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1. INTRODUCTION:
Natural fibers cotton, flax, silk, and wool represent the major fibers available
to ancient civilizations. The earliest known samples of yarn and fabric of any kind
were found near Switzerland, where bundles of flax fibers and yarns and fragments
of plain-weave linen fabric, were estimated to be about 7,000 years old.
Cotton has also been cultivated and used to make fabrics for at least
7,000 years. It may have existed in Egypt as early as 12,000 B.C. Fragments of
cotton fabrics have been found by archeologists in Mexico (from 3500 B.C. )., in
India (3000 B.C. ), in Peru (2500 B.C. ), and in the southwestern United States(500 B.C. ). Cotton did not achieve commercial importance in Europe until after
the colonization of the New World. Silk culture remained a specialty of the
Chinese from its beginnings (2600 B.C.) until the sixth century, when silkworms
were first raised in the Byzantine Empire.
Synthetic fibers did not appear until much later. The first synthetic,
rayon, made from cotton or wood fibers, was developed in 1891, but not
commercially produced until 1911. Almost a half a century later, nylon was
invented, followed by the various forms of polyester. Synthetic fibers reduced the
world demand for natural fibers and expanded applications. Until about 1300, yarn
was spun on the spindle and whorl. A spindle is a rounded stick with tapered ends
to which the fibers are attached and twisted; a whorl is a weight attached to the
spindle that acts as a flywheel to keep the spindle rotating. The fibers were pulledby hand from a bundle of carded fibers tied to a stick called a distaff. In hand
carding, fibers are placed between two boards covered with leather, through which
protrude fine wire hooks that catch the fibers as one board is pulled gently across
the other.
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The spindle, which hangs from the fibers, twists the fibers as it rotates
downward, and spins a length of yarn as it pulls away from the fiber bundle. When
the spindle reaches the floor, the spinner winds the yarn around the spindle to
secure it and then starts the process again. This is continued until all of the fiber is
spun or until the spindle is full.
A major improvement was the spinning wheel, invented in India
between 500 and 1000 A.D. and first used in Europe during the middle Ages. A
horizontally mounted spindle is connected to a large, hand-driven wheel by a
circular band. The distaff is mounted at one end of the spinning wheel and the fiber
is fed by hand to the spindle, which turns as the wheel turns. A component called
the flyer twists the thread just before it is wound on a bobbin. The spindle and
bobbin are attached to the wheel by separate parts, so that the bobbin turns more
slowly than does the spindle. Thus, thread can be twisted and wound at the same
time. About 150 years later, the Saxon wheel was introduced. Operated by a foot
pedal, the Saxon wheel allowed both hands the freedom to work the fibers.
1.2Yarn
Yarn consists of several strands of material twisted together. Each strand
is in turn, made of fibers, all shorter than the piece of yarn that they form. These
short fibers are spun into longer filaments to make the yarn. Long continuous
strands may only require additional twisting to make them into yarns. Sometimes
they are put through an additional process called texturing.
The characteristics of spun yarn depend, in part, on the amount of twist given to
the fibers during spinning. A fairly high degree of twist produces strong yarn; a
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low twist produces softer, more lustrous yarn; and a very tight twist produces crepe
yarn. Yarns are also classified by their number of parts. A single yarn is made
from a group of filament or staple fibers twisted together. Ply yarns are made by
twisting two or more single yarns. Cord yarns are made by twisting together two or
more ply yarns.
1.3 Raw Materials
About 15 different types of fibers are used to make yarn. These fibers fall
into two categories, natural and synthetic. Natural fibers are those that are obtained
from a plant or an animal and are mainly used in weaving textiles. The most
abundant and commonly used plant fiber is cotton, gathered from the cotton boil or
seed pod when it is mature.
Fibers taken from the plant leaf or stern are generally used for rope. Other
plant fibers include acetate (made from wood pulp or cotton linters) and linen,
made from flax, a vegetable fiber. Animal fibers include wool, made from sheep
hair, and mohair, made from angora goats and rabbits. Silk is a protein extruded in
long, continuous strands by the silkworm as it weaves its cocoon.
Synthetic fibers are made by forcing a thick solution of polymerized
chemicals through spinneret nozzles and hardening the resulting filament in a
chemical bath. These include acrylic, nylon, polyester, polyolefin, rayon, spandex,
and triacetate. Some of these fibers have similar characteristics to the natural fibers
without the shrinkage problems. Other fibers have special properties for specific
applications. For instance, spandex can be stretched over 500% without breaking
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Fibers are shipped in bales, which are opened by hand or machine. The
picker loosens and separates the lumps of fiber and also cleans the fiber if
necessary. The carding machine separates the fibers and pulls them into somewhat
parallel form. The thin web of fibers formed then passes through a funnel-shaped
device that produces a ropelike strand of parallel fibers. Rollers elongate the
strand, called a sliver, into a single more uniform strand that is given a small
amount of twist and fed into large cans.
1.4 The Manufacturing Process
There are three major spinning processes: cotton, worsted or long-staple,
or wool. Synthetic staple fibers can be made with any of these processes. Since
more yarn is produced with the cotton process than the other two, its manufacture
is described below.
Preparing the fibers
Fibers are shipped in bales, which are opened by hand or machine. Natural
fibers may require cleaning, whereas synthetic fibers only require separating.
The picker loosens and separates the lumps of fiber and also cleans the fiber
if necessary. Blending of different staple fibers may be required for certain
applications. Blending may be done during formation of the lap, during
carding, or during drawing out. Quantities of each fiber are measured
carefully and their proportions are consistently maintained.
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Carding
The carding machine is set with hundreds of fine wires that separate the
fibers and pull them into somewhat parallel form. A thin web of fiber is
formed, and as it moves along, it passes through a funnel-shaped device that
produces a ropelike strand of parallel fibers. Blending can take place by
joining laps of different fibers.
Combing
When a smoother, finer yarn is required, fibers are subjected to a further
paralleling method. A comb like device arranges fibers into parallel form,
with short fibers falling out of the strand.
Drawing out
After carding or combing, the fiber mass is referred to as the sliver. Several
slivers are combined before this process. A series of rollers rotating at
different rates of speed elongate the sliver into a single more uniform strand
that is given a small amount of twist and fed into large cans. Carded slivers
are drawn twice after carding. Combed slivers are drawn once before
combing and twice more after combing.
Twisting
The sliver is fed through a machine called the roving frame, where the
strands of fiber are further elongated and given additional twist. These
strands are called the roving.
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Spinning
The predominant commercial systems of yarn formation are ring spinning
and open-end spinning. In ring spinning, the roving is fed from the spool
through rollers. These rollers elongate the roving, which passes through the
eyelet, moving down The sliver is fed through a machine called the roving
frame, where the strands of fiber are further elongated and given additional
twist. The predominant commercial systems of yarn formation are ring
spinning and open-end spinning. Open-end spinning omits the roving step.
and through the traveler. The traveler moves freely around the stationary
ring at 4,000 to 12,000 revolutions per minute. The spindle turns the bobbin
at a constant speed. This turning of the bobbin and the movement of the
traveler twists and winds the yarn in one operation.
Open-end spinning omits the roving step. Instead, a sliver of fibers is fed
into the spinner by a stream of air. The sliver is delivered to a rotary beater
that separates the fibers into a thin stream that is carried into the rotor by a
current of air through a tube or duct and is deposited in a V-shaped groove
along the sides of the rotor. As the rotor turns, twist is produced. A constant
stream of new fibers enters the rotor, is distributed in the groove, and is
removed at the end of the formed yarn.
1.5 TEXTILE INDUSTRY
Back in the 18th century the textile was generally based on processing
wool. The wool, as it has already been mentioned, was processed industry
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wool, which was processed individually by individual artisans. Their
work was home-based and they had their own individual premises at home
to do the spinning and the weaving of the wool in order to process it.
Ordinarily, house like this were called weavers cottages. Great Britain was
the first to start the revolution in the sphere of textile industry due to the fact
that it had lost of raw materials obtained from its countless colonies. The
wool processing took much time and a lot of wool became very hard tohandle. Basically, the textile industry was the main industry for many
countries in the 18th century.
