Costing System in batch production (PEL)

1 Managerial Accounting

First of all I am thankful to ALLAH Almighty who has created

us, gave us the power to understand and the power to gain

knowledge. Without HIS kind guidance I would have not

been able to complete any task given to me.

Managerial Accounting

Submitted to: Mr. Abdul Rafey

Dated: July 20, 2009

Submitted by:

M.Khubaib Khan Shirwani (043432-031)


Table of ContentsAcknowledgement………………………………………………………………..

Activity Chart ……………………………………………………………………

Authorization Letter……………………………………………………………..

Executive Summary……………………………………………………………..

Refrigeration Industry of Pakistan ………………………………………………

Costing system of Refrigeration Industry ………………………………………

Company Description …………………………………………………………….

Strategic Plan & Focus……………………………………………………………

Cost of Production……………………………………………………………….

Cost System in Batch Production………………………………………………..

Product costing in Batch production…………………………………………….

Costing System in PEL an overview………………………………………………

Cost-volume profit analysis………………………………………………………

Profit planning & Budgeting…………………………………………………….

Standard costing…………………………………………………………………..

Conclusion & Suggestion………………………………………………………….

Bibliography………………………………………………………………………

Annexure ………………………………………………………………………….


Acknowledgment

For whom who created us, fed us, brought us up and gave us

knowledge. Who is the most merciful, most beneficial and most

forgiver. "In the name of God, the Merciful, the Compassionate. Say (O

Muhammad) He is God the One God, the Everlasting Refuge, who has

not begotten, nor has been begotten, and equal to Him is not anyone."

For whom who is more loving and kinder than a mother to her dear

child? For whom who are the First and the Last?

I am very thankful to Mr. Rafey at UMT who gave me a chance to prove

myself to gain something, to learn something, to experience something

and test myself through an independent study. I am desperately like to

thank Mr. Manzar Hassan (C.F.O. PEL) and S.M.Amir(Manager costing

PEL)who gave me the opportunity to know the deep complexities of

Costing Systems as a key topic of managerial accounting.


Authorization Letter

To Whom It May Concern:

I, Abdul Rafay, Resource Person for the course of Managerial Accounting at UMT,

hereby authorize the following student to conduct an Independent Study on ‘Costing

system of refrigeration industry in Pakistan’.

- M. Khubaib Khan Shirwani ID # 043432-031

I wish him good luck for their project.

Authorizer,

_________________________________

Abdul RafayResource Person: Managerial AccountingSchool of Business & EconomicsUniversity of Management & Technology


Activity Chart

Date Topic Status Remarks

13-05-09 Independent Study

Registration

Complete Due to clash in subjects in Current Semester & improvement of c.g.p.a

02-06-09 Dean recommendation

Done

09-06-09 Head of Dept. recommendation

Done

10-06-09 Meeting with Resource person

Mr.Rafey

Done Receiving of Recommendation from Dean & Head of Dept. of Finance.

12-06-09 Road map for Study

Done Recommended book to study to understand the topics of the subject

19-06-09 PEL Topic for Ind. Study

Done Study about the Costing system of Manufacturing Industry.

24-06-09 Meeting with C.F.O. PEL

Done Discuss the scope of study & Manager Costing was consulted

29-06-09 Meeting with Resource Person

Continuous Discuss the progress of the study.

03-07-09 Manager costing Continuous Communication through Email & Cell phone

11-07-09 Resource person Continuous 50 % of the study is done

20-07-09 Manager costing Meeting

23-07-09 Resource person 70% of the study submittedRefrigeration industry

28-07-09 White House meeting C.E.O. White house shared some precious Information

07-08-09 Resource Person Meeting Ask some more Information about the pricing system

14-08-09 Manager Costing

Meeting Collection of some formats of Costing system of PEL.

16-08-09 Resource Person Meeting Submission of 90% of study


Executive Summary

After conducting a thorough research on the costing system of refrigeration industry in

Pakistan. I concluded that, Pakistan is on of the growing Refrigeration Market over the

years in the world. Pakistan has shown massive growth in the manufacturing of Air

conditioner & Refrigerator. I was assign to conduct its costing system how these

manufacturers incur their cost to earn maximum profit with ultimate efficiency. I took

Pak Elektron ltd(PEL) as an assumption of the study. After visiting the plant in &

Finance office of PEL in Lahore I come to know that most of the Refrigerator

Manufacturers are Doing Batch production same is the case with PEL. They have an

activity based Material costing system but they incur their Labor & F.O.H. periodically

and than they divide it to different jobs done in manufacturing procedure. Because it is

very difficult to calculate Labor & FOH as per job completed. Therefore, I attached some

of the formats PEL is using for its costing system for the better understanding of the

costing system of refrigeration industry in Pakistan.


