MANAGEMENT ACCOUNTING PRINCIPLES

Maruti Suzuki India ltd. & Bajaj Auto Ltd.

Presentation by
Anusha Harikumar
Anmol Verma
Kartik Agarwal
Kriti Goel
Pranav Khanna
Saptadeep Ghosh
Shubhankar Das
BAJAJ AUTO LTD.
• Bajaj Auto Limited is an Indian organization which produces bikes and three wheelers (auto)
• Set up in Pune, Maharashtra in 1945
• Two-Wheelers: It offers bikes for low segment, sports segment just as premium (super) sports segment.
E.g. Platina, Discover, Pulsar, Avenger, Dominar 400 and CT 100
• Crossed a market capitalisation of ₹1 lakh crore (US$ 13.6 billion), making it the world's most valuable
bike manufacturer
• World's third-biggest producer of bikes and the second-biggest producer in India
• World's biggest three-wheeler producer
• Plants in Chakan (Pune), Waluj (close to Aurangabad) and Pant nagar in Uttarakhand
• Most seasoned plant is at Akurdi (Pune) and houses the R&D focus 'Ahead'
MARUTI SUZUKI INDIA LTD.
• An auxiliary of Suzuki Motor Enterprise of Japan, has been the star of the Indian vehicle market for
over two decades
• Manufacturing offices are situated at two offices Gurgaon and Manesar, south of New Delhi
• More than a large portion of the vehicles sold in India are Maruti vehicles
• Maruti Suzuki offers 12 models, Maruti 800, Omni, Alto, WagonR, Zen Estilo, Swift, Swift Dzire,
Vitara brezza , Swift dzire
• Suzuki's specialized predominance lies in its capacity to pack power and performance into a
reduced, lightweight motor that is efficient and eco-friendly
• Maruti's main goal is to mechanize India
TYPES OF COST
• Cost of Raw Materials and Components Consumed: It is proportional to the units produced or sold and is therefore,
a variable cost.

• Change in Inventory of Finished Goods and Work in Progress: They are directly related to the units produced and
are therefore considered variable costs.

• Employee benefit related Costs: In the short term, the number of employees are usually stable. Therefore, all
employee benefits are considered a fixed cost of the company.

• Advertisement and Marketing expenses: It is considered stable as it does not change every year. Hence a fixed cost.

• Finance costs: These are long-term payments. Therefore, finance costs are considered under fixed costs.

• Depreciation & Amortization Expenses: This is a fixed cost because it repeats for the same amount over the useful
life of the asset

• Other Costs
BREAK EVEN POINT AND MARGIN OF SAFETY:
BAJAJ AUTO LTD (2020-21)

• Revenue for operations of Bajaj Auto Ltd. was Rs. 27,741.

• Cost of goods sold for the same year was Rs. 19,609
• Number of units sold were 39,72,914.
• Contribution margin was 0.002046 in 2021 as compared to 0.001550 in 2020.
• Breakeven Even Point was 1614424 units as compared to 2525096 units in
2020.
• Margin of safety was 59.36% as compared to 56.07% in 2020.
BREAK EVEN POINT AND MARGIN OF SAFETY:
MARUTI SUZUKI INDIA LTD (2020-21)

• Revenue from Operations: Rs 70332.50 Crore

• Cost of Goods Sold: Rs 50817.20 Crore
• Maruti Suzuki India Ltd. sold 1457861 number of units in the year 2021
• Contribution Margin was 0.01339
• Break-even point was 1019279(units), whereas it was 1014827(units) for the
year 2020. It increased by 4452 units.
• Margin of Safety was 30.08%, whereas it was 35.08% for the year 2020.
GENERAL TRENDS (2020-21)
 Material Cost has constantly decreased over the 3 years (2019 to 2021)
across both Bajaj Auto Ltd. and Maruti Suzuki India Ltd.

 Cost Of Goods Sold has constantly decreased over the 3 years (2019
to 2021) across both Bajaj Auto Ltd. and Maruti Suzuki India Ltd.

 Maruti Suzuki India Ltd. has higher costs across all heads and higher
revenues also, however considerable lower Margin of Safety than
Bajaj Auto Ltd.
THANK YOU