1.6 Origin of textile industry:
The individual artisans used handlooms and spinning wheels as the
primary tools for processing textiles. The handloom was originally a Roman
invention that was used to cope produce yarn with interlaced threads this
was the way artisan-workers obtained cloth some of which afterwards was
converted into clothes and some remained cloth and was stored. The process
of obtaining yard was very difficult as the worker had to size the yarn, dry it,
and beam it in the handloom. Usually the cloths needed to be bleached, so
the artisans soaked it in lactic acid and then dried in the open sun. So
generally it took almost eight month before the cloth was completely ready.
The processes of weaving, spinning and carding took a lot of precious time
and were not that profitable for the workers, but their only way for their
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families to survive. Artisans had difficulties in making the cloth different
from what they usually did, especially when they were asked for a wider
cloth, because it meant that more than two people had to be at the handloom
for a long time in order to achieve this result. Some textiles were dirty at the
moment when they were to be processed so therefore they were cleaned. The
technology of cleaning the textiles from dirt before the industrialization
period was called willowing. So the members of the artisans family had to
clean the textiles by hand which was very exhausting and took quite a long
time.
The spinning of the textile was made with the help of a stick that was
nearly 3 feet long. The person doing it had to be really skillful as he was
supposed to hold the stick under his left arm and the forefinger and the
thumb of his right hand neatly twisted the wool fibers obtained from the
stick. Then the thread got on a spindle.
Basically, the whole process of getting cloth can be presented as a scheme:
Carding: Children did the carding. They were supposed to remove the
short fibers with the help of a hand-card. A hand-card was a wooden block
with small handles and had spikes made from metal its surface.
Spinning: Was usually made by a woman and it was a process of
converting cardings to yarn with the help of a spinning wheel.
Weaving: With the help of a handloom the yarn was made into cloth.
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This work was conducted by a man and concluded the whole procedure of
processing the textiles.
It is common knowledge now that he 18th century domestic system did not
provide any solutions in dealing with wool, cotton, silk and flax, as these
were the most used materials back then . Weaving, spinning and carding
were the only options of conversion of the textiles into different goods.
Being the heart of the textile industry, Great Britain was very much
interested in the export of woolen goods and as the result needed a fast and
high-quality production of these goods, which individual production could
not give by any means.
1.7 Changes in management and textile industry:
The changes that took place within the textile industry
are enormous. The Industrial Revolution produced the result
the industry was so much expecting a greater amount of
fabric was produced in less time at a lower cost. Of course it
meant more money for the countries but at the same time
factories required millions of workers in order to constantly
increase the productivity and therefore the profit. The major
minus and may be the most visible sign of lack of
professionalism of the factory management was that they
strived for having the more the workers the better not taking
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into account various factors, such as the conditions of work,
the age requirements and contraindications and the
sometimes even the decline of quality due to a non-rational
exploitation of the machinery. Though the profits from the
factories were huge people got tiny wages and sometimes
were almost starving. This is what concerns the
management of the textile factories.
Nevertheless, the new machinery used showed outstanding
results. It completely changed the technology of textile
manufacturing making it more qualified and professional.
The industry was changed inside out. The new level of
productivity brought its fruits. New quality textiles were
improved and something new was added in the process of
work. Of course they did have disadvantages such as the
danger of the industry, nevertheless clothes became more
available and yarn became very cheap and affordable. The
new technology saved time and money making a huge step
in the technical progress of the worldshistory.
The Industrial revolution converted the domestic textile
system into the factory system, which factions faster and
better. The textile processing was not made by hand
anymore. This separated humanity from the primitive
existence. Before the Industrial Revolution people had to
work at home, dedicating all their time to the textile
manufacturing through weaving, spinning and carding. The
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Industrial Revolution brought new inventions that absolutely
changed the situation. Workers had a working place, did not
have no work at home anymore and the manufacturing
became faster. The textile industry provided a strong base
for the economy.
1.8 Textile Industry in India:
The textile industry occupies a unique place in our
country. One of the earliest to come into existence in India, it
accounts for 14% of the total Industrial production,contributes to nearly 30% of the total exports and is the
second largest employment generator after agriculture.
Textile Industry is providing one of the most basic
needs of people and the holds importance; maintaining
sustained growth for improving quality of life. It has a unique
position as a self-reliant industry, from the production of raw
materials to the delivery of finished products, with
substantial value-addition at each stage of processing; it is a
major contribution to the countrys economy.
Indian textile industry has the highest loom age including
handlooms in the world. It contributes about 61% to the world
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loom age. It also contributes about 12% to the world production of
textile fibers and yarns including jute. It is the largest producer of
jute, second largest producer of silk, third largest producer of
cotton and cellulosic fiber/yarn and fifth largest producer of
synthetic fibers/yarns.
Financial Year-wise, Variety-wise Production of Yarn
(Qty. in Million Kgs.)
Financial
Year
Cotton
Yarn
Blended
Yarn
100% NonCotton
Yarn
Total
Qty.
Growth
rate
. Qty. Growthrate
%Share
Qty. Growthrate
%Share
Qty. Growth rate %Share
. .
1995-1996 1788 13% 75% 395 14% 17% 195 23% 8% 2378 14%
1996-1997 2148 20% 77% 484 22% 17% 162 -17% 6% 2794 17%
1997-1998 2213 3% 74% 583 20% 20% 178 10% 6% 2973 6%
1998-1999 2022 -9% 72% 595 2% 21% 191 7% 7% 2808 -6%
1999-2000 2204 9% 72% 621 4% 20% 221 16% 7% 3046 8%
2000-2001 2268 3% 72% 644 4% 20% 246 11% 8% 3158 4%
2001-2002 2212 -2% 71% 609 -5% 20% 280 14% 9% 3101 -2%
2002-2003 2177 -2% 71% 584 -4% 19% 319 14% 10% 3080 -1%
2003-2004 2121 -3% 69% 589 1% 19% 342 7% 11% 3052 -1%
2004-2005 2272 7% 70% 585 -1% 18% 366 7% 11% 3223 6%
2005-2006 2521 11% 73% 588 1% 17% 349 -5% 10% 3458 7%
2006-2007 2824 12% 74% 635 8% 17% 355 2% 9% 3813 10%
2007-2008 2948 4% 74% 677 7% 17% 378 6% 9% 4003 5%
2008-2009 2899 -2% 74% 655 -3% 17% 361 -5% 9% 3914 -2%
2008-2009 754 4% 74% 170 6% 17% 90 -3% 9% 1014 3%
2009-2010
(Apr-Jan)743 -1% 74% 161 -5% 16% 96 7% 10% 1001 -1%
Source: Ministry of Textiles, Government of India.
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1.9 BACKGROUND INFORMATION
The textile industry plays a pivotal role in the Indian
economy. The country has produced legends such as Dhaka
muslin, which was woven so fine and light that it could pass
through a finger ring. But what is significant today is that
this sector contributes substantially in providing employment
and earning foreign exchange. The country is rich in natural
resources such as cotton, jute and silk. The textile industry isthe second largest employer, after agriculture, with a total
workforce of around 35 million. India is next only to China
among the world's largest producers of textiles and
garments. The industry is the largest foreign exchange
earner, as the import content is insignificant compared with
those of other major export products. Its contribution in
exports is nearly 20 per cent. How many of us know that 85
per cent of the handlooms in the world are produced in
India? The number of handlooms in the country is four
million. The activities in textiles range from the production of
natural raw materials such as cotton, jute, silk and wool to
the manufacture of quality products such as cellulose fibre,
synthetic filament and spun yarn. This is, perhaps, the only
industry that is self-reliant and complete in value addition
from raw materials to the highest value-added products.
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The textile industry occupies a unique place in our
country. One of the earliest to come into existence in India, it
accounts for 14% of the total Industrial production,
contributes to nearly 30% of the total exports and is the
second largest employment generator after agriculture.
Textile Industry is providing one of the most basic needs of
people and the holds importance; maintaining sustained
growth for improving quality of life. It has a unique position
as a self-reliant industry, from the production of raw
materials to the delivery of finished products, withsubstantial value-addition at each stage of processing; it is a
major contribution to the country's economy. Its vast
potential for creation of employment opportunities in the
agricultural, industrial, organized and decentralized sectors
& rural and urban areas, particularly for women and the
disadvantaged is noteworthy
Against all these merits, an experts lament goes: "It is
difficult to find such a large-scale industry in the country that
is so disorganized as the Indian textile industry". The
industry is often plagued by obsolescence, unhealthy
regulations and problems of lab our. This emphasizes the
need for strengthening the management mechanism in the
industry, to face the emerging international challenges.
