Cost Sheet – TATA NANO

SEATGroup 4

101.Vidhi Agarwal111. Biswarup Das118.Gouav Kumar Ganguly122.Digant Vaibhav Gupta130.Gurdeep Kaur139.Gaur Hari Pal

Roadmap

• 1. Introduction (by Gaur Hari)• 2. Rental and Electricity Costs (by Gurdeep)• 3. Material Costs (by Digant)• 4. Labour Costs (by Vidhi)• 5. Costing Method, Assumptions (by Biswarup)• 6. Cost Sheet, Pricing, Analysis (by Gourav)

IntroductionGaur Hari Pal

TATA Motors and Nano – Overview

• Tata Motors Limited is India’s largest automobile company, with consolidated revenues of INR 2,32,834 crores (USD 38.9 billion) in 2013-14. It is the leader in commercial vehicles in each segment, and among the top in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments.

• The Tata Nano is a city car manufactured by Tata Motors. Made and sold in India, the Nano was initially launched with a price tag of 1100,000 (US$1,600) which was ultimately increased with time.

Car Seat

COMPONENTS BREAK UP:•Seat frames, •Armrest structures, •Headrest structures, •Backrest structures and components, •Seat cushion structures•Front seat towel bars, •Seat height-adjuster components, •Car seat cushion wire frames,

Rental and ElectricityGurdeep Kaur

Costs Break-down

Material CostsDigant Vaibhav Gupta

Costs Break-down

Labour CostsVidhi Agarwal

Costs Break-down

Costing Method, Assumptions

Biswarup Das

Costing Method

• We have chosen the Process Costing Methodology here

• As car seat manufacturing is mostly an assembly line process, hence it is more efficient if we utilise this technique

Process Costing

• 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.

Manufacturing Cost Assumptions

• Sheet metal thickness is assumed to be 3mm

• 0.90 wide mesh grades have been used• 8mm OD has been taken for tubular

structures

Cost SheetGourav Kumar Ganguly

Approportioning by Direct Labour Hours

Cost Sheet

Process 1 - BlankingDR CR

Particulars Amount Particulars AmountMaterial 436.1904 Output 1073.579Labour 628.0688    OH 9.32    TOTAL 1073.579   1073.579

Process 2 - RivetingDR CR

Particulars Amount Particulars AmountProcess 1 1073.579 Output 1610.369Material 218.0952Labour 314.0344    OH 4.66    TOTAL 1610.369   1610.369

Process 3 - CrimpingDR CR

Particulars Amount Particulars AmountProcess 2 1610.369 Output 2147.158Material 218.0952Labour 314.0344    OH 4.66    TOTAL 2147.158   2147.158

Process 4 - BoringDR CR

Particulars Amount Particulars AmountProcess 3 2147.158Output 2683.948Material 218.0952Labour 314.0344    OH 4.66    TOTAL 2683.948   2683.948

Process 5 - WeldingDR CR

Particulars Amount Particulars AmountProcess 4 2683.948Output 3757.527Material 436.1904Labour 628.0688    OH 9.32    TOTAL 3757.527   3757.527

Process 6 - JoiningDR CR

Particulars Amount Particulars AmountProcess 5 3757.527Output 4294.317Material 218.0952Labour 314.0344    OH 4.66    TOTAL 4294.317   4294.317

Process 7 - Die CastingDR CR

Particulars Amount Particulars AmountProcess 6 4294.317Output 10199Material 2399.047Labour 3454.378    OH 51.26    TOTAL 10199   10199

Process 8 - SolderingDR CR

Particulars Amount Particulars AmountProcess 7 10199Output 11272.58Material 436.1904Labour 628.0688    OH 9.32    TOTAL 11272.58   11272.58

Process 9 - FormingDR CR

Particulars Amount Particulars AmountProcess 8 11272.58Output 12346.16Material 436.1904Labour 628.0688    OH 9.32    TOTAL 12346.16   12346.16

Cost SheetProcess 10 - Cutting

DR CRParticulars Amount Particulars AmountProcess 9 12346.16Output 13419.74Material 436.1904Labour 628.0688    OH 9.32    TOTAL 13419.74   13419.74

Process 11 - BendingDR CR

Particulars Amount Particulars AmountProcess 10 13419.74Output 14493.32Material 436.1904Labour 628.0688    OH 9.32    TOTAL 14493.32   14493.32

Process 12 - Die Cushion Deep DrawingDR CR

Particulars Amount Particulars AmountProcess 11 14493.32Output 15566.9Material 436.1904Labour 628.0688    OH 9.32    TOTAL 15566.9   15566.9

Process 13 - IroningDR CR

Particulars Amount Particulars AmountProcess 12 15566.9 Output 17982.45Material 981.4284Labour 1413.155    OH 20.97    TOTAL 17982.45   17982.45

Process 14 - SpinningDR CR

Particulars Amount Particulars AmountProcess 13 17982.45Output 18519.24Material 218.0952Labour 314.0344    OH 4.66    TOTAL 18519.24   18519.24

Process 15 - Rubber FormingDR CR

Particulars Amount Particulars AmountProcess 14 18519.24Output 24423.93Material 2399.047Labour 3454.378    OH 51.26    TOTAL 24423.93   24423.93

Margins and Pricing

• The Cost of the seat comes to Rs.24424.• Adding an optimistic margin (automotive

industry) of 5%, we arrive at a Price of :• Rs.25645

Analysis

• The Highest Costing Processes are Rubber forming and Die Casting.

• As these are specialised processes requiring special skill-sets, the labour hours assigned to them constitute almost 44% of the Direct Labour Hours