A

PROJECT REPORT
ON

COST SHEET ANALYSIS

Submitted By:

Varun .C. Salian

(MMS- 2ND SEM, DIVISION B, ROLL NO. 106)

Submitted As a Requirement for Internal Assessment

MMS-Semester-II (2010), University of Mumbai

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 ACKNOWLEDGEMENT

I take immense pleasure and satisfaction in presenting the report on “Cost Sheet
Analysis of.” This project was performed as part of the curriculum in the subject “COST &
MANAGEMENT ACCOUNTING” for the MMS course in Bharati Vidyapeeth’s Institute of
Management Studies & Research. I take this opportunity to acknowledge all the people who
have contributed to this project's involvement.

I acknowledge with deep sense of gratitude the support given by Professor Mr. Govind
Shinde who encouraged me to take such a challenging endeavor. I express my sincere
acknowledgement to the authority for providing me with good environment, library resources
and facilities to complete this project. It gave me an opportunity to learn more about Cost &
Management Accounting. This project was definitely a positive learning experience.

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 TABLE OF CONTENTS

SR. NO TITLE PG. NO

1. Introduction 04

2. Objectives of Study 06

3. Research Methodology 07

4. Cost Sheet 08

5. Conclusion 10

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 INTRODUCTION

COST represents a sacrifice of values, a foregoing or a release of something of value. It

is the price of economic resources used as a result of producing or doing the thing costed. It is
the amount of expenditure incurred on a given thing. Cost has been defined as the amount
measured in money or cash expended or other property transferred, capital stock issued, services
performed or a liability incurred in consideration of goods or services received or to be received.
By cost, we mean the actual cost i.e. historical cost. ICWA (UK) defines cost as the amount of
expenditure (actual or notional) incurred on, or attributable to a specified thing or activity. The
object for which the cost is to be determined can be a product or service

Cost Sheet
For determination of total cost of production a statement showing the various elements of
cost is prepared. This statement is called as a ‘statement of cost’ or ‘cost sheet.’ Cost sheet is a
statement, which provides for the assembly of the detailed cost of the total cost of job operation
or order. It brings out the composition of total cost in a logical order, under proper
classifications and sub-divisions. The period covered by the cost sheet may be a week, a month
or so. Separate columns are provided to show the total cost and cost per unit. In case of multiple
products a separate cost sheet may be prepared for each product. Alternatively, separate columns
of total cost and unit cost may be provided for each product in the same cost sheet. A cost sheet
is prepared under output or unit costing method.
Cost sheet is a statement, which shows various components of total cost of a product. It
classifies and analyses the components of cost of a product. Previous periods data is given in the
cost sheet for comparative study. It is a statement which shows per unit cost in addition to Total
Cost. Selling price is ascertained with the help of cost sheet. The details of total cost presented in
the form of a statement are termed as Cost sheet.

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 ADITYA BIRLA GROUP

A US$ 30 billion corporation, the Aditya Birla Group is in the League of Fortune
500. It is anchored by an extraordinary force of 130,000 employees, belonging to 30 different
nationalities. In the year 2009, the Group was ranked among the top six great places for leaders
in the Asia Pacific region, in a study conducted by Hewitt Associates, RBL Group and Fortune
magazine. In India, the Group has been adjudged the best employer in India and among the top
20 in Asia by the Hewitt-Economic Times and Wall Street Journal Study 2007.

Over 60 per cent of the Group's revenues flow from its overseas operations. The
Group operates in 25 countries - India, UK, Germany, Hungary, Brazil, Italy, France,
Luxembourg, Switzerland, Australia, USA, Canada, Egypt, China, Thailand, Laos, Indonesia,
Philippines, Dubai, Singapore, Myanmar, Bangladesh, Vietnam, Malaysia and Korea.

About UltraTech Cement

Ultratech Cement was incorporated in 2000 as Larsen & Toubro. Later it was
demerged and acquired by Grasim and was renamed as Ultra Tech Cement in 2004. UltraTech
Cement Limited has an annual capacity of 18.2 million tonnes. It manufactures and markets
ordinary portland cement, portland blast furnace slag cement and portland pozzalana cement. It
also manufactures ready mix concrete (RMC). The Aditya Birla Group is the 11th largest cement
producer in the world and the seventh largest in Asia.

