Project Presentation

on

“COMPARITIVE STUDY ON COST CONTROL WITH

COST SHEET”

Under the Guidance of

DR. PRACHI BERIWALA
ASSOCIATE DEAN
 Introduction
Karnataka Soaps and Detergent Limited is a trusted industry leader with a long history of innovation and customer-centric excellence.
Founded in 1956, the firm has established a reputation for producing high-quality soap and detergent solutions that meet the different
demands of families and businesses throughout India.

“It is the successor to the Legislative Soap Factory (1918)"

 Cost Control in Manufacturing: The project focuses on cost control within the manufacturing sector, particularly in the soap
industry, highlighting the importance of managing costs to enhance profitability in a competitive market.

 Cost Accounting Significance: It emphasizes cost accounting as a strategic tool for managerial decisions, operational efficiency,
and profitability.

 Industry Overview: The study provides an overview of the global and domestic soap industry, its growth, market size, and the
challenges faced due to competition and market dynamics.

 Research Importance: The research underscores the need for effective cost control methods and the impact of cost management on
organizational performance.
Review of Literature

Rashmi M.J. & Dr. M.S. Yathish Chandra (2019) Tomasi Mutya (2020):

 Focus: Effective cost control systems in • Focus: Impact of cost control on organizational
competitive business environments. performance.
 Method: Analysis of labor and material • Method: Study of cost control techniques like
investment. budgeting.
 Findings: Successful cost control mechanisms • Findings: Cost control significantly improves
lead to lower actual costs compared to budgeted organizational performance.
costs.

Dr. Patrick Mulyungi & Kayisenga Sylvia (2020): Godwin Emmanuel (2021):

• Focus: Cost control techniques for improving • Focus: Cost control in Nigerian manufacturing
business efficiency. companies.
• Method: Evaluation of cost control measures in • Method: Study of profitability and cost control.
Kigali Bank. • Findings: Cost control positively affects
• Findings: Effective cost control tools enhance profitability.
business cost efficiency and competitive advantage.
Review of Literature

Effective Cost Control Technological Integration

• Reduces cost overruns and secures profits • BIM technology improves project cost
(Malkanthi et al., 2019). management (Wang, 2019).
• Enhances competitiveness and efficiency (Zhou,
2020).

Organizational Impact Challenges and Solutions:

• Cost control positively impacts business performance • Addressing price fluctuations and modern
(Akeem, 2019; Mutya, 2020). concepts is crucial (Abbas & Burhan, 2022).
• Strategic cost control increases profitability • Preventing project failure through effective cost
(Oyedokun et al., 2021). and time control (Olawale, 2022).
Statement of Problem

Problem:
Fluctuations in raw material prices, wages, and other overhead
costs create challenges for companies to manage expenses
effectively.

Solution: Cost control is crucial for improving a company’s

financial health.

Benefits of Cost Control:

• Improved profitability through cost reduction.

• Enhanced decision-making by forcing trade-off analysis
for savings.
• Accurate cost sheet creation through methodical expense
classification.
 Objectives of Study

1 Cost Reduction Analysis 2 Material & Labor Cost Assessment

Evaluate costing methods to identify Analyze current material costs and

opportunities for reducing both variable and evaluate labour efficiency.
fixed costs.

3 Production Control & Overhead Allocation 4 Cost Control System & Cost Sheet Impact

Examine the effectiveness of the production Assess the efficiency of the cost control
control system and allocation of fixed system and its influence on cost sheet
overhead costs. accuracy.
Research Methodology
Research Design
o Secondary Data: Industry reports, company annual reports, and other existing data sources provided a broad understanding
of the industry and KS&DL's position within it.
o Primary Data: Additional insights were gathered through interviews with company personnel in the financial department
(primary data).

Data Collection
 Timeframe: The study analyzed data for a five-year period ending March 31, 2023 (31/3/2019 - 31/3/2023).
 Data Sources:
Primary: Interviews with company financial department personnel.
Secondary: Company annual reports, Industry reports, Online resources (websites, brochures)

Data Analysis Techniques

 Trend Analysis: Trend percentages were used to identify changes in financial statement accounts over the five-year period.
 Common Size Analysis: Common size statements were employed to express financial statement items as a percentage of a
common base (e.g., total sales revenue) for easier comparison across years.
 Comparative Analysis: Comparative statements were utilized to compare financial performance metrics across the five-year
timeframe.
Findings
Cost & Profit

 Material cost increased due to higher production output (except for 2021-2022).

 Labor cost decreased due to reduced employee benefits (except for 2021-2022).

 Prime cost increased year-over-year (except for 2021-2022), indicating rising production.

 Factory overhead increased due to rising customer demand.

 Profit fluctuates due to factors like new products and purchase cost.

 All products yield good net profit.

Other Findings

 Only process costing is used, no other costing methods are implemented.

 The company functions smoothly due to a departmental structure and minimal misunderstandings.

 Increased competition from new companies due to more investors.

Suggestions
Employee Management Product Development & Marketing
 Invest more in research and development
 Consider employee experience in using advanced technology.
decision making.
 Improve sales promotion strategies to gain
 Transfer employees based on market share.
performance and expertise.
 Increase marketing efforts compared to
competitors.

Cost Management
 Switch from process costing to activity-based costing for better cost analysis.
 Reduce reliance on imported materials and focus on self-manufacturing to lower material
costs.
Conclusion

1. Market Dominance: KSDL excels in medium and large-scale markets.

2. Strong Reputation: The company enjoys a positive reputation for quality products.

3. Effective Resource Use: Employees and managers utilize resources efficiently.

4. Customer Satisfaction: High satisfaction with product quality and employee behaviour.

5. Pricing Challenge: Products are not affordable for lower-income customers.

6. Advertising Needs Improvement: Effective for some products, but requires enhancement
overall.

7. Positive Performance: Strong overall performance with a promising future.

Conclusion
Strengths:
 Market leader with diverse products across sectors.
 Strong brand reputation in domestic and international markets.
 Efficient resource management.
 High customer satisfaction (product quality, quantity, service - for some products).
 Overall positive performance.
Weaknesses:
 Products not affordable for everyone.
 Inconsistent product advertising effectiveness.
Opportunities:
 Improve product affordability for a wider market reach.
 Enhance marketing consistency for all products.

Overall:
KS&DL is a successful company with room for growth. By addressing affordability and marketing,
they can solidify their market position.
Bibliography

 Asika, N. (2005). Research methodology in behavioural science. Lagos: Longman Nigeria Plc.

 Reeve, J. M., & Philpot, J. W. (2008). Applications of statistical process control for financial
management. Journal of Cost Management(fall).

 Sikka, T. R. (2003). Fundamentals of cost accounting (5th ed.). India: Viva Books Private Ltd.

 Wing, K. T. (2000). Using enhanced cost models in variance analysis for better control and
decision making. Management Accounting Quarterly.