Common sense administration has its in-built constraints in a
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world where scientific management decides the destiny of
industries in the modern global scenario.
The textile industry in India will face intensified competition
in both their export and domestic markets. However, the
migration of textile capacity will be influenced by objective
competitive factors and will be hampered by the presence of
distorting domestic measures and weak domestic
infrastructure in several developing and least developed
countries
The challenges from global competition demand a scientific
approach from properly trained management professionals
who have specialised in this sector. Sickness and inter-sector
contradictions that are a bane of the industry have to be
solved through a wise approach and well-calibrated steps, to
ensure healthy growth. Managers who are trained in
traditional management disciplines will take a long time to
get themselves familiarized with the special problems of the
textile scene. A strong and competent cadre of trained
mangers will help the continuous upgrading of knowledge
and skills, fulfilling the need for maintaining a cutting edge in
the world of intense competition.
The Future:
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Spinning systems and yarn manufacturing machinery will continue to
become more automated and will be integrated as part of a manufacturing
unit rather than as a separate process. Spinning machines have already been
developed that combine carding and drawing functions. Production rates will
increase by orders of magnitude as machines become available with even
more spindles. Robot-controlled equipment will become standard.
Domestic yarn producers will continue to be threatened by competition from
other countries, as these continue to buy the latest textile machinery
technology. Higher domestic material prices will not help, since the cost of
the raw material can represent up to 63% of the total cost of producing the
yarn. Indian yarn producers will continue to form alliances with their
customers and customers' customers to remain competitive. The textile
industry is also forming unique partnerships. The Indian Textile Partnership
is a collaborative research and development program among industry,
Government, and academia aimed at strengthening the competitiveness of
the industry.
Yarn producers will have to incorporate pollution prevention measures to
meet the air and water quality restrictions. Equipment manufacturers will
continue to play an important role in this endeavor.
1.10 Chapter scheme:
I. Deals with the introduction.
II. Profile of Janaki Cotton Mills limited and objectives.
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III. Research Methodology , Scope of the study & Theoretical view of
Budgetary Control and Linear trend.
IV. Analysis and Interpretations.
V. Deals with Findings and Conclusion
2. (A) COMPANY PROFILE
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Janaki cotton mills limitedhas been started at the year of 1991. It is
located at Tirunelveli district on the way to Kannyakumari just 5 Km from
Vallioor. The total area of this mills premise is 10 Acres. 70% of the area
is utilized for the machinery building. Remaining areas are utilized for
plantation of trees. Trees like teak, mango, neem, coconut etc are well
maintained. The organization is giving more importance for environment
protection. The company commenced commercial production of yarn in
1994.
2. 1. Management:
The company is manged by professional and skilled workers under the
leadership of Mr.Sudalaimuthu - Managing Director, other directors are
Mr.S.S.Muthu(whole time Director), Mr.A. Swaminathan, Mr.A.Navaneetha
Krishnan, Mr.Adam, Mr.S.Sakkaraiappan, Mr.C.Jeyaraj, Mr.S.Nambirajan
and Mrs.S.Muthulakshmi.
In 2008 the mill was certified by ISO 9001:2008 for the quality
Management system in supply and Manufacturing of Yarn producing. The
management improved its turnover and profitability over the year
remarkably and all its borrowing accounts have been regular.
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JANAKI COTTON MILLS LIMITED
ORGANISATION CHART
MANAGING DIRECTOR
CEO
_____________________________________________________
PURCHASE PRODUCTION ADMINISTRATIVE ACCOUNT
MANAGER MANAGER MANAGER MANAGER
EXECUTIVE QUALITY&LAB TEST OFFICE EXECUTIVE ACCOUNTS
(Purchase and sales) EXECUTIVE
_______________________________
OPERATORS SUPERVISIONS(Manufacturing, packaging, dispatching) (Maintenance, electrical & Mechanical)
In 1993 the mill has started with 2600 spindles. In the early stage the yarn
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produced was used for bet sheet and towels. The count of yarn spun were
20s,30s,2/20s, NE. The number of labours employed was 50.
In 1997 the mill was expanded the spindles with 2900 and the total
spindles was 5500. The count of yarn spun were 20s, 30s, 40s,2/20s,NE..
The quality of yarn was improved from weft to warp. The number of
labours employed was 110.
In 2000 the mill was expanded the spindles with 6500 and the total
spindle was 12,000. The counts of yarn spun were 20s,30s,40s,NE. The
quality of yarn was improved from weft to warp to hosiery. The
management gave most importance for quality .
In 2003 the mill has expanded the spindles up to 12,000 with latest
machineries imported from foreign countries. The counts of yarn spun were
20s,30s,40s,52s,NE. The turnover of the company was around
Rs.12,00,00,000 per Annum. The quality of yarn was improved from warp
to hosiery.
In 2006 the mill has expanded the spindles up to 15,000 with latest
machineries from leading machineries manufacturers.
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1. Rieter Draw Frame model D35 from M/s Rieter Machine Works,
Germany.
2. Lakshmi Ring Frame Model LR6/S from M/s Lakshmi Machine Works
Ltd., Coimbatore.
3. Muratec Automatic winding machine from Murata Machinery Limited.
4. Sehalforst - Autoconer 338 Machine imported from Germany.
Recently the mill has installed another one fully automatic winding
No.21C process coner manufactured by Murata Machinery, Japan. The cost
of this machine is around Rs.1, 10, 00,000/-. Now 50% the production of
yarn to exported in foreign countries. The turnover of the company was
around Rs.15crores. The number of labours employed was 180.
2.2. Source of Material:
The raw material required for this industry is quality cotton with a
staple length of about 29mm and above and fiber fineness of 3 to 5 micro
grams per inch, with 2 to 4 percent of trash. The company uses RG-34,
MCU-5, MECH-1, DCE-32, SANKAR-4 varieties of cotton. Cotton is
available in abundance in Punjab, Maharashtra, Andhra Pradesh, Gujarat,
Karnataka and Tamil Nadu. From inter stages only 10% of cotton are
consumed and 75% of cotton from the up countries and balance from abroad
particularly in West Africa.
World's No: 1 Cotton producer is China and India ranked 2nd place
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and next comes America and Africa. Egypt is producing super fine quality
cotton. The company adopts a prudent policy of cotton procurement and
resorts to purchase from several states. The managing Director is well
trained and experienced in selection of good quality cotton and entering into
foreign contracts. He is well connected with reputed suppliers of local and
up country cotton. Hence no problem is envisaged in purchasing quality
cotton at optimum prices.
As the raw material is easily available, entering into long term
arrangements for supply of cotton isn't warranted.
2. 3 Quality Control Software:
Here the software used is for estimating the linear density is (Number)
strength of yarn samples (Thread). The length of sample yarn is 120 yards.
The sample is wound in Wrap Reel removed and placed on the Electronic
scale. The software automatically accounts the weight. The sample is placed
on the strength tester. Here the treads are broken and the strength at the time
of break is accounted by the software with this weight and strength count
and CSP(count, strength product) of yarn is estimated.
2.4. Other Sources:
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Power:
The mill is presently with a high 1100 v tension power connection.
The total sanctioned load is 1200 KVA. The prudent availed load is
1000 KVA. The mill has total capacity of 800 KVA. Two Generators
of capacities 125 KVA and 350 KVA are existing.
Water:
Water requirement for this unit is very limited. There exist 3" Bore
wells and 4.5" Bore wells with copious supply of water, inside themill premises. No water problem is envisaged.
Transport:
The mill is situated on the Tirunelveli District. On the way of
Kannyakumari National highway (NH7). The transportation facilities
are very favorable to the mill.
Labour Profile:
The mill is situated at parkland village, which is surrounded by many
villages via, Kalandhapanai, Paaraydi village, South valliyoor,
viswasapuram,Rosmiyapuram, Pampankulam, kumarapuram,
Kallikulam.where from the unit can get labours. Periodical training
programmers are being conducted to train the work men. Quality
circles are functioning to achieve involvement and work culture
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among the workmen.
Labours employed in mills are skilled and semi - skilled.
Qualifications needed for semi -skilled worker area 8th STD. For
skilled worker they have to gone through ITI or Diploma course.
Payroll:
Payroll is a software consists of Bio-data of labours, wages earned,
PF deducted etc. Payroll is used for maintenance of details of labours,working in the mills.
Attendance:
All labours given one token with code number. Every labour entering
the gate is putting their token in a particular box. After it should
record the attendance register, The token is returned to the labours
when they are going out at the end of shift.
