INSTITUTE OF TECHNOLOGY AND MANAGEMENT

COST ACCOUNTING (201)

PROJECT BASED LEARING (PBL)
2ND SEMESTER
TOPIC : COST SHEET OF BAJAJ AUTO

SUBMITTED TO : SUBMITTED BY :
Ms. RAKHI SHUKLA JATIN DHINGRA
BBA-1ST YEAR (SEC. - B)
ROLL NO. : BBANIMG22259
 INTRODUCTION
Bajaj Auto, the flagship company of Bajaj Group, is a two-
wheeler and three-wheeler manufacturing company that
exports to 79 countries across several countries in Latin
America, Southeast Asia, and many more. Its headquarter is
in Pune, India.It has acquired 48% of the KTM Brand which
manufactures sports and super sports two-wheelers, which
was 14% in 2007 when the company first acquired KTM. With
more than 18 million motorcycles sold in over 70 countries,
the Bajaj brand is truly ‘The World’s Favourite Indian’. It is
India’s No.1 motorcycle exporter with two out of three bikes
sold internationally carrying a Bajaj badge. The company is
also the world’s largest manufacturer of three-wheelers. Bajaj
Auto is the first two-wheeler and three-wheeler company in
the world to have reached a market capitalisation of INR one
trillion and continues to be the world’s most valuable two and
three-wheeler company.
 ABOUT BAJAJ AUTO
Brand ReputationIt is the world's fourth-largest manufacturer of motorcycles. It is
also the largest manufacturer and seller of 3-wheelers globally. Segment
PerformanceMileage Segment (100cc to 125cc) - This segment consists of
products like Bajaj CT, the Platina, and the Pulsar 125. It accounts for by far the
highest unit-wise sale of motorcycles in India. In FY22, the market share in this
segment improved from 15.2% in FY21 to 17%. [3]Sports Segment (150cc to
220cc)- This segment consists of products like Pulsars ranging from 150cc to
220cc, the Avenger, and the Dominar.In FY22, its volume fell by 33%, and the
market share in the segment reduced from 28% in FY21 to 23% in FY22.
[4]Probiking Segment- This segment comprises 2 brands namely KTM and
Husqvarna. There are 9 models of KTM and 2 variants of Husqvarna. KTM Sales in
India dropped by ~19% in FY22. Scooter Segment- The Co. re-introduced ‘Chetak’
as a best-in-class electric scooter in 2021. In FY22, it sold ~8,100 units and
increased the touchpoints to 20 locations. [5]Three-Wheelers Segment- In FY22,
the domestic sales of three-wheelers increased by 47%, and the domestic market
share increased by ~11 percentage points to 61.5%. Four-Wheeler Segment- It
launched its first quadricycle, Quote in FY19. It has sold 942 vehicles in FY20 and
has tied up with uber to increase sales in Bangalore markets.
 Geography-wise Revenue breakup FY22Domestic- 47%Exports- 53%
International BusinessIn FY22, the Co. surpassed the 2.5 million vehicle
milestone. Motorcycle exports grew by 22% and the sports motorcycle
portfolio grew by 24%. It exported 200,000+ units every month in 10 out of
12 months. Exports represented 36.9% of Bajaj Auto's net sales in
FY2017. It exceeded 50% to record 52.7% of net sales in FY2022. No
Indian automaker comes close to this percentage. [8] [9] The Co.’s market
share grew by 2% point in all regions- LATAM, Africa, South Asia, and the
Middle East and ASEAN. [10]New SubsidiaryIn October 2021, the Co.
formed a new subsidiary ‘Chetak Technology Limited’ to effectively
engage in the EV Segment. Multiple PlantsIt has three manufacturing
facilities across India, 1 each at Waluj, Chakan, and Pantnagar with a total
capacity of 6.6 Million Vehicle p.a in FY22, which was 6.06 Million Vehicle
p.a in FY15 New Manufacturing FacilityThe Co. has drawn up plans to set
up a new state-of-the-art manufacturing facility at Akurdi. It's subsidiary
Bajaj Auto (Thailand) Ltd. is setting up a new facility in Bangkok which
will commence operations in FY23. R&DThe Company Spent 1.5% of its
Revenue on R&D in FY22 [16]FocusThe Co. is focusing on the EV space
by intending to house all its EV-related activities such as R&D of new
technologies, R&D for product development, manufacturing, sales, after-
sales, and customer-centric experience to the newly formed 100%
subsidiary ‘Chetak Technology Limited’.
 INTRODUCTION OF COST
SHEET
