NIRANI SUGARS:

INTRODUCTION:
The Nirani sugar mill was originally established as a khandasri sugar factory of 1250 TCD in
the year 1997-98. The co gen unit at the Nirani sugar plant is the best example of Wealth
from Waste. The factory Has established a co gen unit which produces electricity from
bagasse. The unit takes care of the power needs of the rural population and also supplies
about 9 crore unit of the power to the status grid
ELEMENTS OF COST
Elements of cost mean the essential parts or components of goods or service or jobs. In other
words, elements of cost are part of the total cost and include the main item of expenditure
incurred for production of goods, services and jobs.

Analysis and classification of cost

Cost is the amount of expenditure incurred for production of goods and services. Thus cost is
composed of three elements, viz, material, labor, and expenses.

Classification of cost
Cost classification is the process of grouping costs according to their common features or
characteristics. Classification is essential to find out the cost of production.

Element wise classification

Cost classified on the basis of element wise is as follows
1. Material cost
2. Labor cost
3. Expenses

Material Cost:
This is the cost of commodities supplied to an undertaking.(I.C.M.A) Materials are
further divided in to two parts (1) Direct materials (2) Indirect materials.

1) Direct materials: Direct materials are those materials which can enter into and
form of the finished product. Direct materials cost is the which can be conveniently
identified and allocated to cost units.
 2) Indirect Materials: Indirect materials are those materials which cannot be
conveniently identified with cost units.

Labor cost:
These are costs of remuneration, such as wages salaries, commission, bonus etc. Of
the employees of an undertaking

1) Direct wages: Wages paid to laborers who are directly engaged in converting raw
materials into finished products. It is also called Direct Labor, Productive Labor,
and Prime cost.

2) Indirect Labor: Indirect labor is not directly engaged in the production of goods
but only to assist or help in production of goods or services.

Expenses:
The expenses means the cost of services provided to an undertaking and the notional
cost of the use of owned assets. In other-words costs other than the material and labor are
called expenses.

Direct Expenses: Direct expenses are those expenses which can be specifically incurred in
connection with a cost unit. E.g. hire of special plant for a particular job.

Indirect expenses: Indirect expenses are those expenses which cannot be directly identified
with a particular job.

Overheads:
An overhead includes indirect material, indirect labor, and indirect expenses. In
general terms, overhead comprise all expenses incurred for in connection with the general
organization of the whole or part of the undertaking that is the cost of operation supplies and
services used by the undertaking and including the maintenance of capital assets. The main
groups into overheads may sub divided are as follows.
 LITERATURE REVIEW:

STATEMENT OF COST SHEET OF NIRANI SUGARS LTD

Particulars 2006-2007 2007-2008 2008-2009
Purchase of raw material 130,0585,00 172,548,000 215,068,000
Closing raw material - - -
Raw material consumed 130,058,500 172,548,000 215,068,000
Freight inwards 13,005,850 18,395,725 24,032,400
Prime cost 143,064,350 190,943,725 239,100,400
Factory over heads 9,180,600 15,972,950 23,730,000
Depreciation on building 1,000,000 1,5000,00 2,000,00
Depreciation on machinery 1,200,000 1,7000,00 2,200,000
Depreciation on electricals 250,000 300,000 350,000
Work cost 154,694,950 210,416,675 267,380,400
Office over heads 1,530,100 2,381,850 3,744,000
Depreciation on computer 50,000 60,000 70,000
Depreciation on office equipments 150,000 2000,00 300,000
Cost of production 156,485,050 213,058,525 271,494,400
Opening stock of finished goods 1,534,065 3,928,720 4,149,800
Less: closing stock of finished 4,090,840 8,839,620 17,337,000
goods
Cost of goods sold 153,928,275 208,147,625 258,307,200
Selling over heads 3,763,937 4,140,990 13,868,850
Cost of sales 157,692,212 212,288,615 272,176,050

Analysis of cost sheet:

Prime cost:
The prime cost in 2006-2007 143,064,350 and in 2007-2008 it was increased to 190,943,725
and 2008-2009 it was increased to 239,100,400. This cost is increase to year by year.

Work cost:
The work cost in 2006-2007 154,694,950 and in 2007-2008 it was increased to 210,416,675
and 2008-2009 it was increased to 267,380,400.

Cost of production:
The cost of production in 2006-2007 156,485,050 and in 2007-2008 it was increased to
213,058,525 and 2008-2009 it was increased to 213,058,525.

Cost of goods sold:

The cost of goods sold in 2006-2007 153,928,275 and in 2007-2008 it was increased to
208,147,625 and 2008-2009 it was increased to 258,307,200.

Cost of sales:
The cost of sales in 2006-2007 157,692,212 and in 2007-2008 it was increased to and in
212,288,615 2008-2009 it was increased to 272,176,050.

Findings:
1. The increasing prime cost is because of is increasing material consumed by the company.
2. The work cost is increasing by year to year because in factory over heads also increasing.
3. The cost of production is to increasing because office overheads and depreciation of
office equipments.
4. The cost of goods sold is high increasing in year to year.
5. The cost of sales year by year due to increasing in sales.

BIBLOGRAPHY: