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MATERIAL COST CONTROL
For the partial fulfillment of the award of
Bachelor of Business Administration (2008-2011)
JIWAJI UNIVERSITY GWALIOR
AKASH GUPTA BBA-V Sem.
PRESTIGE INSTITUTE OF MANAGEMENT, GWALIOR
Airport Road, Near Deen Dayal Nagar, Gwalior-474020 Email: firstname.lastname@example.org; Website: www.prestigegwl.org
I AKASH GUPTA, student of BBA V Semester of Prestige Institute of Management, Gwalior, hereby declare that the project is my original piece of work and not the copy of any such work undertaken by someone else, all the information , facts and figures presented in the report are first hand in nature. They are actually based on my intense efforts conducted in CADBURY INDIA LTD. I have completed this project under the guidance of Prof. NAVITA NATHANI ( Faculty PIMG)
AKASH GUPTA BBA –Vth SEM
This is to certify that
GUPTA Student of BBA Vth Semester
programme has completed her summer training of 4 weeks and prepared this report of “MATERIAL COST CONTROL” under my guidance.
Prof. NAVITA NATHANI (Faculty Guide)
Date: AKASH GUPTA BBA –V SEM . but continue inspire me in knowing the clandestine facts of workmanship. NAVITA NATHANI without whose invaluable guidance. I bow in honor before these great teachers. moral support and encouragement my work would have ever assumed the present shape.ACKNOWLEDGEMENT The present work is dedicated to the persons who not only taught me. I was indebted to my parents and friends for their moral support and possible efforts they made for me. Firstly I would like to express my sincere gratitude to my faculty guide Prof. research. The accomplishment of the present study became possible by the invaluable assistance and guidance of my professional guides to whom I may gratefully indebted.
• Suggestion • Special Point • Names of the CEO/MD/Department Head Chapter -1 • Introduction Chapter –II • Objective of The Study Chapter –III • Result & Discussion Chapter – IV • Suggestion Chapter –V • Conclusion .INDEX • • page no History of the Organization & Objective Organizational Structure • Financial Performance • Material Cost Control • Production & Operations • Marketing • Strength & Weakness of the Organization.
It delivers the taste of chocolate in the form of a light snack. The corporate office is in Mumbai. We recently entered the gums category with the launch of our worldwide dominant bubble gum brand Bubbaloo. Bangalore and Baddi (Himachal Pradesh) and 4 sales offices (New Delhi. Mumbai. Bytes were first launched in South India in 2003. Cadbury has maintained its undisputed leadership over the years. we spread happiness! Currently Cadbury India operates in three sectors viz. Perk. which has been dominated until now by Salted Bagged Snack Brands. Our core purpose “Working together to create brands people love” captures the spirit of what we are trying to achieve as a business. Kolkota and Chennai). Similarly in the medicated candy category Halls is the undisputed leader. Induri (Pune) and Malanpur (Gwalior) . Chocolate Confectionery. . Simply put. We collaborate and work as teams to convert products into brands. Crispy wafers filled with coca cream in the form of a bagged snack. milk food Drinks and in the Candy category. it today has five company-owned manufacturing facilities at Thane. The pure taste of CDM defines the chocolate taste for the Indian consumer.HISTORY OF THE ORGANISATION AND OBJECTIVE CADBURY INDIA Cadbury began its operations in 1948 by importing chocolates and then re-packing them before distribution in the Indian market. Some of the key brands are Cadbury Dairy Milk. The Cadbury India Brand Strategy has received consistent support through simple but imaginative extensions to product categories and distribution. In the Milk food drinks segment our main product is Bourn vita – the leading Malted Food Drink (MFD) in the country. Bubbaloo is sold in 25 countries worldwide. After 59 years of existence. A good example of this is the development of Bytes. In the Chocolate Confectionery business. and thus heralds the entry of Cadbury India into the growing bagged Snack Market. Cadbury enjoys a value market share of over 70% the highest Cadbury brand share in the world! Our flagship brand Cadbury Dairy Milk is considered the “gold standard” for chocolates in India. Bytes is positioned as “The new concept of sweet snacking”. Éclairs and Celebrations. 5 Star.
