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An evaluating study of standard costing technique At Kisan mouldings limited
INTRODUCATION
TO FINANCE
The word finance is derived from the Latin word finis. Finance is commonly refereed as the
lifeblood of business. It is one of foundations on which modern business is built. Finance refers
to the activity concerned with finance lays a crucial role in nearly all asects of business! in
today"s money critical economy. Almost all activities involve some form of financial
transactions.
MEANING
Finance refers to that function of a business that is resonsible for the rocurement of funds andtheir eventual utili#ation of funds in the business. $oward and u to have defined finance
administrative area or administrative set of functions in an organi#ation which relates to the
arrangement of cash and credit so that the organi#ation may have the means to carry out its
ob%ectives as satisfactory as ossible finance in general refers to the rovision of money at the
time it is required.
Definitions of Finance:
According to &rather ' (ert )usiness Finance deals rimarily with raising
administering ' disbursing funds by rivately owned business units oerating in non*
financial fields of industry.
According to $.+.+athman ' $.,.-ougall )usiness Finance can be broadly
defined as the activity concerned with lanning! raising! controlling ' administering of
funds and in the business.
Scope of finance:
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An evaluating study of standard costing technique At Kisan mouldings limited
The scoe of business finance is so wide as to cover the financial activity of a business
concern right form its incetions to its growth and eansion and in some cases to its
winding u also. )usiness finance usually deals with financial lanning as racticed by
business firms can called as business finance.
Role of Finance:
The role of finance in the business world is largely to hel transfer and mediate the
movement of money from investors to businesses that need it. Finance ma/es this ossible
through the financial mar/ets ' the investment vehicles available to both investors '
businesses.
Finance is the lifeblood and nerve center of a business! %ust as circulation of blood is
essential in the human body for maintaining life. Finance is very essential to smooth
running of the business. It has been rightly termed as universal lubricant that /ees the
enterrise dynamic. 0o business! whether big! small or medium can be started without an
adequate amount of finance. 1ight from the very beginning!
i.e.! conceiving an idea to business! finance is needed to romote or establish the business!
acquire fied assets! ma/e investigations such as mar/et survey etc.!
-evelo roducts! /ee men and machine at wor/! encourages managements to
ma/e rogress and create values. Thus the imortance of finance cannot be over*
emhasi#ed and the sub%ect of finance has become utmost imortant both to the
academicians and racticing managers.
DEFINITION AND MEANING OF COSTING:
According to (heldon!2osting is the classifying! recording and aroriate allocation
of eenditure for the determination of costs of roducts or services and for the resentation of
suitably arranged data for uroses of control and guidance of management
The institute of cost and management accountants 3I24A5 London defined costing as
the technique and rocess of ascertaining costs.
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An evaluating study of standard costing technique At Kisan mouldings limited
From the above definitions it is clear that costing is the rocess or the rocedure followed
for the ascertainment of the cost of a roduct! service or %ob! and the rinciles and rules which
govern the rocess of ascertainment of cost.
MEANING AND DEFINITION OF COST ACCOUNTING:
According to I24A 6 The alication of accounting and costing rinciles! methods '
techniques in ascertainment of costs ' the analysis of savings ' of ecesses as comared with
revious eerience or with standards.
2ost accounting is the classifying! recording and aroriate allocation of eenditure for
the determination of costs of roducts or services! and for the urose of reresentation of
suitably arranged data for control and guidance of management. 2ost accounting includes the
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An evaluating study of standard costing technique At Kisan mouldings limited
ascertainment of total cost that is value of material used! the amount of labour and other
eenses incurred.
According to (eldon 2ost accounting is the alication of accounting and costing and
costing rinciles! methods and techniques in the ascertainment of costs and the analysis of
savings or ecess cost incurred as comared with revious eerience or with standards.
1.5 SCOPE OF COST ACCOUNTING:
The scoe of cost accounting is very wide and includes the following7
A Cost asce!tain"ent:
2ost ascertainment deals with collection and analysis of eenses! the measurement of
roduction of the different stages of manufacture a lin/ing u of the roduction with the
eenses.
# Cost acco$ntin%:
2ost accounting is the rocess of accounting for cost! which begins! with recording of
eenditure and ends with the rearation of statistical data.
C Cost cont!ol:
2ost control is the guidance and regulation by eecutive action of the costs of oerating
an underta/ing. It aims at guiding the actual towards the line of targets! regulates the actual if
they deviate or vary from the targets.
1.& O#'ECTI(ES OF COST ACCOUNTING:
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An evaluating study of standard costing technique At Kisan mouldings limited
8b%ectives of the cost accounting are ascertainment of cost! fiation of selling rice!
roer recording and resentation of cost data to management for measuring efficiency and for
cost control.The aim is to /now the methods by which eenditure on materials labour and
overheads are recorded accurately ascertained9 this cost may be related to sales and rofitability
may be determined. The main ob%ectives of cost accounting are as follows7
To ascertain cost er unit of the different roducts manufactured by a business
concern.
To rovide a correct analysis of cost both by rocess or oeration and by different
element of cost.
To rovide requisite data and serve as a guide to rice fiing of roducts
manufactured or services rendered.
To ascertain the rofitability of each of the roduct and advice management as to
how these rofits can be maimi#ed.
To advice management on future eansion olicies and roosal caital ro%ects.
To suly useful data to management for ta/ing various decisions such as
introduction of new roducts! relacement of labour by machine.
1.). AD(ANTAGES OF COST ACCOUNTING:
The advantages of cost accounting are has been followed as under7
1eveals rofitability and unrofitable activities.
$els in cost control.
$els in decision ma/ing.
+uides in fiing selling rices.
$els in inventory control.
Aids in formulating olicies.
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An evaluating study of standard costing technique At Kisan mouldings limited
$els in cost reduction.
1eveals idle caacity.
2hec/s the accuracy of financial accounts.
&revents frauds and maniulation.
1.*. +IMITATIONS OF COST ACCOUNTING:
It is eensive and requires reconciliation with financial accounts.
It is alicable to trading concerns and small firms.
2ost data have no usefulness in themselves. They become useful only in the right
of the information received. That means! the success of cost accounting deends uon the ability
and willingness of the management to ta/e roer decision.
It is true cost accounting suffers from the above limitation never less. It is a
valuable aid to the management.
1.,. INSTA++ATION OF COST S-STEM:
The installation of a cost system requires careful consideration of a number of factors.
The eisting organi#ational structure should be studied and efforts should be made to adotcosting system without disturbing it.
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Cost data
Standard
Costing
Budgetary
Costing
MarginalCostingAbsorption costing
ni!or" costing
#ob costingProcess costing
Batc$ costing%actory &obcostingnit costing 'perating cost
An evaluating study of standard costing technique At Kisan mouldings limited
METODS AND TECNI/UES OF COSTING :
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'peration
costing
Contractcosting
Multiply
costing
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TECNI/UES OF COSTING :
Techniques of costing are useful for the secific urose of control of olicy in any
business irresective of methods of costing. The following are main techniques of ascertaining
the cost.
Unifo!" Costin%
:niform costing is the use of same costing rincile or ractices by underta/ing of
common control or comarison of cost
Ma!%inal Costin%
4arginal costing is the ascertainment of marginal cost by differentiating between fied
and variable cost. This is so because marginal costing regards only variable cost o roducts.
(hereas fied cost is transferred to costing rofit and loss account.
isto!ical Costin%
$istorical costing is the ascertainment of casts after they have been incurred. It aims at
ascertaining costs actually incurred on wor/ done in the ast.
Di!ect Costin%
-irect costing is the ractice of charging all the direct costs! variable cost and fied cost
regarding to oerations rocess or roducts leaving all other costs to be written off against
rofits in which they arise.
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An evaluating study of standard costing technique At Kisan mouldings limited
A0so!ption Costin%
Absortion costing is the traditional method of costing where by total cost ;fied and
variable< relating to oerations! rocess or roducts. This different from marginal costing
were fied cost are ecluded.
Stana! Costin%
=tandard costing is the redator*mined cost of ascertaining want the roduct should cost
is redetermined as target of erformance is measured against the standard.