Refrigeration Industry of Pakistan

Pakistan has in recent years offered a rapidly expanding market for airconditioning and

refrigeration equipment and parts. Local production has increased significantly and meets

over 75 percent of the total demand. by nearly 31 percent, averaging a growth of over 15

percent each year. Both local production and imports grew at a similar rate, a growth of

33 percent, but its share of the total market remained at approximately 23 percent. The

U.S. share of the Pakistan market is nearly 7 percent, but its share of the import market is

approximately 30 percent. Pakistan's economic conditions make it unlikely that the total

market will grow by more than 10 percent each year over the next two years. Growth is

expected to be centered on local production. The import market growth is expected to be

limited to five percent annually, and to be derived largely from demand from local

manufacturers, all of whom use imported raw materials, components and sub-components

to manufacture their products. U.S. exports are expected to increase as an increase in

local production will raise the demand for air conditioner compressors; and increasing

commercialization will increase the demand for industrial airconditioning and

refrigeration equipment, for which the U.S. already enjoys an excellent market

reputation.

The growth of the domestic industry has been encouraged by increasing demand and by

government policies which encourage local production. The Government of Pakistan

(GOP) offers lower customs duty rates to air conditioning and refrigeration equipment

manufacturers for the import of raw materials, components and sub-components which

are not manufactured locally. It also enforces a deletion program. As a result, Pakistan

now produces the country's entire demand for deep freezers, approximately 75 percent of

its demand for refrigerators, and nearly half of its requirement for airconditioners. Local

production is really an assembly-cum-manufacture process.

Although the market is continuing to grow, effective demand has been surpressed as a

result of the slowdown in the country's economy: bank loans are no longer readily

available to manufacturers, and current lending rates are high; and consumers face higher

prices because of the fall in the value of the rupee vis a vis the dollar. The restricted

demand has now led to a reduction in production by some units, while others have not be

able to increase production as planned.


Raw material

Imports are now comprised largely of raw materials such as polystyrene sheets (ABS and

HIPS), aluminum sheets, steel sheets,copper tubing, electrostatic paint powder, CFC-free

gases, chemicals for insulation materials manufacture; components such as compressors,

thermostats, switches, electric motors, door gaskets, evaporators, driers and electronic

controls; and of complete units such as industrial airconditioning equipment,

medical storage refrigerators, blood banks and cold storage plants. Pakistan's financial

crisis and its trade imbalance has led to repeated devaluations of the Pakistan Rupee that

have eroded the consumer's purchasing power. This has resulted in a curtailment of

production plans of the well-established manufacturers, and the reduction in production

of the less efficient units.

Manufacturers face other difficulties as well: bank loans are available only at interest

rates varying from 12 to 18 percent; and production costs have increased as a result of the

increase in electricity charges. A semi-government manufacturing facility for domestic

refrigerators and airconditioners has ceased manufacture, a private sector firm has

curtailed its production of split units, and yet another private sector manufacturer has

closed its deep freezer manufacturing line and postponed plans for the assembly of split

airconditioners. As a result, the total market is not expected to grow beyond 10 percent

and the import market by a mere 5 percent over the next two years. While the demand for

raw materials is expected to increase, the demand for components can be expected to

increase at a diminishing rate as production units implement the GOP's deletion program.

According to this program, all local manufacturers of domestic appliances are required to

chalk out a deletion program, spread over a maximum of five years, within which time

they are required to achieve a minimum deletion in the manufacture of components to the

extent of 75 percent of the C and F value of the inputs of the manufactured items.

Product Definition

This sector analysis of the airconditioning and refrigeration equipment market includes

the following products identified by their corresponding Harmonized System (H.S.)

Codes:

H.S. Code Product/Product Categories

8415 Air conditioning equipment, residential/


- commercial and industrial, and parts

8414.30 Compressors for refrigerating (and air-

- conditioning) equipment.

8418.10-69 Refrigerators, freezers and other

- refrigerating equipment, electric or

- other, and parts; and cold storage

equipment.

Suppliers

Pakistan's major suppliers are South Korea for built-up refrigerators, and Japan for

airconditoners. Its major suppliers of parts and components as well as of industrial

refrigeration equipment are South Korea, Japan, Thailand, Italy, the United States,

France, and more recently, Malayasia. U.S. imports

in this industry sector have been concentrated on the import of compressors for

airconditioners.