the unit today manufactures range of liquid milk chocolate and a variety of enrobed chocolate products. Malanpur Total Area 24 Acres – Constructed 8. 83804 Cadbury Schweppes International UK Éclairs & Gems 5 Star Perk Chocolate expansion Fruity Gems Ultra Perk Short Éclair Sticks : Plot No.MALANPUR FACTORY In 1989 the company stated manufacturing operations from its third and newest factory at Malanpur near Gwalior in M. – Bhind. 25. Using the most modern state of the art technology. An event that carried forward the entrepreneurship and vision born as far back as 1824. Parent Company : : distt. Malanpur Industrial area. the real taste of chocolate as we know it today. landed on Indian shores.5 Acre HISTORY OF ORGANISATION Fifty years ago. 07539-83803. when John Cadbury set up shop in Birmingham (UK) to sell among other things – his own cocoa concoction. Factory in 8 phases 1988-89 1994-95 1997 2001 2005 2006 2008 2009 LOCATION Telephone No. From these modest beginnings emerged .P.
. And operates in one of the fastest growing chocolate markets for Cadbury Schweppes group across the globe. Today Cadbury India Ltd. Within a year of being set up as a trading concern. A company that has its presence in over 200 countries worldwide and has made the name ‘Cadbury’ synonymous with cocoa products in countries across the planet. We have a majority share in the Indian chocolate market and a significant presence in sugar confectionery and food drinks. a subsidiary of Cadbury Schweppes employs over 200 people across the country. new products. The same year saw the launch of Cadbury’s Milk chocolate for millions of Indians. set up for processing imported chocolates and Bourn vita. sugar confectionery and malted food drinks segments. Through 50 years of investment in capital and marketing. a market that was ready for the world and a people that were open to new ideas. This is the brand that came to India in 1947 to a nation that was in its infancy. the scale and scope of our operations has expanded to cover a range of brands in the chocolate.Cadbury Schweppes – that is today the leading manufacturer of confectionery and beverages in the United Kingdom. Cadbury fry India was incorporated as a Private Limited company.
Supply Executive Chain Marketing Purohit Director - .Non Executive Managing Director Anand Kripalu Managing Director Non-Executive Directors Harsh Mariwala Radhakrishnan B. Menon Suresh Talwar Executive Directors Atul Bhatia Executive Director Science & Technology - Rajesh Garg Executive Director Finance & Commercial Jaiboy Phillips Sanjay Executive Director .ORGANISATION STRUCTURE Chairman C Y Pal Chairman .
Manufacturing (Baddi) .Sunil Sethi V Chandramouli Executive Director Executive Director Sales & Customer HR & Strategy Development Senior Management Ashish Pisharodi Rajesh Ramanathan Vice President .Procurement Monaz Noble Company Secretary Sanjay Kurup VP . Shantanu Samant Legal Vice President Science & Technology Vivek Sarbhai Dharmesh Joshi Vice President .People & Trade Talent Shivanand Sanadi Vice President Affairs Dr.Modern Vice President .Logistics & Vice President Customer Operations Manufacturing Development Sherezad Irani VP .
Finance department of malanpur factory is also working in the same direction and with the same objective but it has some limitation because most of the importance finance related matter are directly dealt and finalized by the central finance department in the Mumbai head office. . Increase in Sales FINANCIAL FUNCTIONS 1. Preparing variance report a) Material user variance report b) Packaging material user variance report 2. Production report 3. Reduction in cost 2. Excise related matter 4. Factory finance department always endeavors of maximizing the profit of high company through two possible ways: 1. Payment to small engineering items and other goods.FINANCIAL PERFORMANCE Finance holds the key to all human activity. Export related matter 5.
carried in the stores. 3) Central stores with sub-stores: Such stores should be situated near production departments. For each item of material. .: . 2) Simplification. Indian Standard Institute. Other Specialilised Institutions.Methods of controlling the size of material: There arc two method of controlling as follows: 1) Standardization.Q. 1) Centralized stores :In case of such a store.Q. Standard institutions: Standardization and simplification are the continuous process for controlling the size of materials. independent stores are situated in various departments. these arcs as follows . . Types of stores department: I) centralized stores 2) Decentralized stores 3) Central stores with sub. And various level: A) E. material are received by and issued from one stores department materials kept at one central store. a quantity is determined and this should be kept in stock in sub-store at the beginning of any period . International Organization for Standardization.In the end of a period the storekeeper of each sub-store will requisition from the central stores. Standardization and simplification are the tools of material control to optimize on the number of items and reduce the size of material. so there are many institutions regarding the help of this. 2) Decentralized stores: Under this type of stores. Such types or stores setup to meet the requirements of materials of each production department are not very popular because of the heavy expenditure involved.O.stores. Fixation of KO.
