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COST SHEET ANALYSIS

GEECY ENGINEERING PVT. LTD.

Submitted by: - Pravin Gurav 18

Aditya Kadam 22
Sachin Kale 24
Nikita Sawant 44

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Sr.No. Contents Page No.
1 Acknowledgement 4

2 Objective of Report 5

3 Profile of Company 6

4 Summary of Company 7

5 Costing 9

6 Format of Cost Sheet 10

7 Methods of Costing 13

8 Process of Production 15

9 Analysis of Cost Sheet 22

Profit/ loss and Balance
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sheet
11 Conclusion 26

Index

Acknowledgement

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We are thankful to Prof. Anju Sawlani for giving us an
opportunity to prepare a cost sheet and analyze it. This has
been very helpful for us in understanding concepts and its
practical implications in business.
The satisfaction that we got by the successful completion of
any task would be incomplete without mentioning the name
of the people whose constant guidance and encouragement
has crowned all our efforts.
Firstly we would like to thank Mr. Kothari for giving us his
precious time and guidance that helped us a lot in
completing this project.
Last but not the least we would like to thank all those people
for their immense co-operation who helped us in any way
and without help of these people this project never be
completed successfully.
Submitted by: - Pravin Gurav 18
Aditya Kadam 22
Sachin Kale 24
Nikita Sawant 44

Objective of the Report

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The objective of the report is to study the balance sheet of a
manufacturing company and carry out the following:

To calculate per unit cost of equipment

Prepare Cost Sheet
Analyze the cost sheet

To achieve this purpose we have chosen Geecy Engineering

Pvt. Ltd and studied its annual report 2014-15.

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 Profile of the Company

Geecy At-a-Glance

Manufacture :- Heat Exchanger, Pressure Vessels, Columns.

Established in year :- 1991

CEO :- Mr. G.Sreekumar

Managing Director :- Mr. Manoj. M. Ruparel

Tel. :- 91-22-41570200

Email Id :- gepi@geecy.com

SUMMARY

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 Geecy Engineering Pvt. Ltd. is a company engaged in
the manufacture of Pressure Vessels, Heat Exchangers and
process equipments to Chemical, Petrochemical, Fertilizer
and Refineries.
Geecy Engineering Pvt. Ltd. Is an ISO 9001: 2008 Company
having ASME U & 'U2' Stamp certification adding value to
the product.
Their core manufacturing products are Heat Exchangers ,
Pressure Vessels, Columns, Clad equipments with material
of construction such as CS, SS, LAS, HIC / NACE, Duplex,
Cupro nickel, Monel & Titanium .
There cent addition of a CNC BTA drilling machine capacity
to drill 4000 mm diameter and thickness up to 1000mm has
added yet other in - house advantage in catering large
exchanger with heavy thick tube sheet.
India Limited has marked its presence with significant
achievements and today commands a market leadership
status. The story of success is based on dedication to nature,
corporate and process hygiene, dynamic leadership and
commitment to the partners and stakeholders. Geecy India
Ltd is considered as the leading consumer goods company in
India with a turnover of Rs. 40 Lacs . Products marketed all
over India. Wide and deep market penetration with 50 C&F
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agents, more than 5000 distributors and over 2.8
million retail outlets all over India.
Geecy Engineering Pvt. Ltd. has always meet the customer
requirements through continual improvement by meeting
quality and delivery.

COSTING
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Costing is the technique of ascertaining cost.
A cost sheet is a statement of cost prepared at given interval
of time showing various elements of cost of a product
produced, or service rendered during a particular period.
This statement gives details about total cost and cost per unit
at different stages of production.
Important components of cost are:
a)Prime Cost = Direct material cost + Direct labour
cost
b) Works Cost = Prime cost + Factory overheads.
c)Cost of production = Works cost + Office &
Administrative overheads.
d) Total Cost (Cost of sales) = Cost of production +
Selling & Distribution overheads.

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 Format of Cost Sheet:-

Particulars Amount Amount

Opening Stock of Raw Material ***
Add: Purchase of Raw materials ***
Add: Purchase Expenses ***
Less: Closing stock of Raw Materials ***
Raw Materials Consumed ***
Direct Wages (Labour) ***
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 ***

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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 ***
Add:- Selling and Distribution OH:-
Sales man Commission ***
Sales man salary ***
Traveling Expenses ***
Advertisement ***
Delivery man expenses ***
Sales Tax ***

