Cost Accounting Project

COST ACCOUNTING PROJECT

PROCESS COSTING

NAME: RUPEN CHALWAMCOM- PART-1

INTRODUCTION

Process costing is an accounting methodology that traces and accumulates direct costs, and allocates indirect costs of a manufacturing process. Costs are assigned to products, usually in a large batch, which might include an entire month's production. Eventually, costs have to be allocated to individual units of product. It assigns average costs to each unit, and is the opposite extreme of Job costing which attempts to measure individual costs of production of each unit.

it is a method of assigning costs to units of production in companies producing large quantities of homogeneous products.

Process costing is a type of operation costing which is used to ascertain the cost of a product at each process or stage of manufacture. CIMA defines process costing as "The costing method applicable where goods or services result from a sequence of continuous or repetitive operations or processes. 

The importance of process costing[edit]

Costing is an important process that many companies engage in to keep track of where their money is being spent in the production and distribution processes. Understanding these costs is the first step in being able to control them. It is very important that a company chooses the appropriate type of costing system for their product type and industry. One type of costing system that is used in certain industries is process costing that varies from other types of costing (such as job costing) in some ways. In process costing unit costs are more like averages, the process-costing system requires less bookkeeping than does a job-order costing system. Thus, some companies often prefer to use the process-costing system.

tudy of vehicle manufacturing processes from raw materialto finish vehicles.•Study of Vehicle Tracking System (VTS) & equipment interface.•Auto closing system (Concept, design &fabrication)of floor service pit to improve safety of human.

 SUBMITTED BY-------------------4TH

YEAR ELECTRICAL ENGINEERINGYMCA INSTITUTE OF ENGINEERINGFARIDABAD

tudy of vehicle manufacturing processes from raw materialto finish vehicles.•Study of Vehicle Tracking System (VTS) & equipment interface.•Auto closing system (Concept, design &fabrication)of floor service pit to improve safety of human. SUBMITTED BY-------------------4THYEAR ELECTRICAL ENGINEERINGYMCA INSTITUTE OF ENGINEERINGFARIDABAD

COMPANY PROFILE MARUTI SUZUKI INDIA LIMITED Maruti Suzuki is one of India's leading automobile manufacturers and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned. Untilrecently, 18.28% of the company was owned by theIndian government, and 54.2% bySuzukiof Japan. The Indian government held aninitial public offeringof 25% of thecompany in June 2003. As of May 10, 2007, Govt. of India sold its complete share toIndian f inancia l inst i tut ions. With th is , Govt . of India no longer has stake in Marut iUdyog.Marut i  Udyog L imited (MUL)  was establ ished  in  February  1981,   though the actualproduction commenced in 1983 with the Maruti 800, based on theSuzuki Alto kei car  which at the time was the only modern car available in India, its' only competitors- theHindustan Ambassador andPremierPadminiwere both around 25 years out of date atthat point. Through 2004, Maruti has produced over 5 Million vehicles.Marutiare sold inIndia and various several other countries, depending upon export orders. Cars similar toMaruti (but not manufactured by MarutiUdyog) are sold by Suzuki and manufactured inPakistanand other South Asian countries.The company annual ly exports more than 50,000 cars and has an extremely largedomestic market in India selling over 730,000 cars annually.Maruti 800, till 2004, wasthe India's largest selling compact car ever since it was launched in 1983. More than amillion units of this car have been sold worldwide so far. Currently,MarutiAltotopsthesales charts and Maruti Swift is the

largest selling in A2 segment.Due to the large number of Maruti 800s sold in the Indian market, the term "Maruti" iscommonly used to refer to this compact car model. Till recently the term "Maruti", inpopular Indian culture, was associated to the Maruti 800 model.