01' two parts. of an item. B Cost of placing an order/. stock level is as follows Minimum level = Re-ordering level-(Normal consumption*Normal Re-order – period . EOQ = 2All I Where: A Annual. Ordering cost or buying cost PCI' unit 1 Inventory carrying cost of one unit C*S(cost per unit*storage cost) a) Minimum Level or safety stock level: It represent the minimum qty.the main (II' determination of minimum level is that . b) Maximum Level: It represents the maximum quantity of an item of material which can be held in stock at any time .the formula of maximum stock level given by WHELDON is as follows Maximum stock level= Reordering level + Re-ordering Quantity-(Minimum Consumption*Minimum Reordering period) '-- .economic order quantity is the point at which inventory carrying cost is equal to order costs E.The decision about how much order has great significance in inventory management . which must be keep in store at all time .Calcu1all' formula of min.the quantity is fixed so that there may bb no overstocking . Carrying cost.Q.O.due to this. production should not be stoped.the quantity should be order neither small nor big because cost of buying and carrying material are very high.this is the quantity of material which can be purchased at minimum costs . is made. Ordering cost.stock should not exceed this quantity . Economic order quantity is the size of the lot to be purchased which is economically ) viable .
c) Average stock level: The average stock level is calculated by the following formula: Average stock level = Minimum stock level + ½ of re-order quantity d) Reordering level:The order is sent before the materials reach minimum stock level. Re-order level = Safety stock + (Average usage *Average re=-order period) OR Maximum consumption * Maximum Re-order period OR Maximum usage * Maximum lead time .
This method is increase the possibility of clerical errors.SAMPLE & TOOLS 1. This method is also useful when transactions arc not too many and price of materials are fairly steady. This method is useful when prices are falling.but in case of rising prices this method is not suitable because the issue price of materials to production will be low . 0 materials received first are utilized first. ['his method is most suitable in times of falling price of materials to jobs or works orders will he high. Disadvantages of FIFO method: . Thus. materials are issued at the purchase price. Under this method.the store ledger clerk will have to go through his record to ascertain the price to be charged. while the cost of replacement of materials will be low . the method recovers the cost price of the materials. materials received first arc issued first. Of utilizing first those materials which arc received first . the units from the first purchase issued next and so on until the units left in the closing stock of materials arc valued at the latest cost of purchases. Closing stock of materials will be valued at the market price as the closing stock under this method would consist of recent purchase of materials.Materials are issued in order of purchases. . Main advantage of FIFO method is that it is simple to understand and easy to operate. . Advantages of FIFO Method: . . so the cost of jobs or work order is correctly ascertained so far as cost of materials is concerned. It is logical method because it takes into consideration the normal procedure.while the cost of replacement of materials will be high. if consignment are received frequently at fluctuating prices as every time an issue of materials is made . .in other words. . First in first out (FIFO) method: Under this method material is first issued from the earliest consignment on hand and priced at the cost at which that consignment was placed in the stores . The units in the opening stock of materials are treated as if they are issued (first. <. .
