COST ACCOUNTING PROJECT

PROCESS COSTING

NAME: RUPEN CHALWA

MCOM- PART-1

INTRODUCTION
Process costing is an accounting methodology that traces and
accumulates direct costs, and allocates indirect costs of a manufacturing
process. Costs are assigned to products, usually in a large batch, which
might include an entire month's production. Eventually, costs have to be
allocated to individual units of product. It assigns average costs to each
unit, and is the opposite extreme of Job costing which attempts to measure
individual costs of production of each unit.
it is a method of assigning costs to units of production in companies
producing large quantities of homogeneous products.
Process costing is a type of operation costing which is used to ascertain
the cost of a product at each process or stage of manufacture. CIMA defines
process costing as "The costing method applicable where goods or services
result from a sequence of continuous or repetitive operations or processes.

The importance of process costing[edit]

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

tudy of vehicle manufacturing processes from raw materialto finish vehicles.

Study of Vehicle Tracking System (VTS) & equipment interface.

Auto closing system (Concept, design &fabrication)of floor service pit to

improve safety of human.
SUBMITTED BY-------------------4
TH
YEAR ELECTRICAL ENGINEERINGYMCA INSTITUTE OF ENGINEERINGFARIDABAD
tudy of vehicle manufacturing processes from raw materialto finish vehicles.

Study of Vehicle Tracking System (VTS) & equipment interface.


Auto closing system (Concept, design &fabrication)of floor service pit to
improve safety of human.
SUBMITTED BY-------------------4
TH
YEAR ELECTRICAL ENGINEERINGYMCA INSTITUTE OF ENGINEERINGFARIDABAD
COMPANY PROFILE
MARUTI SUZUKI INDIA LIMITED
Maruti Suzuki is one of India's leading automobile manufacturers and the
market leader in the car segment, both in terms of volume of vehicles sold
and revenue earned. Untilrecently, 18.28% of the company was owned by
theIndian government, and 54.2% bySuzukiof Japan. The Indian
government held aninitial public offering o f 2 5 % o f t h e company in
June 2003. As of May 10 , 2007, Govt. of India sold its complete
share toI n d i a n f i n a n c i a l i n s t i t u t i o n s . W i t h t h i s , G o v t . o f
India no longer has stake in
M a r u t i Udyog.M a r u t i U d y o g L i m i t e d ( M U L ) w a s e s t a b l i s h e d i n F
e b r u a r y 1 9 8 1 , t h o u g h t h e a c t u a l production commenced in 1983
with the Maruti 800, based on theSuzuki Alto kei car which at the
time was the only modern car available in India, its' only
competitors- theHindustan Ambassador andPremierPadminiwere both
around 25 years out of date atthat point. Through 2004, Maruti has
produced over 5 Million vehicles.
Maruti
are sold inIndia and various several other countries, depending upon export
orders. Cars similar toMaruti (but not manufactured by MarutiUdyog) are
sold by Suzuki and manufactured inPakistanand other South
Asian countries.T h e c o m p a n y a n n u a l l y e x p o r t s m o r e t h a n 5 0 , 0 0 0
c a r s a n d h a s a n e x t r e m e l y l a r g e domestic market in India selling
over 730,000 cars annually.Maruti 800, till 2004, wasthe India's largest
selling compact car ever since it was launched in 1983. More than amillion
units of this car have been sold worldwide so far.
Currently,MarutiAltotopsthesales charts and Maruti Swift is the largest
selling in A2 segment.Due to the large number of Maruti 800s sold in
the Indian market, the term "Maruti" iscommonly used to refer to
this compact car model. Till recently the term "Maruti", in popular
Indian culture, was associated to the Maruti 800 model.
MARUTI SUZUKI INDIA LIMITED
Maruti Suzuki India Limited, a subsidiary of Suzuki Motor
Corporation of Japan, hasbeen the leader of the Indian car market for
over two decades.Its manufacturing facilities are located at two facilities
Gurgaon and Manesar south of N e w D e l h i . M a r u t i s G u r g a o n f a c i l i t y
h a s a n i n s t a l l e d c a p a c i t y o f 3 5 0 , 0 0 0 u n i t s p e r annum. The

