PROJECT SYNOPSIS

“A STUDY ON COST CONTROL AND COST REDUCTION TECHNIQUE”

WITH THE REFERENCE TO KARNATAKA FISHERIES DEVELOPMENT
CORPORATION LTD. MANGALURU

Name of the student: Shravan

USN: 4SX18MBA73
Internal Guide: Prof. Pooja Rai
Name of the organization: KFDC.LTD

Department of Business Administration

Sahyadri College of Engineering & Management,
Adyar, Mangaluru.
1. INTRODUCTION

Cost control means costs are regulated within the set parameters. Cost control implies sustaining
cost at a budgeted or some pre-determined level. The function of cost control is to keep the costs
within prescribed limits. The basic objective of cost control is to ensure that actual cost conforms to
the budgeted or pre-determined standards set by the management. Management has to lay down
cost standards or norms for all the elements of cost as well as various segments of activity. Actual
cost has necessarily to be considered element-wise or segment-wise so as to pinpoint any deviation
from standard or norms laid down as benchmark.

Cost reduction simply means bringing down the cost without sacrificing the costs without
sacrificing the utility of the product or service. Cost reduction question the reasons for spending and
try to eliminate wasteful or unproductive expenditure

2.COMPANY PROFILE:
Karnataka Fisheries Development Corporation was started in a year 1970 with the
Authorized share capital of Rs.300 lakhs and paid up share capital is Rs.7.12 lakhs. This company is
registered under the company’s act 1956. This Corporation framed for the development of the
fishery sector and welfare of the fishermen. This Corporation is the most established Corporation in
the State and is pioneer in setting up Cold Chain, promoting of marine fish in the inland cities and
towns of Karnataka. It sells fish and prawns to different nations. Other activities of the Corporation
include. Building of Mechanized boats, deep sea fishing operation, establishment of ice and cold
storages, Pure-seine fish marketing, running of fish canteens and fish stalls. K.F.D.C ltd completed
37 years by providing service to fishermen, supply of value added fish product and fresh fish to its
consumers. In this way it full fills its objectives. The company faces lot of competition over the last
ten years because of obsolete machinery, rigid competition from private sector.
3.OBJECTIVES OF STUDY:

 To identify job costs which are not properly supported

 To Determine the cost components for each billing
And the amount charged for each.
 Enhance the quality of a final audit and decrease the amount of field work required.
 To aims at reducing achieving the overall costs without corresponding loss of efficiency.
4.LITERATURE REVIEW:

Navaneetha Kannan And Sakthivel Murugan(2010), studied on sugar industry from global
perspective. In this study they observed the growth trend in the production, the per capital
consumption had gone up 20kg during the period 2010. It was a healthy condition for the country as
the total sugar exports has also gone up.

Barbole And Yuvaraj (2013), concluded in their study that the customer are cautiously demanding
for the high quality & better products/ service and at the same time they also need the price to fall
down, therefore it is necessary for the company to reduce the cost. The shareholder also will
demand a required rate of return for their investment in the company thus the cost become residual.
The company want to stay ahead of the market by widening the gap between the cost and that of
their competitors thus this study mainly focusses on cost control and cos reduction.

Bana Panciu Et al(2009), stated that the management should make a proper decision in the
controlling of cost in the business and also they should select a better candidate to the better post so
that they are able to manage the business, and try to reduce the cost incurred in the business.

Dr Sanjay Bhayani(2003), in his study he covered 16 public limited cement companies in pvt
sector . he discussed several challenges that the cement industries are facing and suggested that for
the improvement of business and to gain profit the company should adopt a new techniques and also
reduce cost.

Wing (2000) stated that there are two major fundamental financial management tools which include
budgets and variance analyses. Nevertheless, the reports of variance are not necessarily useful for a
manager. When performing variance analyses, the main difficulty is that there is need for cost to be
known as either as variable or fixed cost. Practically, large numbers of costs do not perform in this
manner. It leads to constraints on reports and inadequate management behaviour. The author opined
that financial managers must develop models that will reflect the way cost actually perform, and
reporting the difference through improved cost models. When a system is based on an inadequate
model, this can be used or discarded. But when it is used, it leads to inadequate decisions by the
management.

Sachdev And Umesh Sharna(2006),in their study concluded that the material management of the
company should give special attention in all field to control and cost then the cost can be controlled
and reduced
Rajiv Bhatt (2006) revealed that “the cost overrun happens due to (i) delayed payment from client
or contractor, (ii) delayed supply of materials and decisions, (iii) delayed possession of site, (iv)
inflationary increase in material rates, (v) Revised estimate”.