. LIFO method of pricing issues is suitable materials are issued at the current market prices which arc high . This method is suitable in times of rising prices because material will be issued from the latest consignment at a price which is closely related to the current price levels. this is simple to operate and is useful when transactions are not too many and the prices are fairly steady.e. this method many lead to clerical errors as every time as issue is made. For pricing one requisition more than one price has often to be taken. . Stored ledger clerk will have to go through the record to as certain the price to be charge’.S. . 2) Last in first out method (LIFO) method: The issues under this method are priced in the reverse order of purchase i. till.the issue price does reflect the market price as material are issue from the earliest consignment . comparison between one job and the other job will become difficult because one job started a few minutes after another of the same type many bear are different charged of materials consumed. Like FIFO method. more than one price has often to be adopted. For pricing a single requisition. . . This method is sometimes known as the replacement cost method because materials are issued at the current cost to jobs or work orders except when purchases were made long ago. Like FIFO. This method was first introduced in the U. The stock in hand is valued at price which does not reflect current market price. this method recovers cost from production because actual cost of material is charged to production. When prices rise .therefore the change of production is low because the cost of replacing the material consumed will be higher than the price of issue. .during the Second World War to get the advantages of rising prices Advantages of LIFO Method: ..this method thus helps in showing a lower profit because of increased charged to production during periods of rising prices and lower profit reduces burden of income-tax. Like FIFO. In times of rising prices.. Disadvantages of LIFO Method . .A. the price of the latest available consignment is taken. Like FIFO..
it is proper if the materials arc issued at the average cost of materials in store. 2) Weighted arithmetic average. Simple average price: A price which is calculated by dividing the total of the prices of the material in the stock from which the material to be period could be drawn by the number of the prices used in that total. Average may be of two types: I) Simple arithmetic average. Weighted average price: A price which is calculated by dividing the cost of materials in the stock from which the materials to be priced could be drawn by the total quantity of materials in the stock. .3) A VERAGE COST METHOD: The principle on which the average cost method is based is that all of the materials in store arc show mixed up that an issue can not be made from any particular lot of purchases and. there fore.
OBJECTIVE OF STUDY OBJECTIVE OF STUDY 1. To identify the vertical areas where greater attention is needed for better management.2.2. To make a detailed analysis of the strategies adopted by the company for planning and monitoring costs 3. 4. To find our better plan for company for controlling material. To highlight the policies and procedures of Material cost control 2. .
Market high quality. Guarantee that our customers and consumers come first by actively listening and understanding their quality and value expectations at the points of purchase and consumption. Create a passion for quality where success and achievement are communicated. HEALTH AND SAFETY POLICY At Cadbury PLC. meet approved standards. while continuously improving and exceeding our consumers ‘expectations. Maintain a “right first time” culture that consistently embraces quality and food safety. recognized and celebrated. reinforce our commitment to quality and safeguard the reputation of Cadbury. Work with our supply chain and business partners to assure compliance with our quality policy and systems. health and safety (EHS) management as an integral part of achieving our goal to grow the value of our confectionery and beverages businesses for our shareowners. 2. Place continuous improvement at the heart of our performance enabling us to deliver superior products and service to our consumers and customers. superior value products that consistently meet our specifications and comply with local regulatory requirements. Operate audited quality management systems that continually improve processes to deliver this policy and our standards. ensuring quality throughout our supply chain. 7. Ensure that any representation of our company image. including our products and trademarks. where everyone understands their responsibilities and accountabilities. 8. ENVIRONMENT. 5. 3. 6.PERSONAL POLICIY QUALITY ASSURANCE OF CADBURY 1. we see sound and responsible environmental. 9. We believe that such an approach will generate and sustain significant environmental. social and financial benefits. Assign clear management accountability for setting and meeting measurable goals and targets for quality and food safety. thereby contributing to our objective . 4.
chocolate with Disney characters embossed in it. Provide a safe and healthy environment for our employees. and Cadbury Dairy Milk 2 in 1. Cadbury Dairy Milk has exciting products on offer .of long-term sustainability. but the journey with chocolate lovers in India began in 1948. Communicate with our shareowners. 4.Cadbury Dairy Milk Wowie. 1. PRODUCTION & OPERATION PRODUCT OF MALANPUR FACTROY The story of Cadbury Dairy Milk started way back in 1905 at Bourneville. specifically to cater to the urge for 'something sweet' after meals. 8. U. a . health and safety laws and with our global standards. customers and other interested parties by regularly reporting on our EHS performance and maintaining an open dialogue. Set clear targets for continual improvement in our EHS performance and monitor these targets to ensure that they are met. Strive to prevent pollution and to minimize the environmental costs and impacts of our global operations.K. and regularly assess the compliance of our operations against these requirements. Conduct our business in compliance with environmental. 5. Train and motivate our employees to understand their EHS responsibilities and to participate actively in our EHS programmers 7. Cadbury Dairy Milk Desserts was launched. 3. contractors and other visitors to our sites 6. Maintain and continually improve systems to manage our EHS responsibilities. establishing and ensuring employee accountability for our EHS performance at all levels of the organization. 2. Review and update this policy regularly.. employees. The pure taste of Cadbury Dairy Milk is the taste most Indians crave for when they think of Cadbury Dairy Recently.