 MARUTI SUZUKI INDIA LIMITED Maruti Suzuki India Limited, a subsidiary of Suzuki Motor Corporation of Japan, hasbeen the leader of the Indian car market for over two decades.It’s manufacturing facilities are located at two facilities Gurgaon and Manesar south of New Delh i . Marut i ’s Gurgaon fac i l i ty has an insta l led capaci ty of 350,000 uni ts per  annum. The Manesar facilities, launched in February 2007 comprise a vehicle assemblyplant with a capacity of 100,000 units per year and a Diesel Engine plant with an annualcapacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities have acombined capability to produce over 700,000 units annually.More than half the cars sold in India are Maruti cars. The company is a subsidiary of Suzuki Motor Corporation, Japan, which owns 54.2 per cent of Maruti. The rest is ownedby the public and financial institutions. It is listed on the Bombay Stock Exchange andNational Stock Exchange in India.During 2007-08,Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In all,over s ix mi l l ion Marut i cars are on Indian roads s ince the f i rst car was ro l led out onDecember 14,1983.Maruti Suzuki offers 12 models, Maruti 800, Omni, Alto, Versa, Gypsy, A Star, WagonR, Zen Estilo, Swift, Swift Dzire, SX4, Grand Vitara. Swift, Swift dzire, A star and SX4are maufactured in Manesar, Grand Vitara is imported from Japan as a completely builtunit (CBU), remaining all models are manufactured in Maruti Suzuki's Gurgaon Plant.Suzuki Motor Corporation, the parent company, is a global leader in mini and compactcars for three decades. Suzuki’s technical superiority lies in its ability to pack power andperformance into a compact, lightweight engine that is clean and fuel efficient.

Maruti is clearly an “employer of choice” for automotive engineers and young managersfrom across the country. Nearly 75,000 people are employed directly by Maruti and itspartners.The company vouches for customer satisfaction. For its sincere efforts it has been rated(by customers)first in customer satisfaction among all car makers in India for nine yearsin a row in annual survey by J D Power Asia Pacific.Maruti Suzuki was born as a government company, with Suzuki as a minor partner tomake a people 's car for middle c lass India . Over the years , the product range haswidened, ownership has changed hands and the

customer has evolved. What remainsunchanged, then and now, is Maruti’s mission to motorize India

BACKGROUND OF THE INDIAN AUTO INDUSTRYAlthough the Indian car industry was establ ished in the late fort ies , there was l i t t legrowth or technica l progress, as passenger cars were g iven very low pr ior i ty in thes c h e m e   o f   C e n t r a l i z e d   E c o n o m i c   P l a n n i n g .   I n  t h e   1 9 8 0 s ,   t h e   c a r   i n d u s t r y   w a s undergoing technological stagnation and was characterized by low production volumes,high cost and low productivity. The consumer had very little choice and the market wasselling just around 30,000 cars per year.There was a c lear need to provide a cost ef fect ive, re l iab le and qual i ty car to thecustomers. Maruti Suzuki India Limited was incorporated in such a scenario as a fullyowned Government Company on February 24, 1981 with a resolve to br ing aboutexpansion and technological modernization, of the automobile sector. Thus MSIL, whenstarted was entrusted with the task of achieving the following policy objectives:

Modernization of Indian Automobile Industry.•P ro d u c t i o n o f Ve h i c l e s i n l a rg e v o l u m e s , w h i c h w a s n e c e s s a r y f o r e c o n o m i cgrowth.•Production of Fuel-efficient vehicles to conserve scarce resourcesModernization of Indian Automobile Industry.•P ro d u c t i o n o f Ve h i c l e s i n l a rg e v o l u m e s , w h i c h w a s n e c e s s a r y f o r e c o n o m i cgrowth.•Production of Fuel-efficient vehicles to conserve scarce resources.Choice of product and collaborator •To achieve the above objectives, one of the foremost tasks before.Maruti SuzukiIndia Limited was to determine the most suitable product mix and to select them o s t s u i t a b l e f o r e i g n p a r t n e r w h o w o u l d b e w i l l i n g t o a c c e p t M S I L ‘ sr e q u i r e m e n t s i n t e r m s o f p r o d u c t m i x , t e c h n o l o g y t r a n s f e r , a n d e q u a l i t yparticipation and had the•