A cost sheet is a statement that
shows the various components of total cost for a
product and shows previous data for
comparison. You can deduce the ideal selling
price of a product based on the cost sheet.
A cost sheet document can be prepared either by
using historical cost or by referring to estimated
costs. A historical cost sheet is prepared based
on the actual cost incurred for a product. An
estimated cost sheet, on the other hand, is
prepared based on estimated cost just before the
production begins.
 Importance and objectives of
cost sheet
Cost sheets help with a number of essential business processes:
 Determining cost: The main objective of the cost sheet is to obtain an
accurate product cost. It gives you both the total cost and cost per unit of a
product.
Fixing selling price: In order to fix the selling price of a product, you need to
create a cost sheet so you can see the details of its production cost.
 Cost comparison: It helps the management compare the current cost of a
product with a previous per unit cost for the same product. Comparing the
costs helps management take corrective measures if costs have increased.
 Cost control: The cost sheet is an important document for a manufacturing
unit, as it helps in controlling production costs. Using an estimated cost
sheet aids in monitoring labour, material and overhead costs at each step of
production.
 Decision-making: Some of the most important
decisions management makes are based on the cost sheet. Whenever a
business needs to produce or buy a component, or quote prices for its goods
on a tender, managers refer to the cost sheet.
 Components & elements of
total cost
Components of total cost are constituted mainly of prime cost,
factory cost, office cost and cost of sales. Let us take a detailed
look at each of these elements:
1. Prime cost: This comprises direct material, direct wages, and
direct expenses. It is also called basic cost, first cost, or flat cost.
It can be defined as an aggregate of the price of the material
consumed, the wages involved in production, and the direct
expenses.
Prime cost = Direct material + Direct wages + Direct expenses
Direct material cost usually refers to the cost of raw materials used
or consumed during a given period. To calculate the amount of raw
material actually consumed during a given period, you add the
opening stock and the amount of material purchased, and deduct
the closing stock. Here is the formula for material consumed:
Material consumed = Material purchased + Opening stock of
material – Closing stock of material
 2. Factory cost: This is made up of prime cost plus factory overhead, which includes
indirect wages, indirect material and indirect expenses. Factory cost is also known as works
cost, production cost, or manufacturing cost.

Factory cost = Prime cost + Factory overhead

3. Office cost: This is also called administration cost or total cost of production. Office cost
is equal to factory cost plus office and administration overhead.
4. Total cost or cost of sales: This is the sum of the total cost of production and the total of
selling and distribution overhead.

Total cost = Cost of goods sold + Selling and distribution overhead

In the production process, some units of a product are scheduled to be finished at the end
of a period. Such incomplete units are called work-in-progress. In such situations, while
calculating the factory cost of a product unit, it is necessary to make adjustment for opening
and closing stock to arrive at net factory cost of the product. Generally, the cost of these
unfinished units include direct material, direct expenses, and factory overheads.
Besides this, the adjustments for inventories need to be made in the following manner
1. Direct material consumed = Opening stock of direct material + Purchases of direct
material – Closing stock of direct
2. Works cost = Gross works cost + Opening work in progress – Closing work in progress
3. Cost of production of goods sold = Cost of production + Opening stock of finished goods
– closing stock of finished goods
COST SHEET OF BAJAJ
AUTO
THANK YOU