joy and celebration. . Over 2. 1 most trusted brand in Mumbai for the 2005 edition of Brand Equity's Most Trusted Brands survey. In the Mid 90's the category was re-defined by the very popular `Real Taste of Life' campaign. shifting the focus from `just for kids' to the `kid in all of us'. Cadbury Dairy Milk alone holds 30% value share of the Indian chocolate market. It appealed to the child in every adult. Giving consumers an exciting reason to keep coming back into the fun filled world of Cadbury. And Cadbury Dairy Milk became the perfect expression of 'spontaneity' and 'shared good feelings'. chocolates were seen as 'meant for kids'. And has participated and been a part of every Indian's moments of happiness.delightful combination of milk chocolate and white chocolate. Our Journey: Cadbury Dairy Milk has been the market leader in the chocolate category for years. In the early 90's. The 'Pappu Pass Ho Gaya' campaign also went on to win Silver for The Best Integrated Marketing Campaign and Gold in the Consumer Products category at the EFFIES 2006 (global benchmark for effective advertising campaigns) awards. During the 1st World War. Today. usually a reward or a bribe for children.000 male employees joined the armed forces and Cadbury sent books. Cadbury Dairy Milk supported the war effort. Did You Know: Cadbury Dairy Milk emerged as the No.
Cadbury's started a series of television advertisements in the United Kingdom and Ireland featuring a person and an animal representing the person's happiness debating whether to eat one of a range of bars including Dairy Milk. including the ad as a bonus selection. In 2004. with slogans such as "a glass and a half of full cream milk in every half pound" and advertisements that feature a glass of milk pouring out and forming the bar. On 9 March 1976. .MARKETING OF CADBURY Dairy Milk has always tried to keep a strong association with milk. radio and television personality Frank Muir. American singer Neil Diamond performed a concert televised throughout Australia during which he did a humorous live commercial for Dairy Milk. This concert. A campaign for the Fruit & Nut variety ("everyone's a fruit and nutcase") was particularly memorable and featured the writer. was released on DVD on 1 July 2008.
it is still in a nascent stage. It remains the UK's biggest selling chocolate brand. in the advert baggage was scattered across the runway. we are almost doing category creation with this launch. being first sold in 1905. Dairy Milk is sold in the United States under the Cadbury label. While the "Taste the Thunder" TV commercial features Akshay Kumar performing acts like mountaineering and roller coaster ride. in India. It features several trucks at night on an empty runway at a Mexican airport racing to the tune of Queen's "Don't Stop Me Now". On 28 March 2008. Cadbury India 2. However. Thus.In 2005. the Gorilla advert was relaunched with a new soundtrack – Bonnie Tyler's "Total Eclipse of the Heart" – a reference to online mash-ups of the commercial. the second Dairy Milk advert produced by Glass and a Half Full Productions aired. Cadbury's original Dairy Milk bar celebrated its 100th birthday. The ad campaign ran at the same time as the problems at Heathrow Terminal 5 with baggage handling. Festive campaigns by Coca Cola and Cadburys news 03 October 2008 Coca Cola has launched a special festive season communication drive of its carbonated drink brand Thums Up. using Bon Jovi's song "Living' on a Prayer".marketing and international business. On 5 September 2008. News Related to Cadbury 1." said Sanjay Purohit. a version of the truck advert appeared. but it is manufactured by the Hershey's company in Pennsylvania. "Dark chocolate is one of the fastest growing categories abroad. Cadburys relaunches Bourneville chocolates news 15 October. a much neglected dark chocolate bar from Cadburys' has been relaunched as a new category of dark chocolates in India. 2008 Bourneville. executive director. the company is also launching a similar initiative for the market . Similarly.