Pakistan's market for airconditioning and refrigeration equipment and parts has shown

steady overall growth over the last decade. The domestic industry has been spurred by

growing demand and by government policies which encourage local manufacture.

Several manufacturing units have in recent years increased

or diversified their production for the assembly-cum-manufacture of air-conditioning and

refrigeration equipment. As a result, the total market for air-conditioning and

refrigeration equipment grew by nearly 180 percent over the last decade and has grown

by over 30 percent over the last three years. Duties made imports of built-up refrigeration

and airconditioning units unattractive.. Domestic production meets theentire country's

demand for deep freezers, 75 percent of the demand for refrigerators, 50 percent of the

demand for split airconditioning units and 60 percent of the demand for window

airconditioning units. Water coolers are no longer imported as the production

of two or three domestic units meets market demand. Their supply is supplemented when

required by a number of small units based chiefly in Punjab province.

Foreign Suppliers

The following lists the country's major foreign suppliers to this industry sector:


Refrigerators: LG, Samsung and Daewoo from South Korea; and

National, Japan. Split unit airconditioners: National, Japan; LG, South Korea; and

Carrier, USA. Window airconditioners: Toshiba and National from Japan; Fujitsu, Japan

under the brand name GENERAL from Malaysia, Thailand and Indonesia; and several

Chinese manufacturers. Parts for industrial refrigeration and airconditioning equipment:

Matsushita and Sanyo from Japan

for gas-fired chillers; York, Carrier and Trane from the U.S. for electric chillers and

airside equipment;Rotacell from Malaysia and Misan from Thailand for cooling towers of

up to 300

tons capacity; Shinwa, Japan for large and small cooling towers; and both Marley and

Baltimore from the United States for cooling towers of up to 1,000 tons capacity.

Compressors for refrigerators: Carrier, Bristol, Tecumseh and

Copeland, USA. Compressors for deep freezers: Unite Hermatique, France (a licensee of

Tecumseh, USA); Nicchi,

Italy; Danfoss, Germany; Danfoss, Slovania; and Embracco, Brazil.

Thermostats: Ranco, U.K; Pacific Controls, South Korea; Matsushita, Japan; Danfoss,

Germany; and ATEA Italy. Fan motors: Olmo, Italy and EMB,Germany. Solid state

relays: Sealed Unit Parts Co, USA.

Copper tubing:

Bouyang, South Korea and Trefemeteaux, France. Steel sheets: Kawasaki, Japan and

Thessyn, Germany. Aluminum sheets: ALCAN, Italy and Kibar, Turkey.

Chemicals for manufacture of insulation materials and

polystyrene sheets (ABS AND HIPS): ICI, U.K; Bayer and BAS from Germany and

DOW Chemicals, (USA) from Singapore.

Costing system of Refrigeration Industry

After making an in depth study of refrigeration industry of Pakistan we can move forward

to study the implications of costing system of refrigeration industry. As we know that

Managerial accounting suggests us to go for Job order costing in batch production for the

engineering industry like refrigeration. Therefore, we select Pak Electron Ltd. To further


investigate the implications, fundamentals of Batch production on the profitability of

manufacturing process of PEL.

Company Description

Pak Elektron Limited (PEL) is the pioneer manufacturer of electrical goods in Pakistan.

It was established in 1956 in technical collaboration with M/s AEG of Germany. In

October 1978, the company was bought by the Saigol Group of Companies. Since its

inception, the company has always been contributing towards the advancement and

development of the engineering sector in Pakistan by introducing a range of quality home

appliances and by producing hundreds of engineers, skilled workers and technicians

through its apprenticeship schemes and training programmers.

The company comprises of two divisions:

Appliances Division

Power Division

Power Projects

The products manufactured by PEL have always been of high standard and the name

'PEL' is synonymous with QUALITY all over Pakistan. Since its inception, the company

has been working for the advancement and development of engineering know-how in

Pakistan. The company has produced hundreds of engineers, skilled workers and

technicians through its apprenticeship schemes & training programs.

PEL has been continuously adding new products to its range. As a result, PEL has

registered a significant increase in its sales volume, during the last ten years.

