SYNOPSIS OF PROJECT ON

ANALYSIS OF COST CONTROL AND REDUCTION

INTRODUCTION
Cost control and reduction refers to the efforts business managers make
to monitor, evaluate, and trim expenditures. These efforts might be part
of a formal, company-wide program or might be informal in nature and
limited to a single individual or department. In either case, however, cost
control is a particularly important area of focus for small businesses,
which often have limited amounts of time and money. "In a small
business, you are so busy serving your customers, you tend to
get lackadaisical about what you're buying," business owner John Clark
noted in Jane Applegate's Strategies for Small Business Success. Even
seemingly insignificant expendituresfor such items as office supplies,
telephone bills, or overnight delivery servicescan add up for small
businesses. On the plus side, these minor expenditures can often provide
sources of cost savings.
The study of Cost Reduction is very essential in the present competitive
world.

Cost Reduction represents achievement of real and permanent

reduction in the unit cost of goods manufactured or services rendered

without improving the suitability for the use originally intended. It
improves all standards and endeavors to better than continuously.

The

study of cost reduction is a corrective function. It operates even as

efficient cost control system exists. It emphasizes bother the present and
future. It helps maximization of profits of the organization to sustain for a
longer period in this dynamic environment.

It is useful for all types of

Industries and institutions to have better control on the costs. It also

benefits the consumers by increasing their purchasing power of the
money.
Cost control is different from cost reduction. The word "control" indicates
an exercise in restraint. When expenses are controlled, they are restrained

from growing larger than they should grow. The process of cost reduction,
on the other hand, concerns reducing expenses that are too high.
Controlling is a very different concept than reducing.

NEED FOR THE STUDY

Now

a days management are facing problems of survival because of

acute competition. Only those organization can meet the competition

effectively and have a hold on the markets which are in a position to keep
their cost minimum. Cost Accounting can be instrumental in this regard by
eliminating all inefficiencies and wastages by cost control.
Cost reduction increases profit. The more dividends to the share
holders, more bonus to the staff and more retention of profit for
expansion for the business which will create more employment.
Cost reduction will provide more money for labour welfare schemes
and thus improve management relationship.
Cost reduction will help in making goods available to the consumers
at cheaper rates.
Cost reduction will be helpful in meeting competition effectively
Higher profit will provide more revenue to the government by way of
taxation.

OBJECTIVE OF STUDY
Objective of the project work is to analyses costing procedure and
reduction procedures, cost database in computation of a true and fair cost
of the production that have a bearing on:
Pricing of the product in respect of cost plus contracts.

 Comparison with estimated costs for the purpose of control.

To study existing cost structure of the organization and
To suggest measures for cost reduction especially in the areas of:

Stores handling purchasing storing Issuing costs

Manufacturing cost
Financial costs

SCOPE & METHODOLOGY

Scope:
Basic cost data proposed to be collected from the division costing
section. This data covers material, labor & overheads. Again above data
relates to 25% of the jobs. However, on account of the time constraint,
two projects are proposed to be selected for the purpose of the project
study.
For a particular period product costs on the above lines will be
summarized and compared with the estimates for the purpose of control.
Among other things the method of computing estimates costs will be
ascertained for the purpose pricing.
Scope covers a minimum two financial years and a single significant
division is selected for the purpose of the cost analysis.
Period of the Study:
The proposed project study will cover a suitable financial year 2003-04,
2004-05, 2005-06, 2006-07, and 2007-08, 2009 -10 depending upon the
data availability.
Importance:

As already stated under objective, a critical cost analysis will help the
Organization in taking right decision to achieve profitability and
also for the Control of its operation. This has assumed importance
in the light of several :
Important accounting standards introduced by institute of chartered
accounting (Accounting standards 17- segment reporting) and
institute of cost & works.
Accounting of Indian (cost accounting standards) for implementation in
the organization.

RESEARCH METHODOLOGY
For the preparation of the collection of data is very essential. There are
two broad
Methods, which are followed in any project. They are primary data and
secondary Data.
PRIMARY DATA:
The primary data is obtained from the
Direct personal and indirect and oral investigation
The staff of finance accounts groups co-operated to get into brief.
SECONDARY DATA
The secondary data is obtained from the
Annual reports of the unit
Brooches

 House magazines of the unit

Browsing net
LIMITATION:
A Stated else where Suryavanshi Spinning Mills Ltd. The very nature of
the organization places certain limitations on the collection of the Data
and Analysis thereof.
Due to the large scale of operation the research is restricted to cost
control aspects only. Due to the non-availability of sufficient data the
research limited is to the information provided by the company which may
not be sufficient.
Time is major constraint and hence period is limited for period of 45 days
(20th January to 5th March)

CHAPTER PLAN
CHAPTER-1
Analysis of Cost Control and Reduction

Introduction

Need of the study

Objectives

Scope and Methodology

Limitations of Study

Research Methodology

CHAPTER-2

Literature Review

CHAPTER-3

Company Profile

History

Manufacturing Process

Organisation Structure

Core Operation

Certifications, Awards

CHAPTER-4

Data Analysis and Interpretation

CHAPTER-5

Findings and Suggestions

CHAPTER - 6

Conclusion

Bibliography

BIBILIOGRAPHY

Cost Accounting ----------------------------Jain and Narang

Advanced cost accounting ----------------B.M. Lal Nigam & G.L. Sharma
Cost Accounting-----------------------------R.P. Trivedi
Web site: www.suryavanshi.com