#$%eta!2 Costin%
2losely allied to standard costing is the technique of budgetary control. A budget is an
eression of a firm"s lan in financial form and budgetary control is techniques alied to
the control of total eenditure on material! wages and overhead by comaring actual
erformance with lanned erformance.
STANDARD COSTING:
DEFINITION:
According to 2I4A3London5! standard costing is a control technique which comares standard
costs and revenues wiyh actual results to obtain variances which are used to stimulate imroved
erformance. :se of standard costing is not confined to industries having reetitive rocesses
and homogeneous roducts only. This techniquehas established the advantage of its use in
industries having non heavy electrical equiment. 1eetitive rocesses li/e manufacture of
automobile! tubines! boilers and heavy electrical equiment.
=tandard cost is li/e a modle! which rovides basis of comarisionn for actual cost. This
comarision of actual cost with standard cost reveals very useful information for cost control.
O#'ECTI(ES OF STANDARD COSTING:
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An evaluating study of standard costing technique At Kisan mouldings limited
o To rovide a formal basis or assessing erformance and efficiency.
o To control cost by establishing standards and analysis variance.
o To assist in setting budgets.
o To standard cost are readily available substitutes for actual average unit costs and can
be used for stoc/ and rogress valuation.
o To rovide basis for estimating costs.
1.13 APP+ICATION OF STANDARD COASTING :
The alicability of standard casting requires certain cost to be fulfilled.
They are9
a. A sufficient volume of standards roducts should be roduced.
b. 4ethods! oeration and rocesses should be caable of standardi#ed.
c. A sufficient number of costs should be of being controlled.
1.15 STANDARD COSTING AND #UDGETING :
The ob%ectives of both standard cost and budgetary control is to achieve efficiency and
cost reduction by establishing standards! thus although both are useful tools they differ in
following asect.
o =tandards are set mainly for roduction and roduction eenses where as budgets are
comiled for all items of income and eenditure. $ence! budgeting is broader.
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An evaluating study of standard costing technique At Kisan mouldings limited
o )udgets are ro%ection of financial account and budgetary control aims at overall
efficiency where as standard costing are at ro%ection of cost accounts.
o
)udgets are anticiated or eected cost where as the standard costs do not show whatthe costs are eected to be! but rather what the cost should be.
o )udgets set u maimum limits of eenses above which the actual eenditure should
not eceed. =tandards set u targets! which are to be attained by actual erformance.
P!eli"ina!ies to t4e esta0lis4"ent of stana! costin%:
>. ,stablishment of cost centre7 a cost centre should be established for fiing
resonsibilities of unfavourable variances.?. Tyes of standard7 There are three tyes of standards there are
2urrent standard7 standard! which is related to current condition and is established for
used over a short eriod of time. This standard may be defined on the basis of ideal
standard or eected standard.
)asic standard7 It is a standard! which is established for use unaltered over a long eriod
of time. This standard is fined for long eriods so as to hel forward lanning.
0ormal standard7 such standard are established on the basis of average estimated
erformance over a future eriod of time. )ut normal standards may not useful device for
the urose of cost control.
$istorical costing7 It is the aascertainment of costs after they have been incurred! it has a
limited utility although it ermits comarison of costs over different eriods.
-irect costing7 It is the ractice of charging of all direct costs to %obs. 8erations and
rocessed leaving all indirect cost to be charged to rofit and loss account of the eriod in
which they arise.
Absortion costing7 It is the ractice of charging all costs both variable and fied to %obs!
oeration! or rocesses.
)udgetary control7 )udgetory control is lanned to assist the management in the
allocation of resonsibilities and authority to aid in ma/ing estimates and lans for future
to assist in analysis of variation between estimates and actual result! and to develo basis
measurement or standard with which to evaluate the efficiency of oerations.
AD(ANTAGES OF STANDARD COSTING:
The following are the advantages of standard costing system
1. :se of standard costing leads to otimum utili#ation of men! materials and resources.
. Its use rovides a yardstic/ for comarison of cost erformance.
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6. 8nly distinct deviations are reorted to management. Thus! it hels alication of the
rincile of management by ecetion.
3. It is very useful to management in discharging functions! li/e lanning! control!decision ma/ing and rice fiation.
5. It creates an atmoshere of cost consciousness.
&. It motivates wor/ers to strive for accomlishment of defined targets.). It highlights areas! where robe romises imrovement.
*. Its introduction leads to simlification of rocedures and standardi#ation of roducts.
,. Its introduction enables the management to reduce time required for rearation ofreorts for ricing! control or quotation uroses.
17. Its use enables to find out the cost of finished goods immediately after comletion
11. Its use may encourage action for cost reduction.
+IMITATIONS OF STANDARD COSTING:
1. ,stablishment of standards may demand a lot of s/ill! imagination and eerience. If all
these factors are not in harmony! desired results will not be forthcoming.
. @ariance analysis is useful! whereas deviations are lin/ed with resonsibilities.
=ometimes ! it is difficult to fi resonsibility! because the result haens to be theoutcome of a number of contributory factors.
6. =tandards should corresond to current conditions for best results. 2urrent conditions
charge very raidly. 1evision of standard is a costly eercise and leads to a lot ofassociated roblems. For this reason revision of standard may get ignored. This delay
may be disastrous for effectiveness of the system.
3. It is difficult to use standard costing! when wor/ing conditions do not ermit
standardi#ation of material contents! labour contents or the use of indirect servicesrelating to different %obs! rocesses and services.
5. Lac/ of interest by aroriate level of management renders the use of standard costingineffective.
&. =ometimes! use of standard costing creates adverse sychological effects! if standards are
set at a high level.
(ARIANCES ANA+-SIS
T4e comarison of actual erformance reveals the variances. A variance reresents a deviation ofthe actual result from the standard result. There can be cost variances! rofit variances! sales
value and oerational and lanning variances. (hether a variances is favorable or unfavorable! is
ultimately determined with reference its imact on rofit.
For eamle! a cost variance will be adverse! if the actual cost eceeds the standard cost or vice
versa.
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An evaluating study of standard costing technique At Kisan mouldings limited
@A1IA02,= A0AL=I= =$$8:L- ), A 280TI08:= &182,== F81 F8LL8(I0+
1,A=807
>. Labor rates! salary levels etc.! changes due to union negotiations! olicy decisions orchanges in comosition of the wor/ force.
?. =elling rice change.B. In a multi*roduct comany! roduct mi changes and different lines have different
margins9 the overall rofit osition will change.C. Imrovement in systems can bring about reduction in costs.
D. 2hanges in level of efforts of oerators! suervisors! management and clerical staff can
affect the eisting cost levels.E. Investment in new caital equiment and scraing of old equimentrocessesmethods
can affect the oerating cost levels i.e.! direct labor cost and indirect material cost5. These
decisions! which are frequently ta/en in an organi#ation! can effect overhead items suchas dereciation charges and insurance remium.
G. The rices of bought out material may vary.
H. 2hanges in roduct may changes cost units.. &olicy decisions of various /inds! for eamle in organi#ational structure! may affect cost
levels.
>J. The amount of idle time may changes due to holdus! stri/es loc/outs and ower failure.
2LA==IFI2ATI80 A0- 284&:TATI80 8F @A1IA02,=.
For the urose of classification and comutation variances can be discussed under the followingheadings
In cost accounting! variance is very imortant to evaluate the erformance of comany for
increasing its efficiency. In variance analysis! we comare actual and standard cost and revenueto /now whether it is favorable or unfavorable. Favorable variance 3F5 shows that standard cost
is less than actual cost or standard revenue is more than actual revenue. )ut unfavorable or
adverse 3: or A 5 variance shows that actual cost is more than standard cost or actual revenue is
less than standard revenue. Tyes of variance are the stes to dee study of variance. (e classify
variance with following ways.
1:Direct Material Variance
-irect material variance shows the difference between the actual cost of material of actual units
and standard cost of material of standard units. It is also the total of material rice variance!
material quantity variance. If there is favorable material quantity variance and unfavorable
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An evaluating study of standard costing technique At Kisan mouldings limited
material rice variance or vice*versa! direct material cost may be either favorable or unfavorable
because it is total of material rice and material quantity variance.