Manesar facilities, launched in February 2007 comprise a vehicle

assemblyplant with a capacity of 100,000 units per year and a Diesel Engine
plant with an annualcapacity of 100,000 engines and transmissions. Manesar
and Gurgaon facilities have acombined capability to produce over 700,000
units annually.More than half the cars sold in India are Maruti cars.
The company is a subsidiary of Suzuki Motor Corporation, Japan, which
owns 54.2 per cent of Maruti. The rest is ownedby the public and
financial institutions. It is listed on the Bombay Stock Exchange
andNational Stock Exchange in India.During 2007-08,Maruti Suzuki sold
764,842 cars, of which 53,024 were exported. In all,o v e r s i x m i l l i o n
Maruti cars are on Indian roads since the first car was
r o l l e d o u t o n December 14,1983.Maruti Suzuki offers 12 models,
Maruti 800, Omni, Alto, Versa, Gypsy, A Star, WagonR, Zen Estilo,
Swift, Swift Dzire, SX4, Grand Vitara. Swift, Swift dzire, A star and
SX4are maufactured in Manesar, Grand Vitara is imported from Japan as a
completely builtunit (CBU), remaining all models are manufactured in
Maruti Suzuki's Gurgaon Plant.Suzuki Motor Corporation, the parent
company, is a global leader in mini and compactcars for three decades.
Suzukis technical superiority lies in its ability to pack power
andperformance into a compact, lightweight engine that is clean and fuel
efficient.
Maruti is clearly an employer of choice for automotive engineers and
young managersfrom across the country. Nearly 75,000 people
are employed directly by Maruti and itspartners.The company vouches
for customer satisfaction. For its sincere efforts it has been rated(by
customers)first in customer satisfaction among all car makers in India for
nine yearsin a row in annual survey by J D Power Asia Pacific.Maruti Suzuki
was born as a government company, with Suzuki as a minor partner
tom a k e a p e o p l e ' s c a r f o r m i d d l e c l a s s I n d i a . O v e r t h e
y e a r s , t h e p r o d u c t r a n g e h a s widened, ownership has changed hands
and the customer has evolved. What remainsunchanged, then and now, is
Marutis mission to motorize India
BACKGROUND OF THE INDIAN AUTO INDUSTRY
Although the Indian car industry was established in the late
forties, there was littlegrowth or technical progress, as
passenger cars were given very low priority in
thes c h e m e o f C e n t r a l i z e d E c o n o m i c P l a n n i n g . I n t h e 1 9
8 0 s , t h e c a r i n d u s t r y w a s undergoing technological stagnation and
was characterized by low production volumes,high cost and low
productivity. The consumer had very little choice and the market wasselling
just around 30,000 cars per year.T h e r e w a s a c l e a r n e e d t o p r o v i d e
a c o s t e f f e c t i v e , r e l i a b l e a n d q u a l i t y c a r t o t h e customers.
Maruti Suzuki India Limited was incorporated in such a scenario as
a fullyo w n e d G o v e r n m e n t C o m p a n y o n F e b r u a r y 2 4 , 1 9 8 1 w i t h
a r e s o l v e t o b r i n g a b o u t expansion and technological modernization,
of the automobile sector. Thus MSIL, whenstarted was entrusted with the
task of achieving the following policy objectives:

Modernization of Indian Automobile Industry.

Produ ct ion o f Veh ic les in lar g e v olu m es , wh ich was

necessary for economic
growth.

Production of Fuel-efficient vehicles to conserve scarce

resourcesModernization of Indian Automobile Industry.

Produ ct ion o f Veh ic les in lar g e v olu m es , wh ich was

necessary for economic
growth.

Production of Fuel-efficient vehicles to conserve scarce resources.