Hong Kong and Australia. In a statement. The initiative comes as a follow-up to the company's announcement of venturing into the 350 ml pack segment of all its major brands. 3. Worm turns for Cadbury news Mohini Bhatnagar 28 November 2003 . the Asian arm of UK confectionery giant Cadbury Plc. Cadbury said it has recalled 11 chocolate products as tests ''cast doubt on the integrity of a range of our products manufactured in China.'' Cadbury said in the statement issued from its office in Singapore. issued from its Singapore office. Cadbury. it’s said. Cadbury and Tamil Nadu Agricultural University join hands for cocoa research project news 30 May 2008 Mumbai: Cadbury Asia Pacific. 4. issued from its Singapore office.in southern states featuring Tollywood star Mahesh Babu. has recalled 11 types of its Chinese-made chocolate as a precaution. In a statement. Cadbury said it has recalled 11 chocolate products as tests ''cast doubt on the integrity of a range of our products manufactured in China. has recalled 11 types of its Chinese-made chocolate as a precaution. others recall China-made confectionery news 29 September 2008 Mumbai: Cadbury Asia Pacific. the Hong Kong government said in a statement.'' 5. the Asian arm of UK confectionery giant Cadbury Plc. the Hong Kong government said in a statement.'' The products were meant for distribution in Taiwan. Tests ''cast doubt on the integrity of a range of our products manufactured in China.
. post the worms controversy in October this year.60 million for the quarter ended 17 June 2001.Hyderabad: The worms in the chocolate bars controversy has hit Cadbury India where it hurts most and that is in sales. The company today faces tough times ahead as the business environment for its chocolates becomes increasingly negative with rising raw material prices and low consumer sentiments. 6. Cadbury India net profit at Rs 190 million news 13 July 2002 Mumbai: Cadbury India Ltd has posted a net profit of Rs 190 million for the quarter ended 16 June 2002 as compared to Rs 93.
Cadbury has traditionally been strong in Europe.STRENGTH & WEAKNESS Strengths • • • Cadbury is the largest global confectionery supplier. . New to the US. where profits can be used to invest in other areas of the business and R&D. unique understanding of consumer in these segments. with 9. whereas other competitors e.9% of global market share. chewing gum. Weaknesses • The company is dependent on the confectionery and beverage market.g. Advantage that it is totally focused on chocolate. • Other competitors have greater international experience . possible lack of understanding of the new emerging markets compared to competitors. nestle have a more diverse product portfolio. established brand name and leader in innovation. Strong manufacturing competence. candy.
4. A plan for national implementation. Indication of support and commitment by the government . A critical mass of local experts to spread the new knowledge and skills throughout the teachers in the country. 5. 2. Necessary knowledge and skills about new learning strategies at all levels. 3.Suggestions 1. Suitable alternative model for in-service training. Accreditation of the current teacher training and staff development programs offered by various providers.
Great Place to Work 2007' Cadbury India' has been awarded the "Bronze Award for Excellence in People Management" in the 'Great Place to Work 2007' survey conducted by Grow Talent Company Limited and Business world. by the Great Place to Work Institute. The award recognizes Cadbury India as a national leader in the area of Human Resource Management. The award recognizes Cadbury India as a national leader in the area of Human Resource Management. 1 FMCG company in India in 2008. Cadbury India received a bronze award at the Cannes Lions International Advertising Festival for partnering with a mobile phone operator in 2005 to provide exam results via SMS to school children. 1 FMCG Company Cadbury India has been ranked as the 7th Great Place to Work and the No.SPECIAL POINT Use of Advertising' No. . Great Place to Work 2007' Cadbury India' has been awarded the "Bronze Award for Excellence in People Management" in the 'Great Place to Work 2007' survey conducted by Grow Talent Company Limited and Business world.