Working hours:
The weekly working hours of the industry are fixed on shift basis.
There are 3 shifts per day. Each shift consists of 8 hour as
1st shift - 08.00 am to 04.30 pm
2nd shift - 04.30 pm to 12.30 pm
3rd shift - 12.30 pm to 08.00 am
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It is applicable for laborers. The officer and executive have working
time from 9 am to 1 pm and 2 pm to 5.30 pm. They have lunch break
between 1 pm to 2 pm. Every year in addition to three national
holidays, the employees are having sixteen festival holidays.
Leave Facilities:
The following leave facilities are available to the employees of
Janaki Cotton Mills.
Casual Leave:
The staffs are allowed 7 days casual leave.
Earn Leave:
The staffs are allowed 20 days earn leave. The laborers are allowed
one earn leave for every 15 days.
Medical Leave:
The staffs are allowed 8 days medical leave. The industry is covered
under ESI.
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Housing Facilities:
Housing is the primary need of human beings in a civilized life. It
constitutes the most important part if the physical environment which
continuously influences man's health and well being. The health,
happiness, general manners and morale of the people in urban areas to a
large extend are influenced by the conditions of housing.
There are no of staff quarters provided by the industry. But the high
official persons are provided houses. They constructing Women Hostel in
their campus, however there are rooms available inside the industry tostay with all essential features.
Transport Facilities:
The employees are provided transport facilities on free of cost going
to the industry and come back to the home. The industry has 2 mini buses
for providing transport facilities by its own.
2.5. Other Facilities:
Safety from Machines & Training to workers:
The employees are provided helmet, shoes, mark, gloves, uniform etc
to prevent heat and from the machines. Special care is taken to provide
training to workers. Each department head identifies the training needs.
They intimate these to the administrative officer. Training is done as
monitoring is done by the department heads and the administrative officer.
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The training evaluation is done. Usually programmed is undue by the
authorized trainers. Training schedule is prepared once in a yearly. Induction
Training is also provided.
2.6. Machine Requirements:
The promoters have installed premium equipment in their mill. Details of the
machinery installed by various departments.
S.No. DEPARTMENT QUANTITY
1 Blow Room 2 lines
2 Carding Machine 8 Numbers
3 Draw Frame 4Numbers
4 Simplex 4Numbers
5 Ring Frames 30Numbers
6 Reeling 6 Numbers
7 Cone Winding 3 Numbers8 Bundling & Pressing 1 Numbers
9 Compressor 3 Numbers
10 Generator 2 Numbers
FLOW CHART OF PRODUCTION PROCESS
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Mixing
Blow Room
Carding
Drawing
Simplex
Spinning
_____________________________
Autoconer Cone winding
Packing Packing
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2.7. Details of Production Process:
Blow Room:
Cotton generally comes in the form of highly compressed bales,
which is well opened in the Blow room. Though this opening process,
foreign materials such as leaf, seed particles, dusty and other
impurities are removed with minimum loss of lint, which comes in
the form of lap. The degree of opening imparted to cotton in the blow
room has a good bearing on the yarn quality.
Carding:
This process further helps to individualize the fibres and to remove
foreign substances such as sand, dust, seed coat, leafy matter and
other impurities. It also removes the naps present in the lap and forms
a continuous uniform sliver of required hank.
Drawing:
Drawing helps equalize the crises crossed fibres of the card sliver with
one another and align them to the axes of the sliver through the
process of drafting. It removes the hooks if carded fiber and
straightens the Fibres by sliding them over one another. It helps to
homogeneously blend number of slivers from different cards, so as to
improve, the regularity in weight per unit length of the sliver.
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Simplex:
The diameter of the drawing sliver is reduced sufficiently before final
spinning of yarn. The delivered material roving is a continuous strand
of fibres twisted slightly before it is wound on bobbins for the next
process.
Spinning:
Spinning is the final process of converting cotton fibres into yarn,which involves the process of spinning together fibres, by drawing
them from fibrous mass and the drafted strand to form yarn of
required count. It is wound on ring bobbins.
Reeling / Winding:
Reeling / winding is the process where in the objectionable yarn
wasters are removed and the yarn on cops is transformed into
marketable Hank / Cone form.
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2. (B). Objectives of the study:
1. To know the Organization and Yarn Manufacturing process of Janaki
Cotton Mills Limited, Valliyoor, Tirunelveli district.
2. To analysis and forecast the production and sales level of Janaki Cotton
Mills limited.
Need for the study:
The study which will help to know the level of production capacity
and improve the financial performance of Janaki cotton Mills Ltd
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3. RESEARCH METHODOLOGY
3.1 Research Design:
The study is an analytical research. The researcher has used the
historical data for the analysis and made a critical evaluation of the materials.
3.2 Nature of study:
The nature of data that the researcher is used secondary data. Moreover the
researcher has collected relevant primary information regarding inventory
management practice of company through discussion with company officials and
observations.
3.3 Data collection:
The data for the study has been collected from the published statements, viz.,
Trading & Profit and Loss account and the Balance sheet contained in the annual
reports of the company.
3.4 Period of the study:
The financial and production related statement are helpful for the analysis of
firms performance and take decisions on the basis of analysis. For this purpose the
financial statement taken for a period of 2008-09.
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3.5 Scope of the study:
The present day is confined only in Janaki Cotton Mills Limited,
Tirunelveli district. The main focus of the study is to analysis the flexible
budget in Yarn manufacturing process and to find out the problem.
3.6. Tools of data analysis:
Budgeting Tools used for the analysis, they are
1. Flexible budget analysis.
2. Production budget and3. Linear trend.
3.6 Theoretical view of Budgeting:
Concept of budgeting:
One of the primary objectives of cost accounting is to provide
information to business management for planning and controlling.
Budgeting act as tool of both planning and control. Budgeting is a formal
process of financial planning using financial accounting data. The Institute
of Cost and Management, Accountants (UK) defines a budget as a
Financial and /or quantitative statement, prepared and approved prior of
time, of the policy to be pursued during that period for the purpose of
attaining a given objective. It may include income, expenditure and the
employment of capital.
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3.6.1. Budgeting and forecasting:
Sometimes the terms Budgeting and forecasting are used
interchangeably. Both terms have some similarities, for example, both relate
to future events and involve prediction of something. The basic difference
between budgeting and forecasting lies in degree of sophistication involved
in the predictions used by them. According to the National Association of
Accountants (USA), Forecasting is a process predicting or estimating a
future happening. Forecasting is an essential part of budgeting process.
Forecasting is estimating future events and their effects on the budget.
Forecasting come to an end after mere estimating. Budgeting is a process of
preparing budgets and further aspect are involved in procedure. Besides,
forecasting can be made by a firm for purpose other than budgeting, such as
a forecast of general business conditions.
3.6.2. Concept of Budgetary Control:
Budgetary control is a means of control in which the actual state of
affairs is compared with the budget so that appropriate action may be taken with
regard to any deviations before it is too late. Briefly, the use of a budget to
control a firms activities is known as budgeting control. Budgetary has the
1. To provide an organized procedure for planning. It provides a detailed plan
of actions for a business over a definite period of time.
2. To coordinate all the activities of various department of a business firm in
such a manner that the maximum profit will be achieved for the minimum
use of resources.
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3. To provide a means of determining the responsibility for all deviations from
the plan (budget), and to supply information on the basis of which necessary
corrective action may be taken. Thus, budgetary control has the objective of
controlling cost.
3.6.3. Objective And Function of budgeting:
An effective budgeting system is vital to the success o a business firm.
Budgeting firm. Budgeting is needed in organizations to perform the following
functions:
1. Planning,
2. Coordination,
3. Communication, and
4. Performance evaluation.
Planning:
Almost all business activities require some planning to ensure
efficient and maximum use of scarce resources. The budget is a formal
planning framework that all provides specific deadlines to achieve
departmental objective to contributes towards the overall objectives of an
organizations. A budget incorporates expected performance and present
managerial targets. Thes3e targets guide the business operations and help in
overcoming problems and analyzing the future. Budgeting influences the
formulation of all business strategies and subsequently assists business
managers in executing such strategies.
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Coordination:
Coordination is a managerial function under which all factors of production
and all departmental activities are balanced and integrated to achieve the objectives
of the organizations. The budgeting process provides the basis for individual in all
parts of the organization to exchange ideas on how best to achieve these objectives
in the following ways:
The existence of a well laid plan is the step towards achieving coordination.