: +a0o! (a!iance
Labor variance shows the variance of labor cost. It is the difference between standard cost of
labor for actual roduction and the actual cost of labor for actual roduction.
6: Overhead(a!iance
8verhead @ariance shows the variance of all indirect cost. It is the difference between standard
cost of overhead for actual outut and actual cost of overhead for actual outut.
3.Sales(a!iance
=ales variance is that tye of variance which shows the difference between actual sales andstandard sales. )ut in unfavorable sales variance! our standard sale is less than actual sale. =ales
variance is good way to calculate the resonsibility of sales deartment.
STANDARD COST (ARIANCES:
A variance is the difference between the actual cost incurred and the standard cost against which
it is measured. A variance can also be used to measure the difference between actual and
eected sales. Thus! variance analysis can be used to review the erformance of both revenue
and eenses.
A rate variance 3which is also /nown as a rice variance5 is the difference between the actual
rice aid for something and the eected rice! multilied by the actual quantity urchased. The
rate variance designation is most commonly alied to the labor rate variance! which involves
the actual cost of direct labor in comarison to the standard cost of direct labor. The rate variance
uses a different designation when alied to the urchase of materials! and may be called
theurchase rice varianceor the material rice variance.
Volume variance.
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A volume variance is the difference between the actual quantity sold or consumed and the
budgeted amount! multilied by the standard rice or cost er unit. If the variance relates to the
sale of goods! it is called the sales volume variance. If it relates to the use of direct materials! it is
called the material yield variance. If the variance relates to the use of direct labor! it is called
the labor efficiency variance. Finally! if the variance relates to the alication of overhead! it iscalled the overhead efficiency variance.
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An evaluating study of standard costing technique At Kisan mouldings limited
2$A&T,1 ?
TITL, 8F T$, =T:-7
An evaluating study of standard costing technique with secial reference to Kisan mouldings
limited.
=TAT,4,0T 8F T$, &18)L,47
2ost accounting is very imortant and ever growing disciline in any organi#ation.A roer cost
accounting system is essential for ascertaining and controlling cost. Imroer imlementation of
costing technique will increase the wastages and increase the efficiency in erformance.
Therefore roer and efficient use of standard costing technique will enable cost control and
avoid the wastages and increase the efficiency in erformance.
This ro%ect is concerned with a study on standard costing technique with reference to Kisan
moulding comany! to identify the areas of wastages and facilitate better control of cost.
=coe of the study
>. It is a continuous rocess having different variances li/e lanning! cost! sales! rofit and
oerational.
?. It covers most imrovement remises.B. =tandard costing hels in decision ma/ing and cost control with the hel of actual and
standard cost sheet.
C. The variance between actual and standard cost sheet hels in analy#ing the overall
efficiency of the firm.
D. This technique hels in analy#ing financial strengths and wea/ness of an enterrise.
8),2TI@,= 8F T$, =T:-7
>. To study and analyses the costing system in eistence at /isan mouldings limited.?. To study and analyses the standard costing technique adoted at /isan moulding limited.
B. To ma/e suitable suggestions based on the study.
C. To control costs by establishing standard and analysis of variances.D. To rovide a formal basis for assessing erformance and efficiency by roer
understanding of the study.E. To rovide guidance on ossible ways of imroving erformance.
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An evaluating study of standard costing technique At Kisan mouldings limited
G. To ma/e a comarison between actual cost and standard cost and analyse and variances.
LIT,1AT:1, A0- 1,@I,(7
K. $. )ergstrom 3>CG! . DHJ6>5! the controller of 4cLaurin*ones 2o.! wrote a
case study of his comany and how a standard cost system that served it well had
been established without any time study. 1ather! ast erformance was averaged!
and wor/ers were as/ed to imrove uon that result.
Accounting for managers 6 . 4ade +owda!
&ublished by7 $imalaya &ublishing $ouse! =econd ,dition*?JJ
&ro%ect &lanning and Analysis 6&rashanna 2handra!
Lall 0igam.4 and =harma. +.L******Advance cost accounting! sith revised edition!
$imalaya ublishing house! )ombay! >H.
@ K =aena! 2 - @ashist**** cost accounting! First edition 8ctober! >C! -aryagan%!
ublished by9 0ew -elhi*** >>JJJ? India! sultanchand ' sons. 1erint7 >D
METODO+OG-
=ource of -ata
The data collected is rimary and secondary in nature. This is due to the nature of
analysis! which only calls for secondary data.
0ature of -ata
Secona!2 atais the various year"s balance sheet! rofit and loss account and
statements rovided by the /isan mouldings ltd They were used for the analysis
and for rearing reorts. The records maintained by the comany where referred
to get the required information.
P+AN OF ANA+-SIS
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The data collected will be analy#ed with the hel of following tools
i Tables
3i5 +rahs
Aart from these tables! grahs! various management and statistical tools and techniques will be used for
analysis. From the roosed study! findings and imlementations as well as an arriving at a conclusion
will be interreted. The suggestions are also drawn from these data.
LI4ITATI80= 8F T$, =T:-7
>. The study is limited to definite eriod /isanmoulding comany
?. The study was based on the information rovided by the comany eecutives and records
that are assumed to be true.B. The ercetion of customers! suliers and other interactions has not been considered.
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CAPTER SCEME
2hater 8ne7 Introduction.
2hater Two7 1esearch -esign
2hater Three7 Industry rofile
2hater four7 2omany rofile
2hater five7 -ata Analysis and Interretation.
2hater si7 =ummary of findings! conclusion and suggestions.
)ibliograhy 3Format * Aendi M5
INDUSTR- PROFI+E
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The lastic industry of India has a big mar/et otentiality and is gradually rosering. In >BJ"s
lants manufacturing &@2 began to meet demand for the versatile material.
The demand for lastic moulded fittings and furniture is eected to increase considering
growth of user industries li/e automobiles! consumer durables! telecommunication equiments!
Industrial fittings! ies and other home aliances.
The lastic industry of India has a big mar/et otentiality and is gradually rosering the
lastic rocessing industry consist of over B!JJ!JJJ units which are roducing a wide range of
lastic roducts through the rocess of in%ection moulding! then blow moulding! etrusion! and
finally calendaring.
The lastic industry in India has made significant achievements since its modest but romising
beginning by commencing roduction of olystyrene in >DG. &lastic industry in Indiasymboli#es a romising industry and at the same time hels in creating new emloyment
oortunities for the eole of India.
The Indian lastic rocessing industry is highly fragmented and comrises BJ!JJJ firms.
)arring >JN * >DN of the firms! which can be classified as medium scale oerations! all the units
oerate on a small*scale basis.
Trends in the Industry
&lasticulture* A win*win situationO
,mergence of fleible ac/aging
&lastics in 4edicare
Increasing usage of &@2
A large investment in telecom! orts! roads! ower! and railways! has ensured that this sector
continues to grow at more than >JN .a.! for several years to come. The focus on lasticulture inthe agricultural sector 6 envisaged coverage of >G mn hectares under micro*irrigation schemes!
will further boost the rosects of the lastics industry.
The lastics rocessing industry is a source of great otential for global businesses. There is
tremendous scoe for innovative technological u gradations and thus raid growth of the sector.8verall turnover of the lastic rocessing industry 6 which currently stands at :=- >G.D )illion!
is eected to touch :=- ?J.B )illion in ?J>? and further :=- ?G )illion by ?J>D.
SCOPE OF TE REPORT
Indian &lastic Industry at a glance
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An evaluating study of standard costing technique At Kisan mouldings limited
,merging trends in the industry li/e lasticulture! oularity of fleible ac/aging! use of
lastics in 4edicare etc
-emand =uly scenario encomassing segmental growth rates and ro%ections
Factors driving growth! Issues ' 2hallenges
+overnment 1egulations ' Initiatives in Indian mar/et
4a%or layers
Forecasts
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An evaluating study of standard costing technique At Kisan mouldings limited
COMPAN- PROFI+E
0ame7 Kisan 4ouldings comany &vt. Ltd.
Founder7 4r.1amesh Agarwal
,stablished ear7 >H?
$ead quarters7 4umbai
A significant event in the history of Indian Industry was the rise of the Kisan moulding of
comanies to a multi crore conglomerate. The founder 4r.1amesh Agarwal strongly believed
that a comany"s rogress was determined by the integration of man and his intellect with the
technological growth and environment.