ISO 9002 CERTIFICATION

PEL was 16th Company in Pakistan which got ISO 9002 Certification in 1997, since then

PEL Management is applying this International Standard Practices for Effectively

Managing Quality of Products and Services that Company Offers. The International

Standard Practices in PEL have been Upgraded as per the Revised ISO 9001 Standards

and its Scope of Application is expanding ever since and Top Management is

Committed to make PEL a Total Quality Management (TQM) Company.


In PEL Company Quality is the Subject of Management at all Levels. Top management is

not only tremendously improving our Working Environment but also investing in

improving internal Communication Network for better Teamwork. Continuous Up-

gradation in production facility/equipment thus going for State-of-the-art production

facility reflects management Vision and commitment for Quality. Having around Fifty

years of Manufacturing experience with a cooperative and dedicated employees and now

coupled with efficiency monitoring processes and Data Analysis enable management to

take Preventive Actions before things really go wrong.

Elimination of wasteful activities, practices, processes, norms and behavior are the top

management's priorities that need to be managed so that the philosophy of ZERO

DEFECT can be taken on board. Benchmarking with National and International repute

Organizations will be in our road to manufacturing excellence to prove PEL as a World

Class Manufacturer.

Appliances Division

PEL’s Appliances Division is the flag carrier of the Saigol Group. This Division of PEL

consists of home appliances manufacturing.

PEL window-type air conditioners were introduced in 1981 in technical collaboration

with General Corporation of Japan. Ever since their launch, PEL air conditioners have a

leading position in the market. PEL air conditioners cooling performance has been tested

and approved by Copeland and ITS USA and today PEL holds approximately 45% of air

conditioners market share.

PEL launched its Cool life Split air-conditioner which is a technologically advanced

model specially designed for Pakistan market. This masterpiece from PEL provides

maximum cooling even at very high temperatures while minimizing your electricity

consumption. Its salient features include:

Low power consumption

Low Voltage startup


Hydrophilic Aluminum Fins

3-bend heat exchanger

Scientific Louver Rotation (SLR)

Independent de-humidification function

Anti-bacterial and anti-dust filters

PEL Air Conditioners have been specially designed for countries, having climatic

conditions similar to Pakistan. The Air Conditioners have excellent cooling capabilities at

extreme temperatures at varying levels of humidity; high air dust and uneven local power

supply conditions.

Power Division

PEL Power Division manufactures energy meters, transformers, switchgears, Kiosks,

compact stations, shunt capacitor banks etc. All these electrical goods are assembled

under strict quality control and in accordance with international standards. PEL is one of

the major electrical equipment suppliers to Water and Power Development Authority

(WAPDA) and Karachi Electrical Supply Corporation (KESC), which are the largest

power companies in Pakistan.

Over the years, PEL electrical equipment has had been used in numerous power projects

of national importance within Pakistan. PEL has the privilege of getting its equipment

approved and certified from well-reputed international consultants such as:

Preece, Cardew and Rider, England

Harza Engineering Company, USA

Snam Progeti, Italy

Societe Dumezm, France

Miner & Miner International Inc. USA

Ensa, France

In spite of stiff competition from emerging local and multinational brands, PEL Group's

appliances and electrical equipments have remained in the spotlight due to constant

innovation. Strategic partnerships with Copeland, Danfoss, Samsung and others have


enabled the PEL Group to incorporate new technologies into existing product ranges,

thus giving the Pakistani market access to innovative, affordable and quality products.

The products manufactured by PEL have always been of high standard and the name

'PEL' is synonymous with QUALITY all over Pakistan. Since its inception, the

company has been working for the advancement and development of engineering know-

how in Pakistan. The company has produced hundreds of engineers, skilled workers and

technicians through its apprenticeship schemes & training programs.

PEL has been continuously adding new products to its range. As a result, PEL has

registered a significant increase in its sales volume, during the last ten years.

STRATEGIC PLAN AND FOCUS

This section covers three aspects of corporate strategy that influence the marketing plan:

Mission/Vision.

Goals.

Core Competencies/sustainable competitive advantage.

Mission/Vision

The mission and vision of Pak Elektron Limited (PEL) is to market lines of high quality

home appliances and power division products at affordable prices that satisfy consumers

in the fast growing electronic and power segment while providing challenging career

opportunities for employees.

Goals

Non-Financial Goals:

To add a new product to its range in every third year for increasing the sales

volume.

To set an image as the best quality of local home appliances.

To set an image as the best quality of local power division products.

Financial Goals:

To obtain a real (inflation-adjusted) growth in earning per share of 10% per year over

time.

To increase the market share of split unit to at least 20%-25% by the end of 2010.


