SUMMER TRAINING PROJECT PROPOSAL REPORT

ON

“COSTING SYSTEM IN CAVINKARE PVT LTD”

SUBMITTED TO : SUBMITTED BY: Prof. Sharad Kamra Prashant Sharma (Faculty Guide) (11CAM00226) ICFAI University,Jaipur MBA(2011-13) Under the Supervision of: Mr. Rohit Mishra (Company Guide)

INTRODUCTION COMPANY PROFILE:

Success is a journey not a destination. Began with a young mind choosing the road less taken. In 1983 with a single product, started out as a small partnership firm. The Company that began its journey as Chik India Ltd was renamed as Cavin Kare Pvt. Ltd (CKPL) in 1998. With innovative Entrepreneur C.K. Ranganathan at the helm, emerged into a successful business enterprise. Smart marketing and clear product positioning not only ensured CavinKare's growth but also helped the company broaden its product portfolio extensively. The company now markets ten major brands. Over the years, has achieved a competitive edge with sound understanding of mass marketing dynamics. The company offers quality Personal care (hair care, skin care, home care) and Food products borne out of a keen understanding of consumer needs and keeping up company's the values of innovation and customer satisfaction. Today,, having established a firm foothold in the national market, is increasing its popularity in the international arena. A dedicated Research & Development center, equipped with latest equipment and technologies, constantly supports the various divisions in their endeavor. The Company, which primarily relied on contract manufacturing for many years, has now set up its own world class plant at Haridwar to cater to the demand of both domestic and international market. Group has crossed a turnover of 11000 million INR in 2011-2012. The Company has employee strength of around 3000, an all India network of 5351 Stockiest catering to about 25 lakh outlets nationally. astute professionalism, innovative products and consistent quality are results of its significant corporate practice. "To succeed we believe that we need total commitment and highest standard of ethical and corporate behaviour in order to provide the best for our consumers, stakeholders and employees". The other group companies of Cavinkare – Packaging India Private Limited (PPIL), and Cavin Plastics and Chemicals Private Limited (CPL) have also established a firm foothold in the market with their innovative packaging products and trunkey services.

Corporate Vision “We shall achieve growth by continuously offering unique products and services that would give customers utmost satisfaction and thereby be a role model.”

Manufacturing at Cavinkare

Cavinkare manufactures its entire portfolio of products through inhouse plant at Haridwar(Uttarakhand) and as well through Contract Manufacturing by outsourcing it to Third Party Manufacturing Units. The Third party units are located across India in places like Pondicherry, Noida, Assam and Faridabad. These units produce and pack various products under the different CavinKare brands. CavinKare makes sure that quality and consistency is maintained in all of these units as per the R & D specifications and manufacturing standards. CavinKare Pvt Ltd, Plot no.16,17, Sector - 4 IIE, SIDCUL Ranipur Hardwar - 249403 Ph : 01334 239246/7 , 326156

PRODUCTS MANUFACTURED AT CAVINKARE HARIDWAR

Shampoo -; Nyle; Meera; karthika Fairness Cream - Fairever Body Lotion - Talcum powder - Spinz Hair dye - Indica Hair wash powder – Meera

Range of Range of Range of Range of Cavin Kare ProductsCavin Kare ProductsCavin Kare ProductsCavin Kare Products

For the last two decades Cavinkare has been providing the Indian market with a range of high quality beauty and other products that are backed by modern research and development, a strong distribution network and above all a selection of the safest ingredients for the products.

SYNOPSIS

Practical work experience is the integral part of individual learning. An individual who is

learning management concept has to undergo this practical experience to be a future

executive.

Master of Business Administration (MBA) is two year program which inserts management

knowledge in an individual and to make individual completely practical, so practical

experience is must.

CAVINKARE Pvt. Ltd. offered me a project in Finance Section on “STANADARD COSTING” to understand costing concept of the organization.

It includes practical work experience through learning the costing system of plant.