Kisan 4ouldings Limited 3K4L5! a Kisan +rou comany was originally incororated on0ovember ?J! >H as a rivate limited comany under the name and style of =anwaria
=ynthetics &rivate Limited. =ubsequently the comany was converted into &ublic Limited
2omany by assing secial resolution dated uly ?J! >B. The name of the comany waschanged to Kisan 4ouldings Limited on 0ovember ?C! >B and a fresh 2ertificate ofIncororation consequent on change of name was obtained.
Kisan +rou since its incetion in >H? has grown into a multi*location comany from single
unit! single roduct comany. Today the comany is manufacturing a wide range of semi*urbanroducts li/e &@2 &ies ' Fittings! =(1 &ies ' Fittings 3=oil*(aste ' rainwater5! and )lue
Threaded &ies ' Fittings for &lumbing ' =anitary alications! &@2 2asing &ies!
=ubmersible rising main &ies ' A)=&& 4oulded Flushing 2isterns under the brand PKisanP.
1ecently the grou has diversified into the manufacturing of &lastic 4olded Furniture"s!
$ousehold wares ' 2ustom 4oulding articles ' has launched the moulded furniture in theIndian mar/et under the brand PcrestP. The resent range includes 4oulded 2hairs! =tools etc.
with further range of lifestyle roducts to be added to it in the future.
The manufacturing units of the grou are located at 1oha ' Taraur in 4aharashtra! &ithamurin 4.&. ' =ilvassa 3:.T.5 ' the comany has branch offices in Indore! aiur! )angalore!
Ahmadabad! -elhi ' 2alcutta with $ead 8ffice in 4umbai.
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An evaluating study of standard costing technique At Kisan mouldings limited
,cellent ' wide dealer networ/ throughout the country gives another edge to the comany to
deal with logistics issues. The Kisan brand en%oys enviable reutation in the mar/et having over
>EJJ dealers sread throughout the country. 8ver BJN of the dealers from the networ/ areeclusive to it.
K4L is mainly into manufacturing of &@2 8*ring 3=(1 &ies5 and Fittings! 4ouldedFurniture! =olvent chemicals and 1ubber lubricant. The comany has set u the manufacturing
facility for &@2 iesfittings at Taraur in 4aharashtra and ventured into moulded furniturebusiness by acquiring closely held comany having manufacturing facility in =ilvassa in 2
?JJD. The comany has also an agreement 3which is due for renewal in Aril ?JJ5 with
=ymhony 2omfort =ystems Ltd 3=ymhony5 for comlete manufacturing of air coolers as erthe design engineering of =ymhony. K4L"s resent caacity of &ies ' fittings is >CBDJ 4T&A
and of 4oulded furniture is HHJ 4T&A.
Kisan ' 2lassic &ies! along with Kisan Fittings! are the innacle of our innovations ' are
aimed at satisfying every need of our discerning customers.
Kisan +rou of 2omanies has etended its reach in almost all ma%or cities of the nation. (ith
>B branch offices! it efficiently caters to the more than BJJJ strong dealer networ/s. 8n the basis
of this large networ/! QKisanQ cometently services its valued customers ' successfully adds
value to the ever growing need across the nation. (ith more than manufacturing facilities
across India! Kisan is one of the most entrenched roducers of &lastic ' &olymer &ies that hold
an atitude to handle large scale orders effortlessly. Ac/nowledged for its tendency of undying
commitment for timely delivery! Kisan +rou of 2omanies is accredited as an ultimate choice!
by the quality conscious customers.
Team
The talented team of Kisan consists of s/illed associates! a highly efficient management team
and a large number of emloyees! who hel in delivering ecellence in quality. The well*
qualified rofessionals at Kisan are embedded with strong leadershi s/ills along with undying
commitment to live u to the deadlines.
The comany understands the imortance of modernistic aroach and innovative thin/ing.
Thus! the team encomasses a fusion of various age grous dominated by the youth. This not
only gives a fresh aroach to every innovation we ma/e but also! hels in churning out ideas
along with the best range of revolutionary roducts.
Kisan firmly believes in the ideology! :nity is strength.
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An evaluating study of standard costing technique At Kisan mouldings limited
Kisan is a single unit that functions successfully with cooeration and dedication of the large
number of emloyees wor/ing towards the same goal of ma/ing Kisan better than the bestO
A )1I,F =:44A1 8F T$, 284&A0
Foundation7 The trust built u over the years
T1A-ITI807 ,cellence that roels us ahead
I0=&I1ATI807 @alued customer
@I==I80
At Kisan mouldings vision I s to be a leading artner in roviding innovative roducts andcombined solutions for the roduction of quality of agro based roducts for food! feed and fiber
to meet the global challenges of tomorrow.
4I==I80
4ission statement is to focus on our customers! their needs and satisfaction. They are bound to
do continue imrovement in all asects business with the hel of their eerienced and s/illed
rofessional team.
R:ALIT &8LI2
(e are committed to entirely satisfy their customers by
S &roviding quality goods
S At cometitive rices
S :sing ethical business ractices
S ,mhasi#ing on a synergy of man ower and technology without harming the
environment
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An evaluating study of standard costing technique At Kisan mouldings limited
Key ,ecutives
=L.0o 0ame -esignation
> 1amesh Agarwal 2hairman
? =atish Agarwal 4anaging -irector
B @i%ay Agarwal @ice 2hairman ' (holetime -irector
C =an%eev A Agarwal oint 4anaging -irector
D =unil +oyal 0on ,ecutive Indeendent -irector
E = K ain 0on ,ecutive Indeendent -irector
G T ) =ubramaniam 0on ,ecutive Indeendent -irector
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An evaluating study of standard costing technique At Kisan mouldings limited
H =waminathan =undarara%an 4ittur 0on ,ecutive Indeendent -irector
Asho/ Agarwal (hole Time -irector
&18-:2T=7
>. &ies
?. Fittings
B. 2&@2 &lumbing =ystem
C. 2omosite &iing =ystem
D. Irrigation =ystems
E. Kisan )arish 1ain (ater =ystem
&roduct range of the comany includes7
)uilding and construction7
S :&@2 =(1 &ies ' Fittings
S 4oulded agriculture Fittings
S :&@2 conduit ies and fittings
S Kisan )arish 1ainwater $arvesting system
S &,*AL*&, comosite ies and fittings
S 2isterns2isterns
S Toilet =eat 2overs &@2 )all @alves ' Foot @alves
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An evaluating study of standard costing technique At Kisan mouldings limited
(ater management and irrigation7
S u&@2 &ies
S $-&, &ies
S &&1 &ies ' Fittings
S -ri Irrigation =ystem
S =rin/ler =ystem
Furnitures 7
S 2hairs
S )aby 2hairs
S 1ela 2hairs
S 4ulti &urose Trolleys
S 2enter Table
S =torage -rums
S -ining Table
S =tools
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An evaluating study of standard costing technique At Kisan mouldings limited
QPROMOTER AND PROMOTER GROUPQ
No
.