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 Bad Debts ***

Cost of Sales (5) ***

Profit (balancing figure) ***
Sales ***

Methods of the costing:-

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 1) Job Costing :- Job cost record is a document used to
accumulate the costs of a Job. It is also known as JOB
ORDER costing.it is form of specific order costing
which implies where the work is undertaken as per
customers order and each order is of comparatively
short duration. Following are the variants of job
costing:-
Batch costing
Contract or Terminal Costing
Multiple or Composite Costing

2) Process Costing. These method is used in those

industries where production is done continously, such as
chemicals, oil, papers. It is difficult to trace the cost to
specific unit and total cost is average for the number of
units manufactured. Following are the variants of
process costing:-
Unit or Single Output Costing
Operating Service Costing
Operation Costing

Geecy Engineering pvt ltd followed Job Costing method,

that is production iws carried out as per specific order and
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customers specifications. Each Job or product is separate and
distinct from the other jobs or products. Every job is charged
with its own cost. Costs are collected to each job at the end
of completion. The company doesnt produce goods to keep
in warehouse. From the balance sheet of Geecy India Ltd.
as on 2015 and with the help of schedules to accounts and
notes to schedules we have prepared the cost sheet.

We have assumed the following for the preparation of

cost sheet
Rent has been assumed to be factory rent
Insurance has been taken on building
We assume that the land is used only for factory purpose.
As the company has variant products, the selling price
per unit cannot be estimated.So all the calculation of
sales has been limites to sales in rupees.

Process of production
1.Rolling

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In metalworking, rolling is a metal forming process in
which metal stock is passed through one or more pairs
of rolls to reduce the thickness and to make the thickness
uniform. The concept is similar to the rolling of dough.
Rolling is classified according to the temperature of the
metal rolled. If the temperature of the metal is above
its recrystallization temperature, then the process is known
ashot rolling. If the temperature of the metal is below its
temperature, the process is known as cold rolling

2.Welding

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Welding is a fabrication or sculptural process that joins
materials, usually metals or thermoplastics, by
causing fusion, which is distinct from lower temperature
metal-joining techniques such as brazing and soldering,
which do not melt the base metal. In addition to melting
the base metal, a filler material is often added to the joint
to form a pool of molten material (the weld pool) that
cools to form a joint that can be as strong as the base
material. Pressure may also be used in conjunction
with heat, or by itself, to produce a weld.

3.Grinding
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 Grinding practice is a large and diverse area
of manufacturing and toolmaking. It can produce very
fine finishes and very accurate dimensions; yet in mass
production contexts it can also rough out large volumes
of metal quite rapidly. It is usually better suited to the
machining of very hard materials than is "regular"
machining (that is, cutting larger chips with cutting tools
such as tool bits or milling cutters), and until recent
decades it was the only practical way to machine such
materials as hardened steels. Compared to "regular"
machining, it is usually better suited to taking very
shallow cuts, such as reducing a shafts diameter by half
a thousandth of an inch or 12.7 m.

4.Hydrostatic test
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 A hydrostatic test is a way in which pressure
vessels such as pipelines, plumbing, gas
cylinders, boilers and fuel tanks can be tested for
strength and leaks. The test involves filling the vessel or
pipe system with a liquid, usually water, which may be
dyed to aid in visual leak detection, and pressurization of
the vessel to the specified test pressure. Pressure
tightness can be tested by shutting off the supply valve
and observing whether there is a pressure loss. The
location of a leak can be visually identified more easily
if the water contains a colorant. Strength is usually tested
by measuring permanent deformation of the container.
Hydrostatic testing is the most common method
employed for testing pipes and pressure vessels. Using
this test helps maintain safety standards and durability of
a vessel over time.

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 ANALYSIS OF COST SHEET

Profit margin is 23% of net sales.

The total depreciation expense incurred during the year
is Rs. 69 lacs Depreciation on Plant and machinery.
COST SHEET FOR THE YEAR ENDED 31-
MAR-2015

DIRECT MATERIAL 178,323,035

PURCHASE 29,801,626
PRIME COST 208,124,661

FACTORY OVERHEADS 98,109,053

FACTORY COST 306,233,714

ADMINSTRATION O/H
DEP 6,972,204
COP/COGS/COS 313,205,918
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NET PROFIT 93,416,417

SALES 406,622,335

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 CONCLUSION

As the Geecy engineering industries produced their

equipment as per the customer orders therefore they follow
job costing method. On the basis of the survey we conclude
that the Geecy Engineering Industries have good sales and
there profit earned is also showing positive image of the
company.

The theoretical constructs of economics texts are of little

use; the platitude that increasing returns to scale cause
marginal to fall below average costs being one example,
since it relates only to brand new built from scratch systems.

Here I conclude that this is very useful Project work given

me by my project guide Mrs.Anju Sawlani. Once again I
would like to thank her for this great opportunity .

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