The company exports over 2.5 million tonnes per annum, which is about 30 per cent
of the country's total exports. The export market comprises of countries around the Indian
Ocean, Africa, Europe and the Middle East. Export is a thrust area in the company's strategy for
growth. UltraTech Cement is the country’s largest exporter of cement clinker. UltraTech
Cement Limited has five integrated plants, six grinding units and three terminals — two in India
and one in Sri Lanka. UltraTech’s subsidiaries are Dakshin Cement Limited and UltraTech
Ceylinco (P) Ltd.

For the year, on a consolidated basis, net sales were INR 71,750.7 million for year
ended March 2010 against INR 65,636.4 million for the year ended March 2009. Net Profit was
INR 10,952.0 million for the year ended March 2010 against INR 9,780.6 million for the year
ended March 2009.

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 OBJECTIVES OF STUDY

The Main Objective of the Project is to study and analyze the “Cost incurred for
production” The specific objectives include:
 To study the cost incurred at various stages of production.

 To find pattern of expenditure incurred.

 To study the profitability of the company.

 To analyse the data related to cost and its management.

 To find average expenditure incurred during the period.

 To study pricing related to each activity in the company.

 Use the pattern and average expenditure to find out cash requirement for future.

 To find out efficiency of the manufacturing unit of the company.

 To compare cash requirement of future with cash available and with cash inflow from
which expenditure will be met.

 To reduce wasteful expenditure incurred on unnecessary or avoidable things.

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 RESEARCH METHODOLOGY

Research methodology is, a way to systematically solve the research problem. It may be
understood as a science of studying how research is done. In this we study the various steps (the
research process) that are generally adopted by a researcher in studying his research problem
along with the logic behind them. The basic steps in this research are as following:

1. Define the problem.

2. Research design including sample design.

3. Collection of data.

4. Analysis of data.

5. Interpretation and report writing.

For my research I have used secondary data that includes material available from
company’s website.

SECONDARY DATA:

Secondary data has been used for completing the project. The brief history of company
and how the company work and about its growth was collected from the respective websites and
contacts. Also brochures were helpful in preparing the project.

The sources of secondary data are: -

 Balance Sheets

 Annual Reports

 Reference Books

 Internet

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 COST SHEET OF ULTRA TECH CEMENT
Units Produced : 17.15 Mntn, Yr- 08/09
Particulars Amount Amount Total Cost per
(Rs. in Cr) (Rs. in Cr) (Rs. in Tonne(In
Cr) Rs. )
Direct Material
Opening stock of Raw materials 12.74
Add: Purchase 403.68
Closing stock of Raw materials -23.43 392.99 229.15

Direct Wages 34.86

Direct Expenses :
Consumption of stores, Components and Packing 295.88 172.5
materials
PRIME COST 723.73 422
Add: Works Overheads
Power and Fuel Consumed 1138.32
Hire Charges: Plant and Machinery 5.78
Repairs to Plant and Machinery 56.22
Repairs to Buildings 5.82
Other Repairs 16.56
Depreciation:
-Leasehold Land 0.55
-Railway 7.49
-Plant and Machinery 188.21
-Jetty 1.75
-Building 11.6
R&D 6.03
Obsolescence 6.7 1445.03 842.58

Opening WIP 105.97

Closing WIP -75.6 30.37 1475.4 17.83
WORKS COST 2199.13 1282.29
Add: Office Administration

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Insurance 11.17
Rent 9.67
Rates & Taxes 16.03
Stationery , Printing & Communication exp 8.68
Travelling and conveyance 19.09
Legal and Professional fees 15.51
Director fees 0.18
Office Salaries 52.3
Power 1.53
Misc Expenses 28.93
Depreciation on Furniture 5.99
Depreciation on Office Building 2.91
COST OF PRODUCTION 2371.12 1382.7
Opening Stock of Finished goods (3.14 lakh 59.84
tonne)
Add: Purchase 182.43
Less: Closing Stock -59.45 182.82
COST OF GOODS SOLD 2553.94 1445.35
Add: Selling & Distribution
Commission paid to Distributors and Selling 11.57
agents
Freight and Handling Expenses 1013
Advertising and Sales promotion 74.88
Depreciation on Vehicles 1.07 1100.52 622.82
COST OF SALES 3654.46 2068.17
PROFIT 1829.89
NET SALES 5484

CONCLUSION

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 To conclude it can be said that by analysing the expenditure pattern of the company for
production under various heads and categories will surely help in making decisions regarding
future expenses. Cost sheet and the analysis can help to analyse the profitability of the company
and what further steps can be taken to improve it. This study will also ensure learning that I got
from conducting depth analysis of the company’s expenditure. It will also help to meet all the
objectives set and work towards fulfilment of each one of those.

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