Na"e of t4e S4a!e4ole! Total S4a!es 4el S4a!es ple%e o! ot4e!8ise
enc$"0e!e
0umber As a N
of
grandtotal
3A5
3)5 325
0umber N of
Total
sharesheld
As a N of
grand total
3A5 3)5 325
> )indiya 1 Aggarwal HE!?EH J.GH * * *? Aarti 1.Aggarwal >C!JB? J.>B * * *
B &oo%a =.Aggarwal >J!D?H J.> * * *
C agan -yanded )orate CJJ J * * *
D Asho/ -yanded )orate CJJ J * * *
E &ra/ash Anandrao +ambhir HJJ J.J> * * *
G =unita 1a%endra 4aha%an CJJ J * * *
H =adhashiv )hau La/ade CJJ J * * *
1udraa )hau La/ade CJJ J * * *
>J =unita &hatate CJJ J * * *
>> =uresh 1amchandra -ongare CHJ J * * *
>? ayshree )alasaheb 2hunga CJJ J * * *>B )alasaheb .2hunga CJJ J * * *
>C ayshree =hah HJJ J.J> * * *
>D )asaweshwar )hinge CJJ J * * *
>E 0anda/umar -attatray Khot CJJ J * * *
>G =nehalbhen &atel CJJ J * * *
>H Amit Aggarwal HJJ J.J> * * *
> 1.K.)hageria CJJ J * * *
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An evaluating study of standard costing technique At Kisan mouldings limited
?J Anil Kumar )hinge CJJ J * * *
?> A%ith Kumar )hinge CJJ J * * *
?? )harat )hinge DJJ J * * *
?B 0ir%a 4urli =hewaramani B?!JJJ J.? * * *
?C 0itasha @. Aggarwal CHJ J * * *
?D 0eerav =. Aggarwal B!?JJ J.JB * * *?E =ubhash + )ha/ta >>!CJ J.> * * *
?G Asho/ Aggarwal >H?!DG >.EE >HJ!JJJ H.D >.EB
?H =oftline =ecurities &rivate
Limited
>G>!J?J >.DD * * *
? &olsons Investment And
Finance &vt
??!JJJ J.? >J!HJJ C.J J.>
BJ =hruti = Aggarwal GG!G?J J.G * * *
B> @i%ay Aggarwal ??J!>HG >. * * *
B? 4adhu = +uta HE!JG J.GH * * *
BB Arana 1 Aggarwal >>!CJJ J.> * * *
BC 1amesh Aggarwal >H?!EC >.ED >E!JJJ H.GE J.>CBD Kunal 1 Aggarwal ?!>C J.HC DC!JJJ DH.>? J.C
BE =urindra Aggarwal 3$uf5 ?>!CHJ J.> * * *
BG 0ishi =an%eev Aggarwal CHG!C?J C.C? * * *
BH =hama @ Aggarwal >?!HHJ J.>? * * *
B =hweta = Aggarwal E>!C?J J.DE * * *
CJ =atish Aggarwal >G?!CD >.DG >CJ!JJJ H>.>E >.?G
C> =urinder Aggarwal >JC!?>> J.C * * *
C? =an%eev A Agarwal ?HG!DHJ ?.E> ?DC!?JJ HH.B ?.B
CB 0itin = +uta D!>CJ J.JD * * *
CC Amit @ Aggarwal EH!JGC J.E? EJ!JJJ HH.>C J.DC
CD =achin = +uta >!DCJ J.J> * * *
CE =antosh 1 Aggarwal C>!DHH C.CD * * *
CG =atish T +uta 3$uf5 >!JJJ J.J> * * *
CH 2lassic 2reation Ime &vt
Ltd
CJ!JJJ J.BE * * *
C Amita A Aggarwal C>!DHE C.CD * * *
DJ &ushalata A Aggarwal >>B!EH >.JB * * *
D> =read Fintrade Ltd ?H?!DC? ?.DE * * *
D? @eena @ Aggarwal DJB!JHJ C.DE * * *
DB 1e/ha = Aggarwal >GG!>?J >.E * * *
DC 1adhi/a Aggarwal E!GCC J.HH * * *DD =hivani = Aggarwal CB!EEC J.C * * *
DE @i%ay Aggarwal 3$uf5 >C!HJJ J.>B * * *
DG +aurav A Aggarwal >JC!D>J J.D * * *
DH 1amesh agannath Aggarwal
3$uf5
C>!DHJ J.BH * * *
D =atish Aggarwal 3$uf5 BHC!EE B.C * * *
EJ Asho/ agannath Aggarwal B!GJJ J.BE * * *
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An evaluating study of standard costing technique At Kisan mouldings limited
3$uf5
E> =an%eev A Aggarwal 3$uf5 D!ECJ J.JD * * *
E? A%it/umar ) )hinge B!JJJ J.JB * * *
EB 4r Asho/ Aggarwal >!DJJ J.J> * * *
EC 4s )indiya 1 Aggarwal B!HJJ J.JB * * *
ED &oo%a = Aggarwal !BJJ J.JH * * *EE 4r 1amesh Aggarwal >JJ J * * *
EG =hivani =atish Aggarwal H!JJ J.JH * * *
EH =oftline =ecurities &rivate
Ltd
?!CJJ J.HC * * *
E 4= =read Fintrade Ltd ?!EEJ J.HC * * *
GJ Uitura Investment ' Fin &vt
Ltd
EJJ J.J> * * *
G> 4= Uitura Investment ' Fin
&vt Ltd
?JJ J * * *
Total D!CHJ!J
B
C.ED G>D!JJJ >B.JD E.CH
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An evaluating study of standard costing technique At Kisan mouldings limited
P!o$cts 9 Se!ics
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An evaluating study of standard costing technique At Kisan mouldings limited
Gardencity college Page 33
P!o$ct Na"e Uni
t
; of
Stoc
Unit
4anufactured
+oods
0A C. J.J J J J BJ?.>D *
Traded +oods 0A D.> J.J J J J >E.?D *8ther 8erating
1evenue
0A J.J J.J J J J J.>C *
=uction &ies 1ol J.J J.J J J J J.JJ *
2ommission
1eceived
1s. J.J J.J J J J J.JJ *
1aw 4aterial
=ales
Kg J.J J.J J J J J.JJ *
Labour 2harges 1s. J.J J.J J J J J.JJ *
2omosit &ies 4tr J.J J.J J J J J.JJ *
Intermediate Kg J.J J.J J J J J.JJ *
&@2 =olvent Ltr J.J J.J J J J J.JJ *=olvent &@2 Ltr J.J J.J J J J J.JJ *
&@2 Fittings*
4oulded
4T J.J J.J J J J J.JJ *
&@2 Fittings*
4oulded
&cs J.J J.J J J J J.JJ *
&@2 Fittings*
4oulded
1ol J.J J.J J J J J.JJ *
&@2 Fittings*
Traded
&cs J.J J.J J J J J.JJ *
&@2 &ieFittings*Traded
1ol J.J J.J J J J J.JJ *
Flush Tan/s &cs J.J J.J J J J J.JJ *
In%ection
4oulded Items
0o J.J J.J J J J J.JJ *
1ubber Lubricant Kg J.J J.J J J J J.JJ *
1ubber Lubricent
Traded
Kg J.J J.J J J J J.JJ *
2& Fittings )o J.J J.J J J J J.JJ *
2omosit Fittings 4T J.J J.J J J J J.JJ *
2omosit Fittings &cs J.J J.J J J J J.JJ *2omosit &ies
' Fitting Trade
4tr J.J J.J J J J J.JJ *
2omosit &ies
' Fitting Trade
&cs J.J J.J J J J J.JJ *
Air 2oolers &cs J.J J.J wJ J J J.JJ *
Furnitures*
4oulded
4T J.J J.J J J J J.JJ *
Furnitures*
4oulded
&cs J.J J.J J J J J.JJ *
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An evaluating study of standard costing technique At Kisan mouldings limited
The manufacturing units of the grou are located at7
1oha ' Taraur in 4aharashtra!
&ithamur in 4.&. ' =ilvassa3:.T.5
T4e co"pan2 4as 0!anc4 offices in
Indore
aiur
)angalore
Ahmadabad
-elhi
2alcutta
$ead office in 4umbai.
DATA ANA+-SIS AND INTERPRETATION
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An evaluating study of standard costing technique At Kisan mouldings limited
TA)L,*>
TA)L, =$8(I0+ T$, 1A( 4AT,1IAL 280=:4,- @A1IA02,
,A1 ?J>> ?J>? ?J>B
=TA0-A1- BE>J.D B>J.D CJ>J.D
A2T:AL BBHC.D BDHC.D C?BD.D
@A1IA02, ??E B?E ??D3:F5
&,12,0TA+, E.?D H.BC D.E>3:F5
A0AL=I=7
From the above table it is found that in the year ?J>>! and ?J>? -irect raw material shows
favorable variance. $owever! in the year ?J>B it shows unfavorable variance! actual cost of raw
material is less than the standard cost. In the year ?J>B it shows negative variance at *D.E>N
resectively.
