A Project Report

ON Costing system followed by a hotel

MET INSTITUTE OF MANAGEMENT, BANDRA

e-MBA Division: B Batch: 2013-15

In partial fulfilment of e-MBA Under the esteemed guidance of: Prof. L N Chopde

PROJECT REPORT SUBMITTED BY Ruchi Kedia-57 Vaibhavi Shah-78 Sayali Mahadik-62 Yash Ghatalia-82 Yash Adukia-84 Roank Sangani-56 Viraj Shah-81

CERTIFICATE This is to certify that project titled Costing System followed by a hotel is based on original study conducted by following e-MBA -2013-2015 ,B-division students Under the guidance Of Prof. LN Chopde and this had not formed a basis for award of any other degree of this institute/university.

Date: __________ Faculty Signature: ________ MET INSTITUTE OF MANAGEMENT, BANDRA

CERTIFICATE FROM THE ORGANIZATION

This certificate that Mr/Mrs____________ has /have successfully completed a study on Costing System followed by a hotel and has/have submitted the project report on the same. The study conducted was satisfactory. We wish them all the best.

Date:______ Signature:_____

ACKNOWLEDGEMENT

We would like to thank our Professor.LN Chopde who gave us the opportunity to make this project on Costing System followed by a hotel through which we have gained valuable information on the topic and also for helping and supporting all through the project.

I would like to thank a lot of people without whose co-operation and support working on this project would not have been so pleasurable and interesting.

I would like to thank , Mr.Bunty of Sartaj Hotel and Apartments and my friends for helping and making the project successful. These acknowledgements are one way where we can actually thank the people who have been instrumental in the making of this project. With their help the project was done with ease.

TABLE OF CONTENTS

Introduction Objectives. Contents of Costing Profitability Statement. Conclusion Bibliography

EXECUTIVE SUMMARY This project is based on costing system followed by a hotel wherein the information was collected from Sartaj Hotels Apartment and Villas and the data was compiled after studying and understanding their costing system.

We have also collected secondary data from various other sources like reference books and internet. OBJECTIVE

To study the costing system followed by Sartaj Hotels Apartment and Villas.

INTRODUCTION Sartaj Hotels Apartment and Villas is one of the well known hotel and is based out in Delhi. Mr. Maan Singh is the owner of the Sartaj hotel. They have been in the hotel business for the last 10 years. Facilities provided by the hotel includes rooms and suites, restaurant & bar and a banquet hall.

Address: 37-38, Community Centre, East of Kailash, South Delhi, Delhi, India.

Contents of costing

Item

Optimum Year-2009-10 Fixed Cost Variable Cost (Rupees in Lacs)

Food & Beverages Power & Fuel Wages Insurance @ 2 % of Gross block Depreciation Administrative Cost Interest Prel. Exps Written off Total Manpower Cost Per Annum Telecommunication Expenses Repair and Maintainace Cost (Rs. In lacs) Rooms & Suites Banquet hall Restaurant & Bar Laundry & linen Expenses Total Expenses(Cost to hotel)

0.00 1.75 43.06 90.64 155.31 10.14 0.00 33.81

642.11 70.08 215.29 113.30 00 23.67 0.00 33.81 405.76 3

2369.66 87355.28 339.90 2 90399.55 1509.02

DETAILS OF COST OF FURNITURE AND FIXTURES

Sr. No. 1

Particulars

No.

Cost in Rs. Estimated cost Rs. In Lacs 8000.00 4000.00 2000.00 4000.00 3000.00 7000.00 2000.00 4000.00 6000.00 4000.00 10000.00 4000.00 5000.00 7000.00 3000.00 5000.00 4.40 2.20 1.10 2.20 1.65 3.85 1.10 2.20 3.30 2.20 5.50 2.20 5.50 7.70 3.30 2.75 51.15 12.50 4.50 5.00 2.50 1.00 25.50 1.60 0.50 0.50 2.60 3.50 7.50 5.25 5.00 2.50

Rooms Beds Head Board Bed Side Corner Dressing Table Study Table & Chair Sofa Set Cofee Table TV Cabinet Cup Board Teak Wood Scating TV Set Fancy Lights Doors & Windows Mattress Mirrors Linen & Curtain Sub Total Banquet Hall Carpet Furniture Light Fitting Channel Music & Sound System Other Fitting Sub Total Suites Bed & Other Accessroies Televisions Oher Equipments Sub Total Restaurant & Bar Interior Furniture Crockery Kitchen Equipments Deep Freezer

