CO PRESENTATION OF AS IS IN BRIEF

PROCESS OF PRODUCTION
1. 2. 3. 4. 5. TURNING HEAT TREATMENT GRINDING ROLLING ELEMENTS ASSEMBLY

PRODUCTION

TURNING (RACES)

HEADING (BALLS/ ROLLERS)

HEAT TREATMENT ASSEMBLY

BALL FLASHING

HEAT TREATMENT GRINDING & HONING

PACKING

BALL/ROLLER GRDG. & FINISHING

BASIC COMPONENTS OF BEARINGS

1.OUTER RACES 2.INNER RACES 3.CAGES 4.ROLLING ELEMENTS

RAW MATERIALS
TUBES RINGS BARS WIRES

OBJECTIVES OF COSTING DEPARTMENT

1. STATUTORY REQUIREMNTS

A) FINACIAL ACCOUNTS REQUIREMENTS valuation of finished goods valuation of semi finished goods B) COST AUDIT REQUIREMENTS
Cost Centre-wise Cost with Cost break-up Cost of production, cost of sales of bearings. Available Hours, hours worked, Machine hour rate etc. Net Realization, cost & margin Total & per unit. Reconciliation of profit / (loss) between Finance & cost. Annexure as per Cost audit Rules.

C) INTERNATIONAL FINANCIAL REPORTING SYSTEM REQUIREMENTS

2.

MANAGEMENT REQUIREMENTS Preparation of profit note showing variation in NR, cost, & quantity. Cost sheets. Analysis for variance of Cost over previous period and Annual Business Plan in terms of price, mix and volume. Contribution per shift / hr. Margin Total as well as per unit. Costing of new symbol developed Costing for quotation Vetting of Capital schemes / Investments Costing for Make or Buy Reconciliation with Financial Accounts.

ORGANISATIONAL INFRASTRUCTURE

EIC (Bearings)
Head-Department Financial Controller

CFC CORPORATE

SOURCES OF COST
The cost is collected through Cost Charge accounts and booked to the various cost codes. Cost codes are four digit numbers. example: 9001 for turning - prc 120. Six-digit numeric charge accounting codes exists in finance. example: 300111 for ind bar consumption. Any transaction of expenditure which is booked in finance is necessarily booked in costing. i.e. sum total of expr in all the cost codes = sum total of expr in PROFIT & LOSS A/C.

COST COLLECTION PROCESS Cost is collected from the following source of modules Inventory System Payroll System Cash/bank Accounts payable Accounts receivable General ledger

FLOW CHART OF COSTING SYSTEM

INVENTORY MODULE DEPARTMENTAL COST SHEET A.P. MODULE

A.R. MODULE

PAYROLL

C O S T I N G S Y S T E M

SYMBOL WISE COST

G.L. MODULE

SYMBOL WISE CONTRIBUTION / PROFIT

CASH/BANK

OTHERS COST FINANCE RECONCILIATION

PRODUCTION

COST CENTRES
1) Production cost centers. Examples: turning prc 85, heat treatment IF 100. 2) Service cost centres. Examples: Inspection, tool room

COST ACCOUNTING SYSTEM

Cost of manufacturing is identified under two major heads 1) Raw material cost. 2) Operating cost. Cost of manufacturing is exclusive of selling & distribution expenses.

RAW MATERIAL COST

Raw material consumption is directly identified with the products Allocated to the individual Bearing based on the item number indicated in the shop indent voucher Raw materials cost includes Bought-out components, Vended Components. Raw material cost includes element of inward freight.

OPERATING COST
This comprises of all costs other than raw material Examples: Salary & Wages, Stores & Spares, Fuel, Electricity, Repairs, Insurance, Administration, and other factory expenses incurred in Production Cost Centres & Service departments Cost Centers. These expenses are not identified directly and it is identified with the cost centres The cost of service departments are allocated or apportioned to production cost centres on a percentage basis worked out by service departments.

FLOW CHART OF PRODUCTION SUPPORT SERVICES

PRODUCTION SUPPORT SERVICES

GENERATOR, BASEMENT, COMPRESSOR, A.C, MAINTENANCE, INSPECTION, DESIGN & DEVELOPMENT

TOOL ROOM

PRODUCTION PLANNING, PURCHASE, STORE

REPORTS
Reports prepared by pc: 1. Product Costing 2. Broad analysis of Variance. 3. Cost Of Sale Details 4. Cost Finance Reconciliation 5. Profitability Statement 6. Revenue budget 7. Ratio Analysis 8. Working Capital Statement 9. WIP valuation 10. Finished goods valuation 11. Different annexure & Performa as per cost audit requirements

Reports prepared in Avalon

Cost Detail Report Cost Sheet Report Service Ratio Report Cost Sheet Summary Report Cost Centre and Account head wise expense report Account head Report for Personnel and Administration cost group 7. Revenue Budget for 9057, 9076, 9077 8. Personnel/Administration Expense summary 9. Cost Code, Account head & cost number wise Report 10. Cost group wise end part wise detail report 11. Cost Sheet Summary 12. Operation wise end part wise report 13. Cost group wise end part wise cost 14. End part wise raw material issues 1. 2. 3. 4. 5. 6.