. The Ultra Perk campaign won four Silver Awards in total and the Cadbury Dairy Milk Campaign. Miss Palampur. recognize creative excellence in the Indian Advertising Industry.Gold in the Consumer Products category and Silver in the integrated advertising campaign category. This year Cadbury also sponsored the new 'Young ABBY' Award.Karnataka chapter. ABBY Award wins for India. held in March. The merit was based on 7000 responses from questionnaires and telephone interviews across Asia. The prestigious ABBY awards. Suraksha Puraskar Award – 2005 Cadbury India's Bangalore factory has received the "Suraksha Puraskar" safety award from the National Safety Council .Reader's Digest Award recognizes Bourn vita Bourn vita won the 'Reader's Digest Trusted Brands' Gold Award for the vitamin health supplement category in Indian in 2006. our 'Pappu Pass Ho Gaya' advertising campaign bagged two more awards . also won a Silver Award. Cadbury wins the Effies 2006 At the recent Effie 2006 awards organized by The Advertising Club of Mumbai.
COST . We can’t overstress the importance of our costing tools that provide complete cost estimates at the time of quotation/order entry based on your latest materials. Storage costs 7. Capital costs 6. Risk of obsolescence MATERIAL Material is very important factor for production. Materials refer to all of commodities in the process of manufactures. 5. It is the starting point from which the first operation starts. Risk of price decline 8. Cost accounting isn’t just collecting data for history.INTRODUCTION INTRODUCTION of TOPIC In India we believe that effective communication and availability of information at the right team and time and right place is critical for an edge in business. it includes physical commodities used to manufacture the final end product. an effective IT infrastructure. Until the have been consumed. labor and overhead costs. it is an important tool in predicting and assuring future profitability . In order to achieve this we realize to importance of and have in place. Proper control of material is necessary from the time order of purchase material is placed with supplies. MATERIAL COST CONTROL Material cost control is the management of cost of material it consists of the following.
Material cost has played a very important role in economic condition of company. After analyzing the data I have reached the conclusion that the miscellaneous expenditure of the company has reduced which is good sign and shows the capability of the company in handling wastage. MALANUR” I found that MATERIAL COST CONTROL is an integral part of industrial success..RESULTS & DISCUSSION • • • • During my research in “CADBURY INDIA LTD. For purchasing material we should concentrate on the cost of material through material cost control company can take a top position in corporate market. losses and bad debts. .
This is the 56185. . level 990 1500 stock As such we can get these levels for further items. & Co’s quotation because the lower cost of material. ITEM CODE CC5801008 CC5801009 Re-order level 1290 2700 Max.469 with applying 4% ST & fright. We analysis of three quotations for choosing lower cost of material. How material received in store and how should issue it from the store etc. Raj.D. I have found material cost control management of the company is very sound that’s why their economic position is also very sound. • For economic purchase order of 114 units of MS PIPE. Here we show about the two type of material.DISCUSSION I have found here these below things from analysis of data. level 1700 3600 stock Min. We select the B. • In store material we found these below things from the store keeping receipt. level 540 900 stock Avg. • During my research period. • For issuing the material we found the knowledge through FIFO and LIFO method.
To identify the vertical areas where greater attention is needed for better management. To make a detailed analysis of the strategies adopted by the company for planning and monitoring costs 3. . To highlight the policies and procedures of Material cost control 2. 4.OBJECTIVES OF STUDY OBJECTIVES OF STUDY 1. To find our better plan for company for controlling material.
quality importance etc of stock items. material usage and inventory level variance from hr estimate figure. I suggest through research in this regard to arrive at some suitable mix of both this method which gives due consideration to value.SUGGESTIONS There are some suggestion. • Material should be purchase at the lower cost but also quality should be maintains. • • The maximum and minimum level of each item should be indicated to avoid over-stock or under-stock situation. • • FIFO and LIFO methods should be apply for keeping and issuing the material in stores. . Internal performance report an inventory on at least monthly basis should be prepared to study the material price variance.which may certainly improve the efficiency of material cost control management.
FINANCIAL MANAGEMENT. Ltd. 24th Reprint March 1999/ 2.rediff. Ltd Raipur. Kothari C. Tata MegrawHill publishing com. New Delhi.com .com • www. . WEB-SITE:• www.R. SAHITYA BHAWAN PUBLICATION COM. Shukla SM. Fifth edition 2002. Research methodology (Methods & Techniques).References (Co site ) link retrieved on -----date 1. 3. ACCOUNTING FOR MANAGERS.google. CHANDRA PRASANNA. Wishwa Prakashan.
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