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An evaluating study of standard costing technique At Kisan mouldings limited
S+A,-A.- AC+A/ 0A.A,C P.C,+AG5**
*
5**
1***
15**
2***
25**
3***
35**
4***
45**
3)1*5
35(45
326
(34
4*1*542355
225561
2*11
2*12
2*13
I0T,1&1,TATI807
In the year ?J>> and ?J>? the comanies standard fied is effective because the variance is
more favorable. In the year ?J>B the comany"s actual raw material cost was higher than the
standard fied for raw material. )ecause there is change in rate! quantity and comosition of raw
material as comare to the budgeted figure and deartment aid urchased raw material from
domestic and international mar/et hence the deartment aid more commission to agent and
fright cartages.
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An evaluating study of standard costing technique At Kisan mouldings limited
TA)L,*?
TA)L, =$8(I0+ T$, -I1,2T ,M&,0=,= @A1IA02,
ear ?J>> ?J>? ?J>B
=tandard ?JJ ??J ?CJ
Actual ??J ?CJ ?HJ
@ariance ?J3:F5 ?J3:F5 CJ3:F5
&ercentage >J3:F5 .J3:F5 >E.EG3:F5
A0AL=I=7
From the above table it can be seen that eenses cost variance shows unfavorable variance. In
the year ?J>>! ?J>? and ?J>B the year variances are *>JN! *.JN! *>E.EGN resectively. It isdue to imroer maintenance of direct eenses in the comany.
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An evaluating study of standard costing technique At Kisan mouldings limited
Standard Actual 0ariance Percentage
*
5*
1**
15*
2**
25*
3**
2**
22*
* *
22*
24*
* *
24*
2(*
* *
2*11
2*12
2*13
I0T,1&1,TATI807
From the above chart it is absorbed that the direct eenses shows unfavorable variancein the year ?J>>! ?J>? and ?J>B the year variances are >JN! *.JN and *>E.EGN resectively.
And it is shown a unfavorable variance in all the year so deartment ta/e a good decision to
change a direct eenses. And roerly fi a standard cost in another future year.
TA)L,*B
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An evaluating study of standard costing technique At Kisan mouldings limited
TA)L, =$8(I0+ T$, -I1,2T LA)8:1 @A1IA02,
,A1 ?J>> ?J>? ?J>B
=tandard DBJ DBJ DEJ
Actual DBJ DCJ DJ
@ariance J >J3:F5 BJ3:F5
&ercentage J >.H3:F5 D.BE3:F5
A0AL=I=7
From the above table it can be seen that direct labour cost variance shows unfavorable variance.
In the year ?J>>! ?J>?! and ?J>B! the variance are ?J>> is equal and ?J>? is *>.HN! ?J>B is
*D.BEN resectively and year to year comare to direct labour variance is negatively shows that
table.
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An evaluating study of standard costing technique At Kisan mouldings limited
Standard Actual 0ariance Percentage
*
1**
2**
3**
4**
5**
6**
7**
53* 53*
* *
53* 54*
* *
56*5)*
* *
2*11
2*12
2*13
I0T,1&1,TAIT807
From the above grah it can be informed that direct labour eenses shown unfavorable
variance because actual cost is less than the standard cost fied. =o management ta/es care to
that direct labour eenses and it is change to fi a standard cost in futureyears.
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TA)L,*C
TA)L, =$8(I0+ T$, =AL,= @A1IA02,
ear ?J>> ?J>? ?J>B
=tandard GCJD GHJD H>JD
Actual GCJD GHJD H?JD
@ariance J J >JJ3:F5
&ercentage J J >.?BC3:F5
A0AL=I=7
That table shows a ositive variance in two year and it is standard cost variance and actual cost
variance is equal to send the amount and last year ?J>B is *>.?BCN negatively shows. ear to
year increase the sales variance to fi the standard cost.
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An evaluating study of standard costing technique At Kisan mouldings limited
Standard Actual 0ariance Percentage
*
1***
2***
3***
4***
5***
6***
7***
(***
)***
74*5 74*57(*5 7(*5
* *
(1*5 (2*5
* *
2*11
2*12
2*13
I0T,1&1,TATI807
=ales variance shows a favorable variance in ?J>> and ?J>?. )ut in ?J>B it shows a negative
variance. )ecause correct to fi a standard cost variance. And last two year shows equal to
standard cost and actual cost. That year shows negative variance standard cost higher than the
actual cost.
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An evaluating study of standard costing technique At Kisan mouldings limited
TA)L,*D
TA)L, =$8(I0+ T$, &8(,1 A0- ,L,2T1I2IT @A1IA02,
ear ?J>> ?J>? ?J>B
=tandard BJD BCD BHD
Actual ?GD BBD CBD
@ariance BJ >J DJ3:F5
&ercentage .HB ?.H >?.H3:F5
A0AL=I=7
From the above table it is observed that the ower and electricity cost shows favorable variancein the year ?J>> and ?J>?. In the year ?J>> it was .HBN and ?J>? it was ?.HNand in the year
?J>B it is *>?.HN resectively.
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An evaluating study of standard costing technique At Kisan mouldings limited
Standard Actual 0ariance Percentage
*
5*
1**
15*
2**
25*
3**
35*
4**
45*
5**
3*5
275
3* )(3
345 335
1* 2()
3(5
435
* *
2*11
2*12
2*13
I0T,1&1,TATI807
The ower and electricity cost shows favorable variance in the two year! in ?J>B it was
decreased when comared to revious year and it is unfavorable due to imroer maintenance of
ower in the factory and electricity due to actual cost is less than standard cost variance.
TA)L,*G
TA)L, =$8(I0+ T$, 4A2$I0,1 4AI0T,0A02, A0- 1,&AI1= @A1IA02,=
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An evaluating study of standard costing technique At Kisan mouldings limited
ear ?J>> ?J>? ?J>B
=tandard ?D >>?E >B?E
Actual JD >J?E >D?E
@ariance ?J >JJ ?JJ3:F5
&ercentage ?.>E H.HH >D.>3:F5
A0AL=I=7
From the above table it is found that machinery maintenance and reairs shows favorable
variance in the year ?J>> it was ?.>EN! in ?J>? variance is H.HHN and in the year ?J>B it is
*>D.JHN. it shows un favorable variance. =o estimation of standard costing is very low comare
to the actual cost variance.
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An evaluating study of standard costing technique At Kisan mouldings limited
Standard Actual 0ariance Percentage
*
2**
4**
6**
(**
1***
12**
14**
16**
1(**
)25 )*5
2* 216
11261*26
1**(((
1326
1526
* *
2*11
2*12
2*13
I0T,1&1,TATI807
In the year ?J>? the machinery maintenance variance shows H.HHN more comare to ?J>> it was
?.>EN and in the year it is *>D.>JN that is unfavorable due to imroer utili#ation of machine
and imroer utili#ing idle caacity.
TA)L,*H
TA)L, =$8(I0+ 28=T 8F &18-:2TI@IT @A1IA02,
ear ?J>> ?J>? ?J>B
=tandard EJ?.D E??.D ED?.D
Actual E??.D ED?.DE EH?.D
@ariance ?JJ3:F5 BJJ3:F5 BJJ3:F5
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&ercentage B.B>3:F5 C.H>3:F5 C.D3:F5
Standard Actual 0ariance Percentage
*
1***
2***
3***
4***
5***
6***
7***
(***
2*11
2*12
2*13
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TA)L,*
TA)L, =$8(I0+ FIM,- FA2T81 8@,1$,A- @A1IA02,=
ear ?J>> ?J>? ?J>B
=tandard HEB H? >>>B
Actual HJD BJ >?DB
@ariance DH D? >CJ3:F5
&ercentage E.G? D.? >?.DG3:F5
A0AL=I=7
From the above table it is found that in the year ?J>> and ?J>? fied factory overhead shows
favorable variance. $owever! in the year ?J>B it shows unfavorable variance! actual cost is less
than the standard cost that"s why it shows negative variance of *>?.DGN resectively.
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Standard Actual 0ariance Percentage
*
2**
4**
6**
(**
1***
12**
14**
(63(*5
5(672
)(2)3*
5252)
1113
1253
*
1257
2*11
2*122*13
I0T,1&1,TATI807
In the year ?J>> and ?J>? the comanies standard fied is effective because the variance is more
favorable. In the year ?J>B the comany"s actual factory overhead cost was higher than the
standard fied factory overhead. )ecause there is higher actual cost of ower! rent! insurance!