Choice of product and collaborator

To achieve the above objectives, one of the foremost tasks before.Maruti

Suzuki
India Limited was to determine the most suitable product mix
and to select the
m o s t s u i t a b l e f o r e i g n p a r t n e r w h o w o u l d
b e w i l l i n g t o a c c e p t M S I L s
requirements in terms of product mix, technology
t r an s f e r, a n d e q u a l i t y
participation and had the

required technological expertise and experience in producing high quality,

reliable
and fuel efficient vehicles.
After extensive discussion with several major
European and Japanese car
manufacturers, MUL chose Suzuki Motor Corporation (SMC) further increased
its equity
holding to 50% in the year 1992, converting . Maruti Suzuki India
Limited, into a NonGovernment Company with a total Equity base of Rs. 1322.92 million.
ACKGROUND OF SMC
SUZUKI was founded in 1909 as Suzuki Loom
M a n u f a c t u r i n g C o m p a n y. I t s t a r t e d
manufacturing motorcycles in 1952 and has become a world leader in the
manufacture
of two-wheelers .SUZUKI started producing cars from 1955.Today it is
Japans largest
manufacturers of small , fuel-efficient cars. At present the companys name
is SUZUKI
MOTOR CORPORATION.

MARUTI
SUZUKI
INDIA
LIMITED

SUZUKI

AND
MARUTI
S
WORLDCLASS
MANUFA

CTURING
FACILITI
ES AT
MANESA
R
On

February
06,2007
Mr.
Bhupende
ra Singh
Hooda

,Chief
Minister
of
Haryana
inaugurate
d three

worldclass
manufactu
ring
facilities
set up by

SMC and
Maruti
Suzuki
India
Limited.

The

facilities
inaugura
ted
were as
follows:

MSILs
fourth car
Assembly
plant.

A diesel
engine

and
transmissi
on plant,
set up
under a
joint

venture
of SMC
and
MSILcalled
Suzuki
Power

train India
Limited
(SPIL)

SMCs
twowheeler

plant in
Gurgaon,
Suzuki
Motorcycl
e India
Private

Limited
(SMIPL).

INTROD
UCTION
TO

MARUTI
SUZUKI
INDIA
LIMITED

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MARUTI

SUZUKI
INDIA
LIMITED

The
system

then
stores the
data to
the host
computer
for storing

analyzing
and for
futureuse
The data
related to
testing is

handled
by the
test
managem
ent
system or

TMS which
in turn
interacts
with the
PMS.

At these

stations
the
magnetic
RFID Tag
communic
ates with

the
tracking
system
known as
PMS
system via

the Tag
Controller
to
exchange
and verify
the data.

Additional
ly, the
RFID tags
also
exchange
data with

other
equipment
and
machines
on the
assembly

line in the
same way,
using the
Tag
Controller.
The Tag

contains
the data
related to
the engine
kept on
the

palate.

The RFID
Tag will
start
receiving
data from

set up
station
for
example,
type of
engine,

engine
number,
master
data, etc.
As the
pallet

goes along
the line
and
different
operations
are

performed
on the
engine by
various
machines,
the RFID

Tag
continues
collecting
data from
machines
recording

the
operation
done, its
status,
etc.
When the

pallet
reaches
the
release
station,
the entire

data in
the RFID
Tag is
transferre
d to the
PMS and

after
updating,
it is
flushed
from the
Tag. Now

the tag is
ready for
the next
engine
loading.

MARUTI
SUZUKI
INDIA
LIMITED

VTS

IN
VEHI
CLE

INSPE
CTIO
N(VI)
In the

Vehicle
Inspection
Shop
, tracking
is done at
two

points:

FC-ON
and

FC-OK
.

After FCOK, an FCOK

confirmati
on Sticker
is

attached
to rear
window of
the
vehicle,
and then

the
vehicles
are
transferre
d to the
dispatch

area.

In the
vehicle
inspection
shop, the
VTS is

integrated
with the
TECH-1
system
which
carries out

the
emission
check and
the air
bag
check.

Without
the TECH1 check
FC-OK of
the
vehicle

cannot be
done.

This
ensures
that the
vehicle

has been
passed
through
all the
necessary
checks.

On the
Quality
Front, the
VTS
interacts
with the

quality
gate
system to
provide
faults
tolerance.

All defects
details are
tracked
through
the VTS to
ensure

that no
vehicle
gets
FC-OK
clearance
without

rectifying
the
defects.

MARUTI

SUZUKI
INDIA
LIMITED
Hence,
VTS is a
system

that
offers
real time
data to
facilitate
quick

decision.
It carries
out real
time
monitorin
g to

detect
errors
and
quality
issues
well in

time; it
broadcast
s
messages
that
facilitate

in-line
correct
evection
at the
shop
floor.