Dr. Atul Bansal (Bansal, 2014) studied that banks can adopt the effective, practical and
competitive strategies to survive in the high tech banking environment. Cost-benefit analysis is a
standard tool for determining the efficiency of planned projects. However, one of the major
difficulties in risk mitigation investments is that benefits are by nature uncertain. In this context, the
standard approach relying on the average value of benefits may provide an incomplete picture of the
efficiency of the risk mitigation project under consideration. It measures risk of the benefit cost
ratio, thus providing the decision maker with a more complete risk analysis of the net benefits of the
project. But for the efficient management of funds, banks should be given full autonomy and they
should set their benchmark for each type of portfolio separately, according to the market conditions.
He has searched that most successful banks are those that combine visionary technology and very
competitive pricing with strong relationships and brands build on trust with previous in-depth
experience of the client business.

Horngren (Horngren, Datar, & Rajan, 2014) was credited with changing traditional accounting
education in the 1960s "from cost accounting's overwhelming emphasis on accumulation and
calculation of product costs to managerial accounting, which explores the uses of costs for various
purposes," wrote Thomas Burns, a professor at Ohio State University and chairman of the
Accounting Hall of Fame when Horngren was named to the Hall in 1990.

Suresh, Samuel & Vanniarajan (Suresh, Samuel, & Vanniarajan, Jan-June 2007) in their
study of Cost Analysis in Cooperative Sugar Mills in Tamil Nadu analyzed that without control
over the sugar cane purchase price and sale price, sugar mills were to focus on the cost incurred
during the time of production and the efficient recovery of sugar to reduce the losses. Effective cost
control methods and improved recovery of sugar will increase the profitability and improve
performance of the sugar mills. In order to improve the recovery of sugar and to control the costs
this study makes an attempt to, analyze and observe the trends in various cost elements among
cooperative sugar mills and to analyze the break-even recovery of sugar in cooperative sugar mills.
From the study it is established that performance of co-operative sugar mills in Tamil Nadu is very
poor in comparison to international sugar industries. This is due to sugar mills do not have effective
control over the cost incurred during the production and low recovery of sugar from the sugarcane
crushed. It was suggested that new techniques must be used such as activity based costing. This will
improve the productivity and increase the profitability.
RESEARCH METHODOLOGY

Research Methodology is a method of collecting data and information relevant to the project. It's a
systemized way of getting knowledge and learning new things their relations and casual explanation
and the natural laws which governs them. Research Methodology is a "Systemized effort to gain
new knowledge".

Research Methodology is original contribution to the existing stock of knowledge making for its
advancement. It is the purist of truth with the help of study.

Observation, Comparison and Experiment. In short also covers the systematic method of finding
solution to a problem is research. It also covers the systematic approach concerning generalization
and the formulation of the theory. Different stages involved in research consists of enacting the
problem, formulating a hypothesis, collecting the facts or data, analyzing the facts and reaching
certain conclusion either in the form of solution towards the concerned problem or in
generalization for some theoretical formulation.

Collection of data was done by using questionnaire. A number of questions were typed in a definite
order and this set of questions were given to respondents, who were expected to read and
understand the questions on their own and answer in the space provided in the questionnaire itself.

In Research Methodology Mainly Data plays an important role.

(a) Primary Data is the data, which is collected directly by direct personal interview, interview,
indirect oral investigation, Information received through local agents, drafting a schedule,
drafting a questionnaire.

(b) Secondary Data is the data, which is collected from the various books, magazine and
material, reports, etc. The data which is stored in the organization and provide by the HR people
are also secondary data. The various information is taken out regarding that subject as well other
subject from various sources and stored.
REFERENCE

Anthony, Robert N., and Vijay Govindarajan. Management Control Systems. Chicago: Irwin, 1997.

Cooper, Robin, and Robert S. Kaplan. The Design of Cost Management Systems. Upper Saddle
River, NJ: Prentice Hall, 1998.

Cooper, Robin, and Regine Slagmulder. "Micro-Profit Centers." Management Accounting, June

1998.

Hamilton, Martha M. "Who's Chainsawed Now? Dunlap Out as Sunbeam's Losses

Mount." Washington Post, 16 June 1998. Rotch, William, et al. Cases in Management Accounting
and Control Systems. 3rd ed. Englewood Cliffs, NJ: Prentice Hall, 1995.

Shank, John K., and Vijay Govindarajan. Strategic Cost Management. New York: Free Press, 1993.

Wing, K. T. (2000). Using enhanced cost models in variance analysis for better control and decision
making. Management Accounting Quarterly, 27-35.