Executives are forced to think of the relationships among individualoperations, and the company as a whole.
Budgets help to restrain the empire-building efforts of executives. Budgets
broaden individual thinking by helping to remove unconscious biases on the
part of engineers, sales and production officers.
Budgets help to search out weakness in the organizational structure. The
formulation and administration of budgets isolate problems of
communication, of fixed responsibility, and of working relationships.
Communication:
It is necessary is an efficient organization that all people be informed
about the objectives, policies, programmes and performances. This is made
possible through their participation in the budgeting process. Budgets
inform each manager of what other have agreed to do. They also inform
managers of the resources available to achieve objective and targets.
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Control and performance evaluation:
Budgeting enters into control three points:
a. When a budget is being formulated, departments analyze their plans
for the future and submit estimates as per their requirements,
justifying each of their demand by demonstrating a need.
b. After budgets of different departments have been reviewed and
approved they become targets that set desirable limits on spending.
c. At the end of the budget period, a comparison of actual expenditures
with budget expenditure is made as a mean of judging performance
and fixing responsibility for a deviation. Budgets are the basis of
performance evaluation in an organization as they reflect realistic
estimates of acceptable and expected performance. It is more
accurate, reliable and reasonable to measure current performance
against a budget rather than against a vague expectation or against
result of previous year when conditions might have changed.
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3.6.4 Advantages of Budgeting:
Budgeting plays an important role in the effective use of resource and
achieving overall organization goals. It has the following advantages:
1. Budgeting compels and motivates management to make an early and
timely study of its problems. It generates a sense of caution and care, and
adequate study among manager before decisions are made by them.
2. Budgeting provides a valuable means of controlling income and
expenditure of a business as it is a Plan for spending.
3. Budgeting provides a tool through which managerial policies and goals
are periodically evaluated, tested and tested and established as guidelines
for the entire organization.
4. Budgeting helps in directing capital and other resources into the most
profitable channels.
5. The use of budgeting in an organization develops an attitude of Cost
consciousness. Stimulates the effective use of resources, and creates an
environment of profit-mindedness throughout the organization.
6. It provides a norm, basis or yardstick for measuring performance of
departments in organizations.
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Limitations:
1. Planning, budgeting or forecasting is not exact science; it uses
approximations and judgment which may not be cent percent accurate.
At best, a budget is an estimate; no one knows precisely what will happen
in the future.
2. The Success and utility of budgeting depends upon on cooperation and
participation off all members of management. Many a time budgeting
has failed because executive management has paid only lip service to its
execution.
3. The establishment of a budgeting process takes time. Also, sometimes
too much is expected from a budget and in case expectations are not
fulfilled, the blame is put on the budget.
3.6.5. FLEXIBLE BUDGETING:
A flexible budget that is prepared for a range, i.e. for more than one
level of activity. It is set of alternative budget to different expected levels
of activity. The flexible budget is also known by other names, such as
variable budget, dynamic budget, sliding scale budget, step budget, expense
formula budget and expense control budget. The underlying principle of a
flexible budget might be developed that would apply to a relevant Range
of production; The flexible budget provides a reliable basis for comparison
because it is automatically geared to changes in production activity. A
flexible budget has the following important features:
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1. It covers range of activity (output).
2. It is flexible, i.e. easy to change with variation in production levels.
3. It facilitates performance measurement and evaluation.
Planning or budgeting for a range of activity rather than for a single level of
activity always preferable due to the uncertainty about the changes in
activity levels. In flexible budgeting, that ranges of activity is selected, With
one or more in between. Among different activity levels the most likely
activity level is made the basis for planning business operations. Flexible
budgeting makes it easy to adjust plans to changing production levels
without any delay. The flexibility involved in this budget makes a very
useful decision making tool for management.
3.6.5. (A) Steps in Flexible Budgeting:
The following steps involved in developing a Flexible budget:
1. Deciding the range of activity to which the budget is to be prepared.
2. Determining the cost behaviour patterns(Fixed, Variable)
3. Selecting the activity levels (generally in terms of production) in prepare
budgets at those levels.
4. Preparing the budget at each activity level selected by associating the
activity level with corresponding costs. The corresponding costs to be
attached with activity level are determined in terms of their behavior.
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(B) Advantages of Flexible Budget:
1. Accurate budgeting: The use of flexible budget may result in the
preparation of more accurate budgets. Flexible budgeting techniques
require that consideration is to be given to the output factor in the budget
preparation. Since all costs do not behave in the same manner (as some
costs rise faster than others when production increases) a budget giving
consideration to the volume (output) factor is bound to be more accurate
than one where volume is not considered.
2. Accurate performance measurement: The flexible budgeting technique
incorporates changes in activity level and compares actual result with the
budget in terms of output achieved. This facilitates more meaningful
more comparison and evaluation between actual and budgeted data as
comparable data are compared.
3. Coordination: flexible budgeting results in coordination between all
activities/departments of a business. Production is planned in relation to
expected sales; materials and labour are acquired to meet expected
production requirements. Facilities are provided to achieve budgetary
goals, and funds are made available for the investments necessary to have
higher outputs.
4. Control tool: Flexible budgeting is an effective management control tool.
Comparison between the budgeted costs (at the actual production level)
and actual costs form the basis for analyzing cost variances and fixing
responsibility for the same. In fact managers themselves feel motivated
in controlling costs for which they are responsible they are responsible.
This contributes to cost control throughout the organization.
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3.6.6 Production Budget:
A production budget is stated in physical units. It specifies the number of
units of each product that must be produced to satisfy the sales forecast and to
achieve the desired level of closing finished goods inventory. Essentially, the
production budget is the sales budget adjusted for inventory changes as follows:
Unit to produce =Budgeted sales+Desired closing inventory of finished goods(-)
Beginning inventory of finished goods.
3.7Lineat trend:
The method of least square may be used either to fit a straight line trend or a
nonlinear trend. The straight line may represented by the equation.
S = a+b.T when and are constant representing the intercept and slope respectively
of the estimated straight line. In order to determine the values of a and b the
following two normal equation need to be solved:
S=Na + bT
ST=aT+bT2
These method is based upon the analysis of Past data. The basic assumption of
these methods is that future events area continuation of the past. Fitting of trend to
the given data and use this to make forecasts. The result of these method are fairly
accurate so long as the trend has a persistent tendency to more in the same
direction. The analysis is more reliable for the short term forecast.
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4. ANALYSIS AND INTERPRETATIONS
Table No.4.1 Shows the various cost involved in the actual production process
of Mixing during the year 2009.
Following working notes is clearly stated the above table to represents various cost
involved each process and calculations, after its convert in to 90% and 100%
Working notes:
o Average of raw material in this process (per day) = 5670kgs.
o Total working days = 287 days,
i.e 365days 9 Govt. holidays 12 days maintenance=344days.
Here, 4 hours shut down for each working days, (4 x
344days=1376hours)
1376/24 hours=57days.
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S.No Particulars 80%
A
1.
2.
B.
3.
4.5.
C
6.
7.
8.
9.
Variable Cost:
Material Cost
Labour Cost
Semi-Variable
Power
Fuel & oilRepair & Maintenance
Fixed Cost:
Cotton testing fee & supervisions.
Depreciation:
Direct
Indirect
Insurance
Administrative &
Selling overhead.
126928620
602364
-
--
32277
5923713.5
3340730.1
35215.3
1037806.5
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Therefore, 344days-57 days =287 days.
Working Notes contd.
o Percentage production capacity = 287/365days x 100
=78.630%
Assume as a roundly 80% is current production capacity.
o Per Kilogram of Raw Material: Rs.78/-
o Labour Cost:
Total labours production process = 129
Labour cost involved in Mixing process =602364
i.e. Total Labour cost/14 labours in mixing process.
6. Insurance for the mixing process = 35215.3
7. Depreciation:Total depreciation = 74115549
Directly depreciation involved in production process= 47389
Other depreciations = 26725841
(it should divided into each process)
Therefore, Mixing process = 5923713.5 &3340730.1
8. Total Administrative & Selling overheads 7000829
(+)other Administrative expenses 265743
(-) other heads (windmills) 9340259
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Therefore each process = 1037806.5
On the basis of calculations are converted into 90% and 100%. It
helps to compare the current level production to maximum level
productions.
Table No.4.1(a) Shows the various cost involved in the process of mixing
during the year 2009.