55 55 55 55 55 55 55 55 55 55 55 55 110 110 110 55

1 1 1 1 1

1250000.00 450000.00 500000.00 250000.00 100000.00

2 4 2

80000.00 12500.00 25000.00

1 1 1 1 1
9

350000.00 750000.00 525000.00 500000.00 250000.00

5 6 7

Water Cooler Ice Cube Maker Audio/Video System Sub Total Air Conditioning Interior Designing Interior Designer Fee Total Cost of Furniture & Fixtures

1 1 1 63297 47473

50000.00 200000.00 250000.00 250.00 800.00

0.50 2.00 2.50 28.75 158.24 379.78 30.00 676.02

10

PROFITABILITY STATEMENT (Rs in Lacs) 2008200909 10

Particulars SALES Receipts Total - (A) COST Repair and Maintaince Food & Beverages Power & Fuel Wages Insurance @ 2 % of Gross block Depreciation Sub Total ADMINISTRATIVE COST Administrative Exps. @ 2% of Sales Sub Total Prel. Expenses written off Total Cost - (B) Profit before Interest - (A-B) Interest - Term Loan Sub Total Profit before tax Tax Net Profit Cash Profit Cumulative Cash Profit Dividend Rate Dividend Retained Profit

200607

200708

201011

201112

2012-13 1690.68 1690.68

617.44 1353.79 1522.23 1690.68 1690.68 1690.68 617.44 1353.79 1522.23 1690.68 1690.68 1690.68

147.15 26.21 153.00 40.26 43.62 58.50 468.73

319.30 61.32 160.65 84.55 47.62 136.31 809.75

396.34 65.70 168.68 88.77 49.62 145.81 914.93

481.80 70.08 177.12 93.21

524.07 70.08 185.97 97.87

566.33 70.08 195.27 102.77

604.22 70.08 205.03 107.90 57.62 183.81 1228.67

51.62 53.62 55.62 155.31 164.81 174.31 1029.14 1096.43 1164.38

12.35 12.35 2.35 483.43 134.00 71.25 71.25 62.75 0.00 62.75 123.60 123.60 0.00% 0.00 62.75

27.08 27.08 2.35 839.18 514.61 138.94 138.94 375.67 78.07 297.60 436.26 559.86 5.00% 35.23 262.37

30.44 30.44 2.35 947.72 574.51 114.00 114.00 460.51 119.10 341.41 489.58

33.81 33.81

33.81 33.81

33.81 33.81

33.81 33.81 2.35 1264.84 425.84 3.56 3.56 422.28 138.35 283.93 470.09 3074.33 10.00% 70.46 213.48

2.35 2.35 2.35 1065.31 1132.59 1200.55 625.37 85.50 85.50 539.87 154.80 385.07 542.73 558.09 57.00 57.00 501.09 150.04 351.05 518.21 490.13 28.50 28.50 461.63 144.44 317.19 493.85

1049.44 1592.17 2110.38 2604.24 5.00% 10.00% 10.00% 10.00% 35.23 70.46 70.46 70.46 306.19 314.61 280.60 246.74

The study of cost sheet has showed following features:

11

Simplicity: its very simple so that an average man can understand the functions. Suitability: it is devised in such a manner that suits even a small scale hotel Flexibility: it is flexible, so that in case of any changes required from time to time in the business are made possible. Comparable: The records maintained are easily comparable with other year records. The past records must serve as a basis to guide the future. Control: An effective way of control system is implemented over material, labour and overhead cost as it is helpful minimize the wastage of material, labour and overhead costs. Effective wage system: There is proper timing schedule for workers for the time the spent on different jobs in order to prepare the wages. Reconciliation: The system of cost accounting must be capable of being reconciled with financial accounting so as to check the accuracy of both the system of accounting. i.e. Financial and cost accounting. On top of all the above, the duties and responsibilities of a cost accountant should be defined in advance in a structured manner.

12

CONCLUSION Therefore from the above data, we can conclude that the hotel needs to make optimum utilization of all their resources and should concentrate on marketing activities and they need to develop an identifiable, unique position in the market so as to increase their profitability in the domain of hospitality sector.

13

BIBLIOGRAPHY Finance & Cost Accounting by L N Chopde

http://zatse.in/numbers/new-delhi-ncr/Sartaj-Hotels-Apartment-And-Villas-Pvt-Ltd-in-SouthDelhi-East-Of-Kailash-EOK-328767

14