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and salary than the standard cost of overhead. $ence the comany has to decrease the actual cost
of factory overhead to meet standard cost.
TA)L,*H
TA)L, =$8(I0+ T$, A-@,1TI=,4,0T ,M&,0=,= @A1IA02,
ear ?J>> ?J>? ?J>B
=tandard CCJ CEJ CJ
Actual CJJ CGJ D>J
@ariance CJ >J3:F5 ?J3:F5
&ercentage .J ?.>G3:F5 C.JH3:F5
A0AL=I=7
From the above table it can be seen that in the year ?J>> the advertisement eenses shows
favorable variance! but in the year ?J>? and ?J>B the advertisement eenses variance shows
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unfavorable variance. In the year ?J>> the variance was .JN! but in the year ?J>? and ?J>B
variance is ?.>GN and *C.JHN. It also found that in the year ?J>> the variance is comes down to
the year to year comared to revious year.
Standard Actual 0ariance Percentage
*
1**
2**
3**
4**
5**
6**
2*11
2*12
2*13
I0T,1&1,TATI807
The above analysis it is found that in the year ?J>> advertisement eenses shows favorable
variance! but comare to ?J>> the etent of variance is decreased in the year ?J>? and ?J>B.
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)ecause the comany eand its mar/et to various countries! they incur more advertisement
eenses to face the cometition in the mar/et. $ence! the deartment too/ more eenditure
than the standard cost fied.
TA)L,*>J
TA)L, =$8(I0+ T$, 8FFI2, 8@,1$,A- @A1IA02,
ear ?J>> ?J>? ?J>B
=tandard >>JJ >BJJ >DJJ
Actual >JJJ >?JJ >GJJ
@ariance >JJ >JJ ?JJ3:F5
&ercentage .J G.E >B.BB3:F5
A0AL=I=7
From the above table it is observed that office overhead shows favorable variance in the year
?J>> it shows as .JN! in the year ?J>? it is decreased to G.EN. )ut in the year ?J>B
unfavorable variance that is *>B.BBN. It is further observed that the ?J>? the variance is G.E it is
less comared to revious year. )ut in the year ?J>B negative variance3unfavorable variance5.
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Standard Actual 0ariance Percentage
*
2**
4**
6**
(**
1***
12**
14**
16**
1(**
2*11
2*12
2*13
I0T,1&1,TATI807
The office overhead shows favorable variance! in the year ?J>>! and ?J>?. $owever in the year
?J>? variance is favorable G.EN it is less comare to revious year. And in the year ?J>B is
unfavorable that is *>B.BBN this is due to office charges may have been wrongly made! either
because of inaccurate boo/ /eeing or because of oorly drawn chart of account.
TA)L,*>>
TA)L, =$8(I0+ T$, &A2KA+, 1AT,= ,M&,0=,= @A1IA02,
ear ?J>> ?J>? ?J>B
=tandard DJ.D EJ.D HJ.D
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Actual EJ.D EJ.D J.D
@ariance >J3:F5 J >J3:F5
&ercentage >.H3:F5 J >?.C?3:F5
A0AL=I=7
From the above table it can be seen that ac/aging rates eenses variance shows unfavorable
variance. In the year ?J>>!?J>? and ?J>B the variance is *>.HN! JN and *>?.C?N resectively.
$owever in the year ?J>? the variance shows assivity i.e.! standard cost equal to the actual costsheet and another two year shows a negatively in that comarison.
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Standard Actual 0ariance Percentage
*
1*
2*
3*
4*
5*
6*
7*
(*
)*
1**
2*11
2*12
2*13
I0T,1&1,TATI807
From the above chart it can be inferred that ac/aging rates eenses variance shows
unfavorable variance. )ut comare to ?J>? that year variance is equal to actual cost. And in the
year ?J>> and ?J>B shows a negative variance. =o deartment reare a standard cost sheet ta/e
good decision and historical data and future year technically are reare a standard cost sheet.
TA)L,*>?
TA)L, =$8(I0+ T$, F1I,+$T A0- 2A11IA+, 8:T(A1- 2$A1+,= @A1IA02,
ear ?J>> ?J>? ?J>B
=tandard BJ BJ DJ
Actual ?J CJ EJ
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@ariance >J >J3:F5 >J3:F5
&ercentage BB.BB BB.BB3:F5 ?J3:F5
A0AL=I=7
From the above table it can be seen that freight and carriage outward charges shows favorable
variance in the year ?J>> it is BB.BBN and in the year ?J>? it is unfavorable that is *BB.BBN and
the year ?J>B it is also unfavorable it is *?J. Further it can be observed that in the year ?J>> the
variance shows BB.BBN favorable variance comare to ?J>? and ?J>B.
Standard Actual 0ariance Percentage
*
1*
2*
3*
4*
5*
6*
7*
2*11
2*12
2*13
I0T,1&1,TATI807
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From the above table it can be inferred that the freight ' carriage outward charges shows
favorable variance in year ?J>> and unfavorable variance in year ?J>? and ?J>B the variance are
less comare to ?J>>. This is due to the deartment ta/e less initiative to control the cost
incurred in freight ' carriage outward charges.
TA)L,*>B
TA)L, =$8(I0+ T$, A-4I0I=T1ATI@, A0- 8T$,1 ,M&,0-IT:1, @A1IA02,
ear ?J>> ?J>? ?J>B
=tandard ?BJ ?EJ B>J
Actual >J ?DJ BHJ
@ariance CJ >J GJ3:F5
&ercentage >G.B B.HD ??.DH3:F5
A0AL=I=7
From the above table it is found that administrative and eenditure shows favorable variance. In
the year ?J>> it was >G.BN in the year ?J>? is B.HDN and in the year ?J>B it is *??.DHN that is
favorable variance.
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Standard Actual 0ariance Percentage
*
5*
1**
15*
2**
25*
3**
35*
4**
2*11
2*12
2*13
I0T,1&1,TATI807
In the year ?J>> the administrative and eenditure variance shows >G.BN more comare the
eisting year ?J>? is B.HDN. And in the year ?J>B it is *??.DHN unfavorable due to imroer
utili#ation of machines and imroer utili#ing idle caacity.
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CAPTER?&
SUMMAR- OF FINDINGS@ CONC+USION AND SUGGESTION
The study has been underta/en to find out the effectiveness of standard costing system at /isan
molding ltd on the basis of eisting costing system and suggestions to overcome the deficiencies
in the eisting costing system and standard costing system at /isan molding ltd has been
resented.
FI0-I0+=7
A study of the costing system at Kisan molding ltd reveal the following9
The method of costing adoted at /isan molding ltd is standard costing and rocess
costing.
The basic element of costs are material! labour and overhead.
The material cost is collected and recorded activitywor/ order wise in the material cost
%ournal.
The domestic sales are increased every year and comany has in the rofit.
The emhasi#ing on a synergy manower and technology.
The /isan molding ltd using ethical business ractices
The labour cost is also collected and recorded activitywor/ order wise in the materialcost %ournal.
Administration overhead is first allocated so that division and functions i.e.! roduction
division including high quality assurance and have greater strength with uniform wall
thic/ness inn over roduction.
Insiration is valued customer and either needs and satisfaction to the customer.
Kisan molding ltd using eerienced and s/illed rofessional team. It is good growth in
future.
=tudy on the effectiveness of standard costing system reveals the following7
1aw material consumed variance in the year ?J>> ' ?J>? the standard cost fied is
effective because the variance is more favorable. )ut in the year ?J>B is unfavorable
variance. )ecause there is change in rate! quantity and comosition of raw material as
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comared to the budgeted figure and the deartment aid urchased raw material from
domestic and international mar/et hence the deartment aid more commission to agent
and fright and cartages.
-irect eenses variance shows unfavorable variance. )ecause actual cost less than
standard cost fied. -irect eenses reduced when comared from year to year.
-irect labour variance shows favorable variance in the year ?J>> fi a standard cost is
equal to the actual cost. )ut another two year shows unfavorable variance in the year
?J>?? is *>.HN ' ?J>B is *D.BEN resectively.
