Case Study Ppt

Case Study • Select a manufacturing organisation • Identify the activities • Know the arrangement / hierarchy • Trace the departmentalisation • Know the cost objects

Case study

Company Profile • • • •

Bajaj Auto Limited Type Founded Headquarters

Public 1945 Pune, India

• Key people – Rahul Bajaj (Chairman), – Rajiv Bajaj (Managing Director)

• Revenue ▲ Rs. 81.063 billion (2005) or USD 1.32 billion • Net income billion

▲ Rs. 11.016

• Employees 07)

10,250 (2006-

Organizational Hierarchy Board of

directors Managing director

Two wheelar bss unit

Finance

Commercial vechile unit

International bss unit

MIS

HR

Engineering & R&D

commerce

Cost & cost objectives • Cost is a resource sacrificed or forgone to achieve a specific objective. • A cost object is anything for which a separate measurement of costs is desired.

Overheads Overheads are all expenses other than direct expenses. Classification of overheads:functional classification element wise classification Behaviourwise classification

Functional classification • • • •

Factory overheads Administration overhead Selling overhead Distribution overhead

Elementwise classification • Indirect material • Indirect labor • Indirect expenses

Behaviourwise classification • Fixed overhead • Variable overhead • Semi variable overhead

Basis of apportionment • • • • •

Area occupied No. of employees Direct wages Capital values Direct labour hours or machine hours.

Methods of Re-Apportionment • • • •

Direct distribution method. Step ladder method. Simultaneous equation method. Repeated distribution method.

Primary Distribution

secondary Distribution