S.No Particulars 80% 90% 100%
A
1.
2.
B
3.
4.
5.
C
6.
7.
8.
9.
Variable Cost:
Material Cost
Labour Cost
Semi-Variable
Power
Fuel & oil
Repair &
Maintenance
Fixed Cost:
Cotton testing fee &
supervisions.
Depreciation:
Direct
Indirect
Insurance
Administrative &
Selling overhead.
126928620
602364
-
-
-
32277
5923713.5
3340730.1
35215.3
1037806.5
142794698
677659
-
-
-
36311.6
6664177.6
3758321.3
39617.2
1167532.2
158660775
752955
-
-
-
40346.25
7404641.7
4175912.6
44019.1
1297258
Total 137900726.4 1555138316.9 172375907.7
Inference:
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Table No.4.1(a) shows that various cost involved in the process of Mixing,
Here the capacity of 80% consists the cost of 137900726.4, 90% consists the cost
of 1555138316.9 and total cost of maximum level is 172375907.7
Table No.4.2 Shows the various cost involved in the actual production process
of Blow room during the year 2009.
Following working notes is clearly stated the above table to represents various cost
involved each process and calculations, after its convert in to 90% and 100%
Working notes:
1.Average of raw material in this process (per day) = 5414kgs.
46
S.No Particulars 80%
A
1.
2.
B.
3.
4.
5.
C
6.
7.
8.
9.
Variable Cost:
Material Cost
Labour Cost
Semi-Variable
Power
Fuel & oil
Repair & Maintenance
Fixed Cost:
Cotton testing fee & supervisions.Depreciation:
Direct
Indirect
Insurance
Administrative &
Selling overhead.
125859258
129078
1707650
219991
122033
32277
5923713.5
3340730.1
35215
1037806.5
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2.Labour Cost:
Total labours production process = 129
Labour cost involved in this process = 129078.
i.e. Total Labour cost/3 labours in Blowroom process.
Working Notes contd.
3.Power: 1700units x Rs.3.50 =5950
5950 x 287days = 1707650
4.Per Kilogram of Raw Material: Rs.81/-
5.Fuel and oil: 10% on total amount of Fuel and oil Rs.21999126.Repair maintenance: 5.3% on Rs.2302504
7. Insurance for the each process = 35215.3
8. Depreciation:
Total depreciation = 74115549
Directly depreciation involved in production process= 47389
Other depreciations = 26725841
(it should divided into each process)
Therefore, each process = 5923713.5 &3340730.1
9.Cotton testing fees 7 supervisions: (49216+209000=258216)
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Divided by 8 process(except packaging), = 32277.
10. Total Administrative & Selling overheads 7000829
(+)other Administrative expenses 265743
(-) other heads (windmills) 9340259
Therefore each process = 1037806.5
On the basis of calculations are converted into 90% and 100%. It
helps to compare the current level production to maximum level
productions.
Table No.4. 2(a) Shows the various cost involved in the process of Blowroom
during the year 2009.
S.No Particulars 80% 90% 100%
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A
1.
2.
B
3.
4.
5.
C
6.
7.
8.
9.
Variable Cost:
Material Cost
Labour Cost
Semi-Variable
Power
Fuel & oil
Repair & Maintenance
Fixed Cost:
Cotton testing fee &
supervisions.
Depreciation:
DirectIndirect
Insurance
Administrative &
Selling overhead.
125859258
129078
1707650
219991
122033
32277
5923713.5
3340730.1
35215
1037806.5
141591656
145212.7
1921106.2
247489.8
137287.1
36311.6
6664177.6
3758321.3
39617.2
1167532.2
157324073
161647.5
2134562.5
274988.7
152541.2
40346.25
7404641.7
4175912.6
44019.1
1297258
Total 138407752.1 155708711.7 173009990.6
Inference:
Table No.4.2(a) shows that various cost involved in the process of
Blowroom, Here the capacity of 80% consists the cost of 138407752.1, 90%
consists the cost of 155708711.7 and total cost of maximum level is 173009990.6
Table No.4.3 Shows the various cost involved in the actual production process
of carding during the year 2009.
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Following working notes is clearly stated the above table to represents various cost
involved each process and calculations, after its convert in to 90% and 100%
Working notes:
1.Average of raw material in this process (per day) = 5116kgs.
2.Labour Cost:
Total labours production process = 129
Labour cost involved in Carding process =86052
i.e. Total Labour cost/2 labours in Blowroom process.
50
S.No Particulars 80%
A
1.2.
B.
3.
4.
5.
C
6.
7.
8.
9.
Variable Cost:
Material CostLabour Cost
Semi-Variable
Power
Fuel & oil
Repair & Maintenance
Fixed Cost:
Cotton testing fee & supervisions.
Depreciation:
Direct
IndirectInsurance
Administrative &
Selling overhead.
12480482086052
1506750
204592
545693
32277
5923713.5
3340730.135215
1037806.5
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Working Notes contd.
3.Power: 1500units x Rs.3.50 =5250
5250 x 287days = 1506750
4.Per Kilogram of Raw Material: Rs.85/-
5.Fuel and oil: 9.3% on total amount of Fuel and oil Rs.2199912
6.Repair maintenance: 23.7% on Rs.2302504
7. Insurance for each process = 35215.3
8. Depreciation:
Total depreciation = 74115549
Directly depreciation involved in production process= 47389
Other depreciations = 26725841
(it should divided into each process)Therefore, each process = 5923713.5 &3340730.1
9.Cotton testing fees 7 supervisions: (49216+209000=258216)
Divided by 8 process(except packaging), = 32277.
10. Total Administrative & Selling overheads 7000829
(+)other Administrative expenses 265743
(-) other heads (windmills) 9340259
Therefore each process = 1037806.5
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On the basis of calculations are converted into 90% and 100%. It
helps to compare the current level production to maximum level
productions.
Table No.4. 3(a) Shows the various cost involved in the process of Carding
during the year 2009.
S.No Particulars 80% 90% 100%
A
1.
2.
B
3.
4.
5.
C
6.
7.
8.
9.
Variable Cost:
Material Cost
Labour Cost
Semi-Variable
Power
Fuel & oil
Repair & Maintenance
Fixed Cost:
Cotton testing fee &
supervisions.
Depreciation:
Direct
Indirect
Insurance
Administrative &
Selling overhead.
124804820
86052
1506750
204592
545693
32277
5923713.5
3340730.1
35215
1037806.5
140405423
96808
1695093
230166
613905
36311.6
6664177.6
3758321.3
39617.2
1167532.2
156006025
107565
1883437
255740
682116
40346.25
7404641.7
4175912.6
44019.1
1297258
Total 137517649.1 154707354.9 171897060.7
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Inference:
Table No.4.3(a) shows that various cost involved in the process of Carding,
Here the capacity of 80% consists the cost of 137517649.1, 90% consists the cost
of 154707354.9 and total cost of maximum level is 171897060.7
Table No.4.4 Shows the various cost involved in the actual production process
of Drawing during the year 2009.
Following working notes is clearly stated the above table to represents various cost
involved each process and calculations, after its convert in to 90% and 100%
Working notes:
1.Average of raw material in this process (per day) = 5113kgs.
53
S.No Particulars 80%
A
1.
2.
B.
3.
4.
5.
C6.
7.
8.
9.
Variable Cost:
Material Cost
Labour Cost
Semi-Variable
Power
Fuel & oil
Repair & Maintenance
Fixed Cost:Cotton testing fee & supervisions.
Depreciation:
Direct
Indirect
Insurance
Administrative &
Selling overhead.
126199066
129078
301350
46198
437475
32277
5923713.5
3340730.1
35215
1037806.5
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2.Labour Cost:
Total labours production process = 129
Labour cost involved in drawing process =129078.
i.e. Total Labour cost/3 labours.
Working Notes contd.
3.Power: 300units x Rs.3.50 =1050
1050 x 287days = 301350
4.Per Kilogram of Raw Material: Rs.86/-
5.Fuel and oil: 2.8% on total amount of Fuel and oil Rs.21999126.Repair maintenance: 19% on Rs.2302504
7. Insurance for the drawing process = 35215.3
8. Depreciation:
Total depreciation = 74115549
Directly depreciation involved in production process= 47389
Other depreciations = 26725841
(it should divided into each process)
Therefore, Each process = 5923713.5 &3340730.1
9.Cotton testing fees 7 supervisions: (49216+209000=258216)
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Divided by 8 process(except packaging), = 32277.
