factory cast
1669974754
1546272920
Administrative cost 1697317202
1571590002
Cost of goods sold
1803265638
1669690406
Total cost
2294594756
2124624774
(Source: standard cost sheet and actual cost sheet)
VARIATION
117695861
123701834
125727200
133575232
169969982
Chart Title
10
9
8
7
6
5
4
3
2
1
0
ANALYSIS
From the above table it shows that the Prime cost was decreased i.e, Rs
117695 861, Factory cost was Rs 123701834 , Administrative cost was Rs
125727200, the cost of goods sold varies from budgeted to actual cost i.e, Rs
133575235.
44
INTERPRETATION
In tills year SULFEX has a positive Variance it does not affect the profit
position of the company. Compare to last year variances of all overhead has been
decreased because of effective control over cost.
2.3 - Budgeted cost sheet for the year 2012-13
PARTICULARS
Opening Raw material
AMOUNT
242852687
Add: Purchase
1410128089
159041
1653139817
Total
AMOUNT
179225785
1473914032
320912715
1794826747
Prime Cost
Add: Factory Overheads
1794826747
50980071
186229
7086525
5229541
Rent
2738015
Insurance
2995050
7523157
11753475
88492063
Total
4432823
Less: Scarp
84059240
Total
22921163
27629242
79351161
45
Total
79351161
Work Cost
1874177908
1663742
Building Repairs
3095221
3689247
Postage
211995
Subseription to Generals
1301463
7325070
Legal Charges
151545
Audit fee
5524223
Security Charges
60521
2218150
Vehicle Maintains
2302483
27543660
Directors Fee
Total
27543660
Cost of Production
219032392
1901721568
213945635
5086757
1906808325
70664438
1408744
Advertisement
150236150
Bad Debts
53137628
Sales promotions
18416029
Carriage outwards
5421533
C & F Charges
304933560
Octroi Charges
604218082
Excise Duty
Total
604218082
Cost of Sales (Total Cost)
Profit
2511026407
351106411
46
sales
2862132818
BUDGETED COST
1974309422
2061595699
2091893725
2097489158
2762129048
ACTUAL COST
1794826747
1874177908
1901721568
1906808325
2511026407
VARIATION
179482675
187417791
190172157
190680833
251102641
Chart Title
10
9
8
7
6
5
4
3
2
1
0
ANALYSIS
From the above table it found that the Prime cost was decreased i.e, Rs
179482675, Factory cost was Rs 187417791 , Administrative cost was Rs
190172157 , tile cost of goods sold varies from budgeted to actual cost i.e, Rs
1906808333.
INTERPRETATION
47
As per the above analysis the actual is increased compare to previous year
due to lack of control over cost or increased cost of input.
OBJECTIVE-3
COST VOLUME PROFIT ANALYSIS (BREAK EVEN CHART ANALYSIS)
The break-even chart is a graphic relationship between cost, volume and
profit. It shows not only the BEP but also the effects of cost and revenue at varying
levels of sales. The break even chart is also called as volume profit graph.
Table 3.1-COMPUTATION OF PROFIT FROM THE YEAR 2010 TO 2013
(Source: Cost sheet of SULFEX )
PARTICULAR'S
Sales
TOTAL COST
Variable Cost
Contribution
FIXED COST
PROFIT
2010-11
1810681627
1714472786
774654411
1036027216
939818375
96208841
2011-12
2311232797
2124624774
1008130135
1303102662
1116494639
186608063
2012'20l3
2862132818
2511026407
774654411
2087478407
1736371996
351106411
2012-2013
2381857590
0.729
481627450
ANALYSIS
The table indicates that Margin Safety of each product for the last 3 years. In
the year 2010-11 was Rs 168197275 again it was increased from Rs 331452972 to
481627450 in the year 2011-12 & 2012-13 Respectively.
48
INTERPRETATION
Margin of Safety is increased year by year it shows as the company's
business is getting strengthened as business grown.
TABLE 3.1 SHOWING NET PROFIT AND TOTAL COST OF THE SULFEX
Year
(Rs in crores)
Net Profit
2010-2011
5.11
2011-2012
13.46
2012-2013
21.75
(Source: Reports of SULFEX)
Total Cost
25.11
21.24
17.14
15
10
5
0
2010-2011
2011-2012
2012-2013
ANALYSIS
From the above table it shows that the net profit was 5.11 crores in the year
2010-13 2011 but it has tremendously increased 13.46 crores in the year 2011 -2012
and the net profit increased 21.75 crores in the year 2012-2013.