=ales variance in the year ?J>> ' ?J>? is equal to the actual cost and it is shows
favorable variance. 4anagement has ta/en very effective stes to control the cost and fi
a standard cost in future year. )ut ?J>B is shows negative variance *>.?BCN resectively
&ower variance shows favorable variance in the first two year. )ut ?J>B is unfavorable
variance is *C.BDN
,lectricity variance shows favorable variance in the year ?J>>. )ut ?J>? ' ?J>B shows
unfavorable variance it is G.CN ' ?D.HN. from two year estimate it is higher than the
standard cost and standard cost fied is negatively shows because actual cost less than the
standard cost variance.
From the above table it is found that machinery maintenance and reairs variances shows
favorable variance. In the year ?J>> it is ?.>EN '?J>? H.HHN. )ut in the year ?J>> it is
>D.>N shows unfavorable variance.
Advertisement eenses variance shows favorable variance in the year ?J>> was .JN
but ?J>? ' ?J>B shows unfavorable variance because they incur more advertisement
eenses to face the cometition in the mar/et.
-elivery vehicles cost variance shows favorable variance in the year ?J>> it is .JN '
?J>? it is G.EN. but ?J>B it is *>B.BBN shows on the table is unfavorable variance.8ffice charges may be wrongly made. ,ither because of inaccurate boo/ /eeing or
because of oorly drawn chart of account.
&ac/aging rates eenses variance shows unfavorable variance in two year. )ut ?J>? is
standard cost equal to the actual cost.
A fright and carriage outward charge shows favorable variance in the year ?J>> it is
BB.BBN. )ut in ?J>? ' ?J>B is unfavorable variance. ear by year comaring is more
decreasing trend to show that table.
Administrative and other eenditure variance shows favorable variance in the ?J>> it is
>G.BN and ?J>? it is B.HDN. )ut last year ?J>B it is *??.DHN resectively.
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SUGGESTIONS
>. Training 7
The emowerment of the weavers is critical for sustainable overty allocation. &roertraining to the wor/ers and it imrove the roer utili#ation of machines use shift wish
wor/ increase a roduction ' roer utili#ation of machinery.
?. 2ontrol the advertisement cost7
Advertisement eenditure cost increase to year by year and comany eand its mar/et
to various countries.
B. 4aintenance of fied assets7
&roer suervision in the maintenance deartment is required to ensure that the
maintenance cost do not eceed the standard set.
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CONC+USION:
Today cost accounting is considered to be an imortant tool for rogress. 2osting techniques
relaying a significant role in assisting the management in decision ma/ing. The study of thecosting system at /isan molding ltd has revealed some ma%or difficulties in the costing system9
one of the ma%or roblems faced to identify the areas of wastages and facilitate better control of
cost. And avoid the wastages and increase the efficiency in erformance.
From the above summary of findings it is clear that variance ertaining to most of the eenses
show favorable in the year ?J>> ' ?J>?. )ut in the year ?J>B variance shows all most all of the
eenses unfavorable. The comany was able to limit to their eenditure to with the standard
figure even though the comany is in rofit. 4any reasons lead to unfavorable variance.
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#I#I+OGRAP-
#OOS:?
Lall 0igam.4 and =harma. +.L******Advance cost accounting! sith revised edition!
$imalaya ublishing house! )ombay! >H.
@ K =aena! 2 - @ashist**** cost accounting! First edition 8ctober! >C! -aryagan%!
ublished by9 0ew -elhi*** >>JJJ? India! sultanchand ' sons. 1erint7 >D
ANNUA+ REPORT:?
2omany annual reort of ?J>>*?J>?! ?J>?*?J>B and ?J>B*?J>C 3standard cost sheet
and actual cost sheet5.
BE#SITEUSED:?
(ebsite! www./isanmolding ltd.com
alanceSheet - Kisan Mouldings Ltd.
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An evaluating study of standard costing technique At Kisan mouldings limited
Rs (in Crores)
Particulars Mar'13 Mar'12 Mar'11 Mar'10 Mar'09
Liabilities 12 Months 12 Months 12 Months 12 Months 12 Months
Share Capital 20.33 13.64 13.64 15.75 12.67
Reserves & Surplus 80.84 54.53 51.08 32.02 24.47
Net Worth 101.1 !".1 !#.2 #. 3.1#
Secure !oan 204.07 146.48 163.60 108.68 61.37
"nsecure !oan .00 1.#1 1.58 .57 1.3#
$%$&L L&(L$)S 30*.2# 21!.*! 229."9 1*.02 99.90
&ssets
$ross %loc 221.04 158.66 128.60 103.41 71.12
(') cc. epreciation 80.77 50.62 43.05 35.77 30.36
Net (loc+ 1#0.2! 10".0# "*.** !.!# #0.!
Capital *or in +ro,ress 6.55 13.6# #.15 8.15 1.61
-nvestents .6# .45 .44 .44 .31
-nventories 158.4# 104.#1 86.47 51.## 37.57
Sunr/ etors 123.88 70.47 75.28 58.78 45.#7
Cash an %an 13.68 7.48 33.28 6.65 4.1#
!oans an vances 31.24 14.78 14.52 #.34 8.6#
$otal ,urrent &ssets 32.29 19.!* 209.*# 12!.! 9!.#2
Current !iailities 155.37 #6.53 73.1# 44.42 38.34
+rovisions 14.1# 6.72 1.60 1.54 .86
$otal ,urrent Liabilities 1!9.*! 103.2! #.9 #*.9! 39.20
N)$ ,)N$ &SS)$S 1*.# 9#.39 13#.! "0."0 *.22
isc. penses .00 .00 .00 .00 .00
$%$&L &SS)$S/&(,) 30*.2# 21!.*! 229."9 1*.02 99.90
Rs (in Crores)
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Proit 4 Loss - Kisan Mouldings Ltd.Rs (in Crores)
Mar'13 Mar'12 Mar'11 Mar'10 Mar'09
12onths 12onths 12onths 12onths 12onths
N,%M)5
Sales urnover 518.46 2#0.08 311.8# 218.46 16#.16
cise ut/ .00 .00 23.80 15.34 17.#8
N)$ S&L)S *1".#! 290.0" 2"".09 203.12 1*1.1"
ther -ncoe 0 0 0 0 0
$%$&L N,%M) *19.!" 291.** 2"".#3 203.#1 1*1.#*
)6P)N$)5
anuacturin, penses 44.84 14.28 1#.38 11.51 10.34
aterial Consue 363.82 1#5.03 18#.#2 136.#4 100.#5
+ersonal penses 25.64 13.#1 13.56 11.5# 7.25
Sellin, penses .00 .00 26.78 16.60 11.23
inistrative penses 38.47 35.02 #.40 6.32 4.4#
penses Capitalise .00 .00 .00 .00 .00
+rovisions ae .00 .00 .00 .00 .00
$%$&L )6P)N$) #2. 2*".22 2*9.03 1"2.9 13#.2!
peratin, +roit 45.6# 31.86 2#.06 20.15 16.#2
)($& #!.90 33.33 29.#0 20.## 1.19
epreciation 13.68 #.07 7.36 5.50 5.24
ther *rite'os .00 .00 .00 .00 .05
)($ 33.22 2#.2! 22.0* 1#.9# 11.90
-nterest 28.12 17.## 14.## 8.60 7.66
)($ *.10 !.2 .0! !.3# #.2#
aes 2.64 3.05 1.68 2.60 1.53
Proit and Loss or the 7ear 2.#! 3.22 *.3" 3.# 2.1
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An evaluating study of standard costing technique At Kisan mouldings limited
on Recurrin, -tes '.04 .#7 '2.35 .73 .25
ther on Cash ustents .00 .22 .6# .13 .02
ther ustents .00 .00 2.42 .00 .00
)P%$) P&$ 2.#2 #.#0 !.1* #.!1 2.9
K)7 $)MS
+reerence ivien .00 .00 .00 .00 .00
9uit/ ivien 1.32 .6# 1.13 1.32 .70
9uit/ ivien (:) 6.47 5.03 8.30 14.73 10.00
Shares in -ssue (!ahs) 203.25 136.38 136.38 8#.#0 70.38
)PS - &nnualised /s 1.19 3.23 #.*1 *.12 #.22
Rs (in Crores)
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