10. Total Administrative & Selling overheads 7000829
(+)other Administrative expenses 265743
(-) other heads (windmills) 9340259
Therefore each process = 1037806.5
On the basis of calculations are converted into 90% and 100%. It
helps to compare the current level production to maximum level
productions.
Table No.4. 4 (a) Shows the various cost involved in the process of Drawing
during the year 2009.
S.No Particulars 80% 90% 100%
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A
1.
2.
B
3.
4.
5.
C
6.
7.
8.
9.
Variable Cost:
Material Cost
Labour Cost
Semi-Variable
Power
Fuel & oil
Repair & Maintenance
Fixed Cost:
Cotton testing fee &
supervisions.
Depreciation:
DirectIndirect
Insurance
Administrative &
Selling overhead.
126199066
129078
301350
46198
437475
32277
5923713.5
3340730.1
35215
1037806.5
141973950
145213
339019
51973
492159
36311.6
6664177.6
3758321.3
39617.2
1167532.2
157748833
161348
376688
57748
546844
40346.25
7404641.7
4175912.6
44019.1
1297258
Total 137482909.1 154668273.9 154668273.9
Inference:
Table No.4.4(a) shows that various cost involved in the process of drawing,
Here the capacity of 80% consists the cost137482909.1, 90% consists the cost of
154668273.9 and total cost of maximum level is 154668273.9
Table No.4.5 Shows the various cost involved in the actual production process
of Simplex during the year 2009.
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Following working notes is clearly stated the above table to represents various cost
involved each process and calculations, after its convert in to 90% and 100%
Working notes:
1.Average of raw material in this process (per day) = 5110kgs.
2.Labour Cost:
Total labours production process = 129
Labour cost involved in these process =430260
i.e. Total Labour cost/10 labours in process.
57
S.No Particulars 80%
A
1.2.
B.
3.
4.
5.
C
6.
7.
8.
9.
Variable Cost:
Material CostLabour Cost
Semi-Variable
Power
Fuel & oil
Repair & Maintenance
Fixed Cost:
Cotton testing fee & supervisions.
Depreciation:
Direct
IndirectInsurance
Administrative &
Selling overhead.
127591590430260
904050
120995
391425
32277
5923713.5
3340730.135215
1037806.5
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Working Notes contd.
3.Power: 900units x Rs.3.50 =3150
3150 x 287days = 904050
4.Per Kilogram of Raw Material: Rs.87/-
5.Fuel and oil: 5.5% on total amount of Fuel and oil Rs.2199912
6.Repair maintenance: 17% on Rs.2302504
7. Insurance for the each process = 35215.3
8. Depreciation:
Total depreciation = 74115549
Directly depreciation involved in production process= 47389
Other depreciations = 26725841
(it should divided into each process)Therefore, Each process = 5923713.5 &3340730.1
9.Cotton testing fees 7 supervisions: (49216+209000=258216)
Divided by 8 process(except packaging), = 32277.
10. Total Administrative & Selling overheads 7000829
(+)other Administrative expenses 265743
(-) other heads (windmills) 9340259
Therefore each process = 1037806.5
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On the basis of calculations are converted into 90% and 100%. It
helps to compare the current level production to maximum level
productions.
Table No.4. 5(a) Shows the various cost involved in the process of Simplex
during the year 2009.
S.No Particulars 80% 90% 100%
A
1.
2.
B
3.
4.
5.
C6.
7.
8.
9.
Variable Cost:
Material Cost
Labour Cost
Semi-Variable
Power
Fuel & oil
Repair & Maintenance
Fixed Cost:Cotton testing fee &
supervisions.
Depreciation:
Direct
Indirect
Insurance
Administrative &
Selling overhead.
127591590
430260
904050
120995
391425
32277
5923713.5
3340730.1
35215
1037806.5
143540539
484043
1017056
136119
440353
36311.6
6664177.6
3758321.3
39617.2
1167532.2
159489488
537825
1130063
151244
489281
40346.25
7404641.7
4175912.6
44019.1
1297258
Total 139808062.1 157284069.9 174760078.7
Inference:
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Table No.4.5(a) shows that various cost involved in the process of Simplex,
Here the capacity of 80% consists the cost of139808062.1, 90% consists the cost of
157284069.9 and total cost of maximum level is 174760078.7
Table No.4.6Shows the various cost involved in the actual production process
of Spinning during the year 2009.
Following working notes is clearly stated the above table to represents various cost
involved each process and calculations, after its convert in to 90% and 100%
Working notes:
60
S.No Particulars 80%
A
1.
2.
B.
3.
4.
5.C
6.
7.
8.
9.
Variable Cost:
Material Cost
Labour Cost
Semi-Variable
Power
Fuel & oil
Repair & MaintenanceFixed Cost:
Cotton testing fee & supervisions.
Depreciation:
Direct
Indirect
Insurance
Administrative &
Selling overhead.
127998413
2409456
703150
1473941
630887
32277
5923713.5
3340730.1
35215
1037806.5
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1.Average of raw material in this process (per day) = 5097kgs.
2.Labour Cost:
Total labours production process = 129
Labour cost involved in spinning process =2409456
i.e. Total Labour cost/56 labours in this process.
Working Notes contd.
3.Power: 700units x Rs.3.50 =2450
2450 x 287days = 703150
4.Per Kilogram of Raw Material: Rs.87.5/-5.Fuel and oil: 67% on total amount of Fuel and oil Rs.2199912
6.Repair maintenance: 27.4% on Rs.2302504
7. Insurance for the each process = 35215.3
8. Depreciation:
Total depreciation = 74115549
Directly depreciation involved in production process= 47389
Other depreciations = 26725841
(it should divided into each process)
Therefore, Each process = 5923713.5 &3340730.1
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9.Cotton testing fees 7 supervisions: (49216+209000=258216)
Divided by 8 process(except packaging), = 32277.
10. Total Administrative & Selling overheads 7000829
(+)other Administrative expenses 265743
(-) other heads (windmills) 9340259
Therefore each process = 1037806.5
On the basis of calculations are converted into 90% and 100%. It
helps to compare the current level production to maximum levelproductions.
Table No.4. 6(a) Shows the various cost involved in the process of Spinning
during the year 2009.
S.No Particulars 80% 90% 100%
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A
1.
2.
B
3.
4.
5.
C
6.
7.
8.
9.
Variable Cost:
Material Cost
Labour Cost
Semi-Variable
Power
Fuel & oil
Repair &
Maintenance
Fixed Cost:
Cotton testing fee &
supervisions.
Depreciation:Direct
Indirect
Insurance
Administrative &
Selling overhead.
127998413
2409456
703150
1473941
630887
32277
5923713.5
3340730.1
35215
1037806.5
143998214
2710638
791044
1658184
709748
36311.6
6664177.6
3758321.3
39617.2
1167532.2
159998016
301180
878938
1842426
788609
40346.25
7404641.7
4175912.6
44019.1
1297258
Total 143585589.1 161533787.9 176771346.7
Inference:
Table No.4.6(a) shows that various cost involved in the process of Spinning,
Here the capacity of 80% consists the cost of 143585589.1,
90% consists the cost of 161533787.9 and total cost of maximum level is
176771346.7
Table No.4.7.1 Shows the various cost involved in the actual production
process of winding during the year 2009.
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Following working notes is clearly stated the above table to represents various cost
involved each process and calculations, after its convert in to 90% and 100%
Working notes:
1.Average of raw material in this process (per day) = 1596kgs.
2.Labour Cost:
Total labours production process = 129
Labour cost involved in Winding process = 903546
i.e. Total Labour cost/21 labours in this process.
64
S.No Particulars 80%
A
1.2.
B.
3.
4.
5.
C
6.
7.
8.9.
Variable Cost:
Material CostLabour Cost
Semi-Variable
Power
Fuel & oil
Repair & Maintenance
Fixed Cost:
Cotton testing fee & supervisions.
Depreciation:
Direct
IndirectInsurance
Administrative &
Selling overhead.
39850524903546
326462
39598
112823
32277
5923713.5
3340730.1
35215
1037806.5
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Working Notes contd.
