Professional Documents
Culture Documents
GAURAV KAPOOR – 27
ANEESHA NAGAVEKAR – 37
JAYNESH PAREKH – 40
HANIF PARMAR – 41
PRANAY PASAD – 42
ACKNOWLEDGEMENT
Since its inception in 1959, Pidilite Industries Limited has been a pioneer in
consumer and specialities chemicals in India. Over two-third of the company’s
sales come from products and segments it has pioneered in India.
Our product range includes Adhesives and Sealants, Construction and Paint
Chemicals, Automotive Chemicals, Art Materials, Industrial Adhesives, Industrial
and Textile Resins and Organic Pigments and Preparations. Most of the products
have been developed through strong in-house R&D.
The Group's turnover is about US $ 350 Million for the year 2006-07.
In a recent report by Economic Times, Pidilite ranked 131st amongst the top 500
listed companies in India.
Pidilite is also growing it's International presence through acquisitions and setting
up manufacturing facilities and sales offices in important regions around the
world. Fevicol is now the largest selling adhesives brand in Asia.
We have reached where we are today mainly due to the close team-work of our
employees and due to our shared value system which emphasizes commitment to
excellence, closeness to customers, and the spirit of innovation.
We hope you find your association with the Pidilite Group fruitful and satisfying.
B. K. Parekh,Chairman.
FEVICOL MR
Used in activities like collage making, bread crafting, papier-mâché & other craft
techniques.
Packing
Used for bonding most plastics, rubber, ceramic, metal and porous materials like wood, leather.
Used for repairing broken plastic parts, joining footwear, leather articles, making ‘O` rings.
Bonds in an instant.
Withstands temperature from -40°c to 90°c.
Clog resistant nozzle, preventing wastage.
Packing
Applications:
Synthetic Resin Adhesive used for bonding wood, plywood, laminates, veneers, particle boards, block board/hard board &
MDF to each other. Ideal for woodworking.
Packing
Synthetic Resin Adhesive with a superior resistance to water, Fevicol Marine could be used for bonding wood, plywood,
laminates, veneers, particle boards, block board/hard board & MDF to each other.
Fevicol Marine is a specialised water resistant adhesive that protects furniture from water.
Its special chemical properties give superior bonding with marine (BWP) ply to laminate.
48-hour continuous cold water resistance.
1-hour boiling water resistance.
Packing
Synthetic Resin Adhesive with faster drying time, Fevicol Speedx could be used for bonding wood, plywood, laminates,
veneers, particle boards, block board/hard board & MDF to each other.
Packing
Fevicol WRA is India`s 1st Wood Reiforced adhesive. It could be used for bonding wood, plywood, laminates, veneers,
particle boards, block board/hard board & MDF to each other.
Packing
We visited the company on 6th of August and met Mr. B.O.Mehta, Sr.President of Pidilite Ind. Ltd. His subordinate
Mr. Subharthi Majumdar guided and explained us the costing methods of the company. Their manufacturing unit is situated
in Himachal Pradesh.
Company manufactures various types of adhesives for eg; fevicol, fevi kwik, fevi stik, Dr. Fixit etc. Company has
different departments on the basis of products. We have mainly focused on fevicol department. Fevicol department includes
different types of fevicol such as fevicol MR, fevicol SH, fevicol Marine, Fevicol SpeedX, fevicol WRA.
The main processes involved in manufacturing these products are mixing of various chemicals in the appropriate
proportions. After mixing, packing is the next major process. Main costs incurred by the company are raw material cost(RM)
and packing material cost(PM). Other costs such as manufacturing cost, factory cost, marketing cost, selling and distribution
cost etc have a very negligible effect on the cost of the product. As no heavy machinery is involved in production, factory
expenses such as power, labour, maintenance and repairs are automatically cut down. For eg, let us assume the cost of the
product is Rs. 60, then approximately RM cost and PM cost contributes to Rs. 52-55.
EXCISE DUTY
Excise forms a negligible part for the cost of the product. Since manufacturing plant is situated in Himachal Pradesh
which is excise free state, excise on sales is exempted. Excise is levied on purchases that the company pay according to the
state’s respective rates.
FREIGHT
The company includes inward freight in the cost of the product whereas outward freight is merged in financial
accounts. Freight is allocated on the basis of weight or volume of the product.
EQUALIZATION DISCOUNT
Every state has different tax rates, due to this the cost incurred by retailers of different states also differs. Hence to
maintain standard profit margin , the company offers equalization discount.
The company offers discount on invoices in case of bulk purchases. These come under non equalization discount.
CREDIT NOTE
The company issues credit notes to its suppliers incase of return of goods.
SCHEME DISCOUNTS
Pidilite sets targets for scheme discounts on the basis of previous years records and future budgets. Company takes
precautions to avoid crossing the targets set.
WE ACQUIRED THE FOLLOWING INFORMATION ABOUT THE COMPANY’S COSTING METHODS FROM
MR. SUBHARTHI MAJUMDAR (COST DEPARTMENT HEAD)
Ans: The company follows manufacturing production of adhesives, which includes Fevicol, Fevikwik, Fevistik and
many more. The company does not carry job/batch/uniform costing method. It has its own method of costing based on
adhesives.
Ans: Earlier the company maintained its records through mere paper work. But now according to cost record rules, records are
maintained through computerized system.
The company does follows a specific costing method called the Weighted Average Costing method.
Q3.Does the company have a separate cost department? Or are all the cost records are merged on the financial
records?
Ans: The Pidilite company has a separate cost department where it maintains its costing records. At the end of the year the cost
records are merged with the financial records.
Ans: The company gets its orders according to SKU’s i.e stock keeping units. Every product of Pidilite like Fevicol has
different quantity packs
Example:- 50gms, 125gms, 500gms, 1kg, 5 kg, 50kg.These are knows as SKU’s.
Q5.How does the company find out the cost per unit(CPU) ?
Ans: The company maintains cost records on monthly basis. It calculates its cost per unit by Weighted Average Costing
method.
Q6.What is the base of overhead allocation?
Ans: The main cost incurred is raw material cost and packing material cost. Other expenses such as manufacturing cost,
marketing cost, selling and distribution cost are very less as compared to RM cost and PM cost. Because manufacturing of
these products requires only mixing of various components and no other processes are involved. Hence RM cost forms the
major part of product cost.
As very less expenses are incurred, there is no question of overhead allocation.But if any expenses incurred are apportioned on
the basis of sales.
Q7.Do they have any proceeses or stages in production? If less how do they calculate cost of product i.e. do they
calculate total cost directly or do they find out cost of each stage or process?
Ans: There are not much processes involved in the production. Mixing forms major part in production, sometimes followed by
pre heating of mixtures. Hence calculating cost at various stages is not possible.