COSTING TECHNIQUES

AND OPERATING PART OF

ANANT SPINNING MILL-
MANDIDEEP

Submitted by:
Gagan Singh
Shubham Mohabe
Rohan Shrivastava
Shrikant Somani
Mamta Bhojwani
Nidhi Singh
Shishir Jain
Varsha Nathnani
 ANANT SPINNING MILL
• Anant spinning mill is a group owned
by Vardhman Textiles Ltd., formerly
Mahavir Spinning Mills Limited,
• The Company operates in five
segments: yarn, sewing thread,
steel, fibre and fabric
• Subsidiaries include VMT Spinning
Company Limited, VTL Investments
Limited, Vardhman Acrylics Limited
and Vardhman Yarn and Threads
Limited
• The group is one of the largest spinning
group of the country with a spindlier
of over 5, 50,000.
• The group has 12 production plants
located in the states of Punjab,
Himachal Pradesh and Madhya
Pradesh.
• In many of the yarn market segments,
Vardhman holds the position of
market leader besides being a large
and reliable supplier in the country.
• Vardhman is also the largest exporter
of yarn from India. The group yarn
exports amount to over US$ 100
million covering the most quality
conscious markets in theworld.
• The total export of Cotton yarn of the
group is about 6% of total export of
cotton yarn from the country.
•
 METHOD OF COSTING
PROCESS COSTING-


• It refers to the costing or process

involved in converting materials
into finished goods.
• Under this method the cost of
operation of each process or
operation and the cost of transfer
are ascertained .
• It is also known as continuous
operating costing.
• OPERATION COSTING
 this method of costing is also used
.it basically comes in the process
costing method.
 Under this method ,each operation
in each stage of production or
process is separately costed.
Therefore,the cost of finished goods
is determined.
 
 TECHNIQUES OF COSTING
AT ANANT


• Marginal costing: In this technique, cost

is divided into fixed and variable and
the variable is of special interest and
importance. This is because, marginal
costing regards only variable costs as
the costs of products. 
• Fixed cost is treated as period cost and
no attempt is made to allocate or
apportion this cost to individual cost
centers   or cost units. The Company
uses this type of Costing technique.
 PROCEDURE
• The average count of the plant
• Capacity of the plant -  No of spindles to be
installed and the number of back process and
winding machines required
• Investment on machineries
• Investment on land
• Investment on building
• working capital required
• product lay out, the count pattern
• Selling price of individual counts
• raw material cost(including freight, duty etc)
• packing cost per kg of yarn

• freight per kg of yarn
• direct labour cost
• indirect labour cost
• fixed power cost
• variable power cost
• spares consumption
• administration costs
• selling  overheads

 STEPS
• STEP NO.1: Contribution to be
calculated.  In general for a
spinning mill, contribution per
kg oaf particular count is
calculated    to work out the
economics for a new project as well
as for a running   mill.
• STEP NO. 2: To work out the Total
Investment cost (machineries,
accessories, land and building,
humidification and electrical
instruments)
• STEP NO.3: To calculate the
expenses ( labour, power,
stores,working capital, insurance
etc)
•
• STEP NO.4: PAY BACK
CALCULATION
 COSTING SOFWARES

• The SAP CO (Controlling) Module

provides supporting information to
Management for the purpose of
planning, reporting, as well as
monitoring the operations of their
business. Management decision-
making can be achieved with the
level of information provided by
this module. 
•
• INVENTORY TRIGGER
 The company is also having a
facility of sap software in which there
is a function which gives an
indication to the company about the
raw material availability as soon as it
reaches to the 20 percent mark and
also by the help of this inventory
trigger system the information is
reached directly to the vendors who
are integrated with the system and
to the company also.
 ERP SOFTWARE
• Enterprise Resource Planning (ERP) is the latest
high end software solution, Information
Technology has lent to the world of business
application.
• An ERP software solution seeks to streamline
and integrate operations, processes and
information flows in an enterprise, to
synergize the resources of an organization
namely men, material, money and machine.
• In other words, ERP systems integrate all data
and processes of an organization into a
unified system.
• A typical ERP will use multiple components of
computer software and hardware to achieve
the integration.
• A key ingredient of most ERP systems is the use
 COST CONTROL
METHODS
• Inventory control method-
• budgetary technique-
 for the purchase of raw material
and stock what the company require
is to a purchase budget in terms of
quantities and value involved. the
sales is stipulated of the
corresponding period generally works
out to be a key factor.

• Control ratios
• Inventory turnover ratios


• Material turn over =value of material

used in the period / value of average
material held during the period


• Finished stock turnover=value of

finished stock sold in the period/value
of average stock held during the
period

• Labors cost control
• Time recording is done
• Daily time sheets and weekly time
sheets
• Ratios is calculated like
• Cost ratios =direct labour cost /cost
of production
•
 INVENTORY CONTROL
 ANANT uses Just in time is a ‘pull’
system of production, so actual
orders provide a signal for when a
product should be manufactured.
Demand-pull enables a firm to
produce only what is required, in the
correct quantity and at the correct
time.
•