COST ACCOUNTING

GROUP MEMBERS
NAME KHAN ARIF HUSSAIN MAKATI HOZEFA SALMIN MANGA SHAINILA MULLA NIHARIKA KUMARI BASIM PARKAR ROLL 27 30 31 39 41 42

Meaning of cost

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.

CLASSIFICATION OF COST
Cost classification is the process of grouping costs according to their common features. Costs are to be classified in such a manner that they are identified with cost center or cost unit.

Fixed Cost Variable Cost Semi-variable Cost

PROFILE OF TATA STEEL

founder; Jamsetji Nusserwanji Tata., that on 27th

February, 1907. Tata Steel Limited -Bombay House, MUMBAI. Backed by 100 glorious years of experience in steel making. It is listed in Fortune 500 Company. World ranking stands 5th position. Turnover in FY 11 rose 17.5% to 29,396 crores (US$6.59 billion) from 25,022 crores (US$5.61 billion) in FY 10 Current chairperson of TATA GROUP is Mr. CYRUS MISTRY.

VISION OF THE COMPANY

PLANT LOCATION & LAYOUT

Located at Jamshedpur
Easy availability of resources Water Iron coal Other essential resources.

Tata Steel - Product Profile

Steel

Hot Rolled Coils and Sheets Cold Rolled & Galvanised Coils & Sheets Wire Rod Coils Rebar's and Light Structural's Forging Quality Steels Semis Precision tubes Black/Galvanised tubes Ball bearings

Tubes

Bearings

Tata Steel - Product Profile

Engineering Equipment

Steel plant equipment Non-ferrous plant equipment Material handling equipment

Rings and Agrico

Bearing Rings Automotive forgings Agricultural implements

Cost sheet

COST SHEET FORMAT Particulars Opening Stock of Raw Material Add: Purchase of Raw materials Add: Purchase Expenses Amount *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** Amount

Less: Closing stock of Raw Materials Raw Materials Consumed Direct Wages (Labor) Direct Charges Prime cost (1) Add :- Factory Over Heads: Factory Rent Factory Power Indirect Material Indirect Wages Supervisor Salary Drawing Office Salary Factory Insurance Factory Asset Depreciation Works cost Incurred

Cost sheet

Particulars Add: Opening Stock of WIP Less: Closing Stock of WIP Works cost (2) Add:- Administration Over Heads:Office Rent Asset Depreciation General Charges Audit Fees Bank Charges Counting house Salary Other Office Expenses Cost of Production (3) Add: Opening stock of Finished Goods Less: Closing stock of Finished Goods Cost of Goods Sold

Amount *** ***

Amount

*** *** *** *** *** *** *** *** *** *** *** ***

Cost sheet
Particulars Add:- Selling and Distribution OH:Sales man Commission Sales man salary Traveling Expenses Advertisement Delivery man expenses Sales Tax Bad Debts Cost of Sales (5) Profit (balancing figure) Sales Amount *** *** *** *** *** *** *** Amount

*** *** ***

Raw materials

Cost sheet of Tata steel

Cost Sheet for Tata Motors for the year 2011-2012:

Rs./ Crores
Direct Materials (a) Spare parts & accessories for sale (b) Bodies & trailers for mounting on chassis Direct Labour Direct Expense Prime Cost Factory Overheads Consumption of Raw Materials Processing Charges Stores, spare parts & tools consumed Freight, transportation, port charges Repairs to plant, machinery Power & Fuel Insurance Lease Rentals in respect of Plant & Machinery Depreciation Work Cost(Gross) 253.55 214.43

467.98 323.00 2270.30 3061.28

7873.41 388.59 236.73 185.47 25.62 214.52 21.44 8.84 382.60 9337.22

Opening WIP Less: Closing WIP Works Cost(Net) Administrative Overheads Salaries Repairs to building Rent Rates & Taxes Total Cost Add: Opening Finished Goods Add: Purchase of Finished Goods Less: Finished Goods Cost of production of Saleable units Selling and Distribution Expenses Publicity Incentive/Commission to dealers Commission & Brokerage on sales Cost of Sales Profit Sales

793.91 651.93 9479.20

323.99 20.37 9.37 22.16 375.89

141.98 12540.48

12916.37

12916.37 123.60 120.57 25.92 270.09

13186.46 2022.28 15208.74

Assumptions:
The salaries & wages are divided in the ratio of 1:1 such

that 323 crores is allocated to the factory direct labour & 323.99 crores is allocated to the office administration.

Freight & stores consumed are factory expenses. Repairs to building are an administrative expense as the building is

used for the office.

Rent, Rates & Taxes are administration expenses.

Following items are excluded from the cost sheet

Product development cost is a capital expenditure hence not considered. Interest being a financial expense is not considered. Extraordinary items like write back of provision for contingencies, provision

for diminution in vale of investment & employee separation cost not considered.
Provision for tax, investment allowance & the other appropriations in profits

are not considered in arriving at cost.

Superannuation, gratuity & contribution to provident fund. Workmen & staff welfare expenses, which includes provisions for employee

benefit schemes, is not considered.

Following items are excluded from the cost sheet

Provision for Wealth Tax. Excess debits/ short credits in respect of previous years.

Loss on assets sold/scrapped/written off.

Provision for doubtful sundry debts, bad debts written off, warranty

expenses & securitization expenses for hire purchase contracts.

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