INTERPRETATION
49
From the above table it infers that the profit is highest for the year20122013 because of good control over cost and also due to decreased cost price per unit
Profit is lowest in the year 2010-2011, because of improper planning and excessive
purchase of raw material and other essential manufacturing items.
SUGGESTIONS
The following are some of the recommendation to improve the cost
accounting system in Sulfex
50
The company should increase their sales to acquire increased level of market
share in the domestic market. This may help in achieving goals: of the
organization
Increase in sales volume is not profitable to me company so, it should aim at
reducing costs and expenses before thinking of increasing the sales volume.
Attempts should be made to reduce production costs with the help of
research and development department
It is suggested to adopt just-in-time approach which not only make stores
activities effective but also eliminate unnecessary activities that involved in
the stores. This will help in control of costs.
Reduce the time gap between 2 cost sheets. At present cost sheet drawings
requires, minimum 3 months, increase the pace by effectively utilizing
computer facilities.
There is primary step for Control of selling and distribution overheads.
Attempt should be made to account for expenses in detail by type of
expenses selling and distribution function can be divided into following
activities and then account ledgers are allotted for which heading
accordingly.
Demand creation
Demand sustaining
Strategic and warehousing
Transportation
Customer financing and collection
Financial and general administration
51
CONCLUSION
From the study undertaken in SULFEX it can be concluded that cost
accounting system is essential in every manufacturing company: Cost accounting
provides information of the nature of cost data to managerial personnel for efficient
performance of their functions.
A such cost accounting is the foundation of the management information system.
It is me means to achieve its defined goals & financial goals.
As there is a huge national competition for Domestic traders, SULFEX should
reduce its cost. By the efficiency of workers and by replacing old machines
companies profit is increasing year by year.
Members use information generated under cost accounting system by
management at different levels; thus different sets of information could be
developed under cost accounting and supplied to different persons responsible for
activities in the organizations. It is used for the purpose of analysis and decision
making.
To conclude cost accounting system provides the service to aid the
managers in achievement of the goals and targets laid by the management grid its
52
effectiveness evaluated from time 10 time. The overall performance of the Cost
accounting department of SULFEX is Satisfactory.
BIBLIOGRAPHY
WEBSITES:
WWW.GOOGLE.COM
REPORTS
Company Annual Reports
Cost Reports.
BOOKS REFERRED:
Management Accounting and control system
Author: Shashi K Gupta
Cost Accounting
Author : M..N Arora (second edition)
53
Amount as at
Amount as at
Amount as at
31-03-2013
31-03-2012
31-03-2011
54
242852687
185180599
152848682
1410128089
1226935401
969031446
159041
221106
277927
1653139817
1412337106
1122158055
179225785
242852687
185180599
1473914032
1169484419
936977456
320912715
301713848
294179572
1794826747
1471198267
1231157028
50980071
36072922
36768601
186229
324301
329090
Rent& Rates
7086525
5376625
3401084
Rent
5229541
4816392
4728065
Insurance
2738015
2068223
2053278
2995050
371184
477742
7523157
8714698
5077222
11753475
9851032
6924781
1883318810
1538793644
1290916891
4432823
3714987
1878885987
1535078657
1290916891
22921163
34115426
34115426
27629242
22921163
22921163
1874177908
1546272920
1302111154
Add: purchase
Add: carriage inwards
Total
Less: closing stock
Direct material consumed
Add:Direct wages
Prime Cost
Add: factory overheads
Power and fuel
Coal Handling Charges
Processing charges
Total
Less: Scarp
Total
Add: Opening stock of work in
progress
Less: closing stock of work in
progress
Work cost
55
1663742
2592327
1817028
3095221
2454999
3067907
Postage
3689247
4117125
3933504
211995
233830
344235
1301463
1060080
509902
Legal Charges
7325070
5485694
3273808
151545
88240
88240
5524223
4819205
4999633
60521
29382
21833
Vehicles maintains
2218150
2567243
1448133
Directors fee
2302483
1868957
1836576
1901721568
1571590002
1323451953
219032392
317132796
330641731
213945635
219032392
317132796
1906808325
1669690406
1336960888
70664438
42700589
59031105
1408744
37760
271862
Sales promotions
150236150
152276263
102493145
Carriage outwards
53137628
45404667
35289203
C& F Charges
18416029
16457515
14427130
Octroi charges
5421533
5263306
5041058
304933560
192794268
160958395
2511026407
2124624774
1714472786
Profit
351106411
186608023
96208841
Sales
2862132818
2311232797
1810681627
Subseription to General
Audit fee
Security charges
Board meeting expenses
Cost of production
Excise Duty
Cost of Sales (Total Cost)
56