Introduction

The steel industry is a vital component of the Indian economy,

playing a crucial role in the country's growth and development. As
a key sector, it contributes significantly to India's GDP and
provides employment opportunities to millions of people. The
industry is characterized by intense competition, with several major
players competing for market share.

This assignment aims to prepare and compare the cost sheets of

two leading steel manufacturers in India, Tata Steel and Jindal
Steel. By analyzing their cost structures, we can gain insights into
their competitiveness, identify areas of efficiency, and understand
their strengths and weaknesses. The comparison will provide
valuable information for investors, analysts, and other stakeholders
interested in the Indian steel industry.
STATEMENT OF COST OF TATA STEEL FOR THE YEAR 2022-23
PARTICULARS Rs. TOTAL PER UNIT
AMOUNT

1.MATERIAL CONSUMED
:
83,511
Iron Ore 14,399
Coking Coal 2,500
Limestone 1,500
Ferro Alloys 1,000
Scrap Metal 40,909
Other Raw Materials
1,43,819 5,895

2.DIRECT LABOR
Production Workers 10,000
Wages
Overtime Pay 1,500
Benefits and Allowance 2,919
14,419 591

3 DIRECT EXPENSE
Power and Fuel 6,411
Water Charges 5,00
Direct Manufacturing 1,000
Expenses
7,911 324

4.PRIME COST 1,66,149 6,810

5.FACTORY
OVERHEADS
Indirect materials costs 1,000
Indirect wages 2,000
Factory Rent And 5,00
Insurance
Repairs and 1,500
maintenance
Factory Utilities 1,000
Depreciation of plant and 5,000
machine
Factory management 2,000
salaries 13,000 533

6.WORK COST 1,79,149 7,343

 7 ADMINISTRATIVE
EXPENSES
Office Staff Salaries 1,500
Office Rent 5,00
Office Utilities 5,00
Printing and Stationary 2,00
Legal and Professional 5,00
Fees
3,700 152

8. COST OF 1,82,849 7,495

PRODUCTION

9.SELLING &
DISTRIBUTION
OVERHEADS
Sales Staff Salary 1,000
Advertisement 5,00
Transportation Expenses 1,000
Warehouse Cost 5,00
Sales Commission 5,00
3,500 143

10.COST OF SALES 1,86,949 7,662

11.PROFIT 57,610 2361

12 SALES 2,43,959 9998.9

TOTAL UNITS : 2,44,00,000

NOTE: The figures are based on the audited financial statement of TATA STEEL for FY
2022-23.
STATEMENT OF COST OF JINDAL STEEL FOR THE YEAR 2022-23
PARTICULARS Rs. TOTAL COST PER UNIT

1 MATERIAL CONSUMED
:
44,191
Iron Ore 8,439
Coking Coal 1,500
Limestone 9,00
Ferro Alloys 6,00
Scrap Metal 24,309
Other Raw Materials 79939 4,319

2.DIRECT LABOR
Production Workers 6,000
Wages
Overtime Pay 9,00
Benefits and Allowance 1,719
8,919 466

3 DIRECT EXPENSE
Power and Fuel 4,211
Water Charges 300
Direct Manufacturing 600
Expenses 5,111 276

4.PRIME COST 93,669 5,061

5.FACTORY
OVERHEADS
Indirect materials costs 600
Indirect wages 1,200
Factory Rent And 300
Insurance
Repair and maintenance 900
Factory Utilities 600
Depreciation of plant and 3,000
machine
Factory management 1,200
salaries
8,100 438

6.WORK COST 1,01,769 5,499

7 ADMINISTRATIVE
EXPENSES
Office Staff Salaries 900
 Office Rent 200
Office Utilities 200
Printing and Stationary 100
Legal and Professional 200
Fees
2000 108

8. COST OF 1,03,769 5,607

PRODUCTION

9.SELLING &
DISTRIBUTION
OVERHEADS
Sales Staff Salary 600
Advertisement 200
Transportation Expenses 600
Warehouse Cost 200
Sales Commission 200
2,100 114

10.COST OF SALES 1,05,869 5,721

11.PROFIT 29,090 1572

12.SALES 1,34,959 7,295

TOTAL UNITS :18500000

NOTE: The figures are based on the audited financial statement of JINDAL STEEL AND
POWER LIMITED for FY 2022-23.
Here's a comparison of the Jindal Steel and Tata Steel cost sheets:

Comparison of Jindal Steel and Tata Steel Cost Sheets

The cost sheets of Jindal Steel and Tata Steel reveal several
similarities and differences. Both companies have similar cost
structures, with direct material costs being the largest component
of their total costs.

However, there are significant differences in the absolute values of

their costs. Tata Steel has higher direct material costs (₹143,819
million vs. ₹79,939 million), direct labor costs (₹14,419 million vs.
₹8,619 million), and factory overheads (₹13,000 million vs. ₹8,100
million). This is likely due to Tata Steel's larger production capacity
and higher sales revenue.

On the other hand, Jindal Steel has lower administration overheads

(₹2,000 million vs. ₹3,700 million) and selling and distribution
overheads (₹2,100 million vs. ₹3,500 million). This could be due to
Jindal Steel's more efficient administrative and marketing
processes.

In terms of cost per unit, Tata Steel has higher costs across all
categories, except for administration overheads. This suggests that
Tata Steel may be facing higher production costs due to various
factors such as higher raw material prices, labor costs, or
inefficiencies in its production process.
Conclusion
The comparison of the Jindal Steel and Tata Steel cost sheets
reveals that while both companies have similar cost structures,
there are significant differences in their absolute costs and cost per
unit. Tata Steel's higher production costs may be due to various
factors such as higher raw material prices, labor costs, or
inefficiencies in its production process. On the other hand, Jindal
Steel's lower administration and selling and distribution overheads
suggest that it may have more efficient administrative and
marketing processes. This analysis can be useful for investors,
analysts, and other stakeholders who want to understand the cost
structures of these two major steel companies in India.