3.Power: 325units x Rs.3.50 =1137.5
1137.5 x 287days = 326462
4.Per Kilogram of Raw Material: Rs.87/-
5.Fuel and oil: 1.8% on total amount of Fuel and oil Rs.2199912
6.Repair maintenance: 4.9% on Rs.2302504
7. Insurance for the each process = 35215.3
8. Depreciation:
Total depreciation = 74115549
Directly depreciation involved in production process= 47389
Other depreciations = 26725841
(it should divided into each process)Therefore, Each process = 5923713.5 &3340730.1
9.Cotton testing fees 7 supervisions: (49216+209000=258216)
Divided by 8 process(except packaging), = 32277.
10. Total Administrative & Selling overheads 7000829
(+)other Administrative expenses 265743
(-) other heads (windmills) 9340259
Therefore each process = 1037806.5
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On the basis of calculations are converted into 90% and 100%. It
helps to compare the current level production to maximum level
productions.
Table No.4.7.1(a) Shows the various cost involved in the proce ss of winding
during the year 2009.
S.No Particulars 80% 90% 100%
A1.
2.
B
3.
4.
5.
C
6.
7.
8.
9.
Variable Cost:Material Cost
Labour Cost
Semi-Variable
Power
Fuel & oil
Repair & Maintenance
Fixed Cost:
Cotton testing fee &
supervisions.
Depreciation:
Direct
Indirect
Insurance
Administrative &
Selling overhead.
39850524
903546
326462
39598
112823
32277
5923713.5
3340730.1
35215
1037806.5
44831839
1016489
367270
44548
126926
36311.6
6664177.6
3758321.3
39617.2
1167532.2
49813155
1129433
408078
49498
141029
40346.25
7404641.7
4175912.6
44019.1
1297258
Total 51602695.1 58053031.9 64503370.65
Inference:
Table No.4.7.1 shows that various cost involved in the process of Winding,
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Here the capacity of 80% consists the cost of 51602695.1, 90% consists the cost of
58053031.9 and total cost of maximum level is 64503370.65
Table No.4.7.2. Shows the various cost involved in the actual production
process in Autoconer during the year 2009.
Following working notes is clearly stated the above table to represents various cost
involved each process and calculations, after its convert in to 90% and 100%
Working notes:
1.Average of raw material in this process (per day) = 3238kgs.
67
S.No Particulars 80%
A
1.
2.
B.
3.
4.
5.
6.
C
7.
8.
9.
10.
Variable Cost:
Material Cost
Labour Cost
Semi-Variable
Power
Generator (35%)
(65%)
Fuel & oil
Repair & Maintenance
Fixed Cost:
Cotton testing fee & supervisions.Depreciation:
Direct
Indirect
Insurance
Administrative &
Selling overhead.
81973227
774468
627812
1293394
2402017
94596
62168
32277
5923713.5
3340730.1
35215
1037806.5
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2.Labour Cost:
Total labours production process = 129
Labour cost involved in Autoconer process =774468
i.e. Total Labour cost/18 labours in this process.
Working Notes contd.
3.Power: 675units x Rs.3.50 =2187.5
2187.5 x 287days = 627812 (including Generator power:36954112)
4.Per Kilogram of Raw Material: Rs.87/-
5.Fuel and oil: 4.3% on total amount of Fuel and oil Rs.21999126.Repair maintenance: 2.7% on Rs.2302504
7. Insurance for the each process = 35215.3
8. Depreciation:
Total depreciation = 74115549
Directly depreciation involved in production process= 47389
Other depreciations = 26725841
(it should divided into each process)
Therefore, Each process = 5923713.5 &3340730.1
9.Cotton testing fees 7 supervisions: (49216+209000=258216)
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Divided by 8 process(except packaging), = 32277.
10. Total Administrative & Selling overheads 7000829
(+)other Administrative expenses 265743
(-) other heads (windmills) 9340259
Therefore each process = 1037806.5
On the basis of calculations are converted into 90% and 100%. It
helps to compare the current level production to maximum level
productions.
Table No.4. 7.2 (a) Shows the various cost involved in the process of
Autoconer during the year 2009.
S.No Particulars 80% 90% 100%
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A
1.
2.
B
3.
4.
5.
6.
C
7.
8.
9.
10.
Variable Cost:
Material Cost
Labour Cost
Semi-Variable
Power &
Generator: (35%)
(65%)
Fuel & oil
Repair & Maintenance
Fixed Cost:
Cotton testing fee &
supervisions.Depreciation:
Direct
Indirect
Insurance
Administrative &
Selling overhead.
81973227
774468
627812
1293394
2402017
94596
62168
32277
5923713.5
3340730.1
35215
1037806.5
92219880
871277
706289
1455068
2702269
106421
69939
36311.6
6664177.6
3758321.3
39617.2
1167532.2
102466534
968085
784765
1616743
3002521
118245
77710
40346.25
7404641.7
4175912.6
44019.1
1297258
Total 97597424.1 109797102.9 121996780.7
Inference:
Table No.4.7.2(a) shows that various cost involved in the process of
Autoconer, Here the capacity of 80% consists the cost of 97597424.1, 90%
consists the cost of 109797102.9and total cost of maximum level is 121996780.7
Table No.4. 8 Shows the various cost involved in the process of packaging
during the year 2009.
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S.No Particulars 80% 90% 100%
A
1.2.
B
3.
4.
5.
C
6.
7.
Variable Cost:
Material CostLabour Cost
Semi-Variable
Power
Fuel & oil
Repair & Maintenance
Fixed Cost:
Insurance
Administrative &
Selling overhead.
12182375186052
-
-
-
35215
1037806.5
142794698677659
-
-
-
39617.2
1167532.2
158660775752955
-
-
-
44019.1
1297258
Total 122982824.5 144679506.4 160755007.1
Inference:
Table No.4.8 shows that various cost involved in the process of Packaging,
Here the capacity of 80% consists the cost of 122982824.5, 90% consists the cost
of 144679506.4 and total cost of maximum level is 160755007.1
TABLE No.4.9. PRODUCTION BUDGET FOR SIX MONTH ENDING,
31ST December 2009
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Particulars July09 Aug.09 Sep.09 Oct.09 Nov.09 Dec.09
Sales
Add: ClosingStock
Less:
Opening-
Stock
Add: Loss in
production
TOTAL
(No. of Unit
Produced)
156828
38484.9
126012
47355.4
145588
36456.1
146912
26813.6
126032
39304.3
156554
27073.9
195312
47298.4
173367.4
38484.9
182044.1
47355.4
173725.6
36456.1
165336.3
26813.6
183627.9
39304.3
148014.5
1677.2
134882.5
1528.4
134688.7
1526.2
137269.5
1555.4
138522.7
1569.6
144323.6
1635.3
149691.7 136410.9 136214.9 138824.9 140092.3 145958.9
Inference:
S.No Details of 2009 80% 90% 100%
1. Total Production 16,94,387 19,06,185.38 21,17,984
2. Monthly wise 1,41,199 1,58,849 1,76,497
3. Day to day 5,904 6,642 7,380
Working notes for the previous table 4.9. And Inference:
6Months Production (80%Capacity) = 847193.6,
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o Therefore 1 year = 1694387, If 90%basis = 1906185.38,
Maximum level = 2117983.75
o Divided by 12 months = 141199, If90%basis = 158849, If 100% =
176497.
o Total working Days = 287 days (by Calculations)
Therefore, 80% = 1694387 287 = 5904
90% = 1906185.38 287 = 6642
100% = 2117983.75 287 = 7380
Inference:
S.No Details of 2009 80% 90% 100%
1. Total Production
(kgs)
16,94,387 19,06,185.38 21,17,984
2. Monthly wise 1,41,199 1,58,849 1,76,4973. Day to day 5,904 6,642 7,380
Above table shows the actual production of 2009 is 1694387kgs, and also its
predicts level of capacities as 90% and 100% is 1906185.38 and 2117984
respectively.
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TABLE No.4.9 (a). PRODUCTION BUDGET FOR January t o May 2010,
(by using forecasted Value)
Inference:
From the above Table shows that the forecasted value of Sales, Closing stock,
opening stock, loss in production, Total production value of 2010January to May.
The forecasted value of January2010 is approximately equal to the Production
Ledgers of the company.
74
Particulars Jan Feb Mar Apr. May
Sales
Add: Closing
Stock
Less:
Opening-
Stock
Add: Loss in
production
TOTAL(Kgs)
(No. of Unit
Produced)
159392
26897
185958
31380
212523
35863
239089
40346
265654
44829
186289
25444.7
217338
29684.9
248386
33925
279435
38166
310483
42407
160844.3