The project is about to analysis the cost of various products in plant through techniques of costing. This project is basis on Costing Section, in brief :

Costing Section:

Activities undertaken in costing area:

A. Variance analysis(through standard & actual output) for all finished goods (FG) & semi

finished goods (SFG).

i) Ensure the detailed analysis of all variance for all FG & SFG production orders

created during JC (Journal Cycle). [JC is counted basis on 28 days in a month]

B. Variance settlement

C. Process order closing without any error

D. BOM (Bills Of Material) Analysis

E. Costing run: updating of conversion costs.

F. After completion of costing process MRP & Zasb (Assessable value) needs to be updated

in system

Variance analysis is used to get through Standard Costing technique. Costing technique help to present the data in a particular format so that decision making becomes easy. Costing techniques also help for controlling and reducing the costs.

Standard Costing: Standard costs are predetermined costs relating to material, labor and

overheads. Though they are predetermined, they are worked out on scientific basis by

conducting technical analysis. They are computed for all elements of costs such as material,

labor and overheads. The main objective of fixation of standard cost is to have benchmark

against which the actual performance can be compared. This means that the actual costs are

compared with the standards. The difference is called as ‘variance’. If actual costs are more

than the standard, the variance is ‘adverse’ while if actual costs are less than the standard,

the variance is ‘favorable’. The adverse variances are analyzed and reasons for the same are

found out. Favorable variances may also be analyzed to find out the reasons behind the same.

Standard costing, thus is an important technique for cost control and reduction.

That is understandable in this project.

Objectives

1. To ascertain the cost of production on per unit basis, for example, cost per kg, cost per

meter, cost per liter, cost per ton etc.

2. Cost accounting helps in the determination of selling price. Cost accounting enables to

determine the cost of production on a scientific basis and it helps to fix the selling price.

3. Cost accounting helps in cost control and cost reduction.

4. Cost accounting also helps in locating wastages, inefficiencies and other loopholes in the

production processes/services offered.

5. Cost accounting helps in presentation of relevant data to the management which helps in

Decision making. Decision making is one of the important functions of Management and

it requires presentation of relevant data. Cost accounting enables presentation of relevant

data in a systematic manner so that decision making becomes possible.

6. Cost accounting also helps in estimation of costs for the future.

Benefit to the Organization:

A. To analyze the procedure to be followed while preparing the annual budget.

B. To analyze the variances occurred in various segments of company

C. To study standard costing of materials, labor and overheads and how to set these

standards.

D. To understand significance of variance analysis to curtail cost associated with cost

Components

E. To study performance measurement through variance analysis

F. To study significance of standard cost in budget preparation

Limitation of the study:

It is the responsibility of the employees working in accounts function that the procedures put in

place are practiced in its entirely & without any deviations. So a trainee is not supposed to

involve directly in process which includes real data because its confindential information of

finance for company. It can be done under guidance and practical interpretation basis on last

used data.

Its give practical but small view of costing process, not a complete and depth study.

The methodology is adopted : Data collection:

v Primary data: Data which is collected on our own is called primary data.

A. I used to collect the data from their internal sources i.e. SAP (System Application

Program) which is ERP program used as a software for their internal working.

i) Data analysis: The data is used to analyze through material variance report, process

order status, conversion cost reports of CavinKare, Hardwar.

B. Personal interaction with company guide.

C. Discussion with other officials.

D. Group discussion and suggestions

E. Company’s policies and circulars.

v Secondary data: Already existing data is called secondary data. It has been collected

by the following methods:

A. Company’s website.

B. Articles in company’s internal newsletters/periodicals.

C. Books & Others sources.

Schedule:

SIP at Cavinkare Pvt Ltd.

22nd May- 31st May Overview of Company & its finance

section by company guide

01st June- 15th June Learning various financial transactions

& processes and plant visits

16th June- 15th July Learning knowledge of costing concepts

& Calculations of company by company

guide

16th July- 15th August Seek practical knowledge through

preparation of various practical cost

reports e.g. Material variance report,

conversion cost report etc. of company

under guidance of co. guide

15th August onwards Certification Program (evaluation by

Company guide and Department Head)

*Various Cost Reports(work) and Projects(assignments) is also used to give for

preparing it by company guide or accounts head to a trainee and supposed to

submit on time or before deadline,regularily.

BIBLOGRAPHY:

1. Cost & Management Accounting (ICWAI Module)

2. SAP (ERP Program of company)

3. www.cavinkare.com

Me @ Cavinkare Pvt Ltd