required technological expertise and experience in producing high quality, reliableand fuel efficient vehicles.A f t e r e x t e n s i v e d i s c u s s i o n w i t h s e v e r a l m a j o r E u r o p e a n a n d J a p a n e s e c a r  manufacturers, MUL chose Suzuki Motor Corporation (SMC) further increased its equityholding to 50% in the year 1992, converting . Maruti Suzuki India Limited, into a Non-Government Company with a total Equity base of Rs. 1322.92 million.ACKGROUND OF SMC S UZ U K I w a s f o u n d e d i n 1 9 0 9 a s S u z u k i Lo o m M a n u f a c t u r i n g C o m p a n y. I t s t a r t e dmanufacturing motorcycles in 1952 and has become a world leader in the manufactureof two-wheelers .SUZUKI started producing cars from 1955.Today it is Japan’s largestmanufacturers of small , fuel-efficient cars. At present the company’s name is SUZUKIMOTOR CORPORATION.

MARUTI SUZUKI INDIA

LIMITED SUZUKI AND MARUTI’S

WORLD-CLASS MANUFACTURI

NGFACILITIES AT MANES

AROn February 06,2007 Mr. Bhupend

era Singh Hooda ,Chief Minister of

Haryanainaugurated three world-class manufact

uring facilities set up by SMC and Maruti Suzuki

India Limited.The facilities inaugu

rated were as follows: 

•

MSIL’s fourth car Assembly plant.•

A diesel

engine and transmission plant, set up under

a joint ventureof SMC and MSILcalled Suzuki

Power train India Limited (SPIL)•

SMC’s

two-wheeler plant in Gurgaon, Suzuki Motorcyc

le IndiaPrivate Limited (SMIPL). INTRO

DUCTION TO MARUTI SUZUK

I INDIA LIMITED

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MARUTI SUZUKI INDIA LIMITED •

The

system then stores the data to the host

computer for storing analyzing and for futureuse

The data related to testing is handled by the

test management system or TMS

which in turn interacts with the PMS.•

At these

stations the magnetic RFID Tag communicates

with the tracking systemknown as PMS system

via the Tag Controller to exchange and

verify the data.Additionally, the RFID tags also

exchange data with other equipment and

machineson the assembly line in the same way,

using the Tag Controller. The Tag contains

the data related to the engine kept on the

palate.•

The RFID Tag will start receiving data

from set up station — for example, type of 

engine, engine number, master data, etc. As the

pallet goes along the line anddifferent operation

s are performed on the engine by various

machines, the RFID Tagcontinues collecting

data from machines recording the operation

done, its status, etc.When the pallet reaches

the release station, the entire data in

the RFID Tag istransferred to the PMS and after

updating, it is flushed from the Tag. Now the tag is

ready for the next engine loading.

MARUTI

SUZUKI INDIA LIMITED 

VTS

IN VEHICLE

INSPECTION(V

I)In theVehicle Inspection Shop, tracking

is done at two points:•

FC-ONand•

FC-OK

.•

After FC-OK, an FC-OK confirmation

Sticker is attached to rear window of thevehicle,

and then the vehicles are transferred to the

dispatch area.•

In the vehicle inspection shop,

the VTS is integrated with the TECH-1

systemwhich carries out the emission check

and the air bag check.•

Without the TECH-1

check FC-OK of the vehicle cannot be done.•

This ensures that the vehicle has been passed

through all the necessary checks.On the Quality

Front, the VTS interacts with the quality gate

system to provide faultstolerance. All

defects details are tracked through the VTS

to ensure that no vehicle getsFC-OK clearanc

e without rectifying the defects.

MARUTI

SUZUKI INDIA LIMITED Hence, VTS is a system

that offers real time data to facilitate quick

decision. It carriesout real time monitoring to

detect errors and quality issues well in

time; it broadcastsmessages that facilitate

in-line correct evection at the shop floor.