Core Competencies/sustainable competitive advantage

Pak Elektron Limited (PEL) is the pioneer manufacturer of electrical goods in

Pakistan.

PEL was 16th Company in Pakistan which got ISO 9002 Certification, ever since

and Top Management is Committed to make PEL a Total Quality Management (TQM)

Company.

Huge distribution network all over Pakistan.

To translate these core competencies into a sustainable competitive advantage,

the company will work closely with key suppliers and distributors to build the

relationships and alliances necessary to satisfy the standards of customers.

Operating Results:

The gross sales of Rs. 8.075 Billion, from Rs. 6.077 Billion in the last year, have shown

an increase of 33%. Profit after tax has also registered a corresponding increase of 25%.

A list of key financial results is given below:


Financial Results (Rs. in Million) 2008 2007

Gross Sales 8,075 6,077

Gross Profit 1,489 1,070

Operating Profit 893 659

Profit Before Tax 442 280

Profit After Tax 347 277

Growth Rate

The industry is experiencing a phenomenal growth in last three to four years. Three years

back the total demand for split units was 180000 Units/year which rapidly increased to

280000 Units/year in 2002-03, in 2004 the demand reached to 300,000 units, in 2006 it

was 336000 units and in 2007 it is estimated to reach 350,000 units.


COST OF PRODUCTION

Cost of production varies from unit to unit. Average figures provided by the industry for

split units are:

Rs. Rs. Rs.Selling Price 20,000

Direct CostMaterials 14,000Labor & Factory Overhead 1,975 15,975 (15,975)

Gross Profit 4,025Indirect CostAdmin & Selling CostAdmin expenses 375Selling Cost Fixed 1,200Selling Cost Variable 450 2,025 (2,025)

Operating Profit 2,000Financial Charges Varies from

unit to unit

Cost System in Batch Production

Costs are assigned to each job or batch

A job may be for a specific order of inventory

May be a unit: ex.

or a Batch of units: ex.

A key feature:

Measures costs for each job completed - not for set time periods; Average cost per

unit computed on a per job basis.

o JOB ORDER COST FLOWS

A. In general, the cost flow parallels the physical flow of the materials as they

are converted into finished goods.

Manufacturing costs are assigned to Work in Process Inventory.


Cost of completed jobs is transferred to Finished Goods Inventory.

When units are sold, the cost is transferred to Cost of Goods Sold.

B. Recording Direct Materials, Direct Labor and

Overhead costs

Use a Job cost sheet to record the costs related to a specific job on a daily basis;

used to determine the total and unit costs of a completed job.

o DIRECT MATERIAL COSTS (DM)

Debit Raw Materials Inventory when Purchase direct or indirect materials

Materials requisition form shows written authorization when materials are issued

to (i.e., used in) production

Debit Work-in-Process Inventory when direct materials are Used

Indirect Materials used are treated as an overhead cost. (i.e., Debit Manufacturing

Overhead Account as shown later)

o DIRECT LABOR COSTS (DL)

Consists of gross earnings of factory workers, employer payroll taxes on such

earnings, and fringe benefits incurred by the employer.

Debit Work-in-Process Inventory when direct labor is recorded (ie., whether paid

or accrued) based on time tickets

Indirect labor is treated as an overhead cost. (i.e., Debit Manufacturing Overhead

Account as shown later)

o MANUFACTURING OVERHEAD COSTS (OH)

Assigning manufacturing overhead costs to a specific job is difficult (i.e., it is an

indirect cost). Therefore, it is assigned to products using an allocation process

Manufacturing overhead is a Control Account. It is used to keep track of two

things: Actual Overhead costs incurred and Overhead costs assigned to inventory

(also known as overhead applied).

DEBIT Manufacturing Overhead Control when

actual manufacturing overhead costs are incurred.

Note: The subsidiary ledger consists of individual accounts for each type of

overhead cost, but the controlling entry is a debit to Manufacturing OH


CREDIT Manufacturing Overhead Control

when Overhead is Applied to production.

Must be assigned to work in process and to specific jobs on an estimated basis by

using

o PREDETERMINED OVERHEAD RATE

Based on the relationship between estimated annual overhead costs and expected

annual operating activity.

Established at the beginning of the year.

Expressed in terms of an activity base such as

Direct labor costs, Direct labor hours, Machine hours, or any other

activity that is an equitable base for applying overhead costs to jobs.

Ideally, the activity base chosen should drive overhead costs

Assigning overhead costs to inventory involves a two-step process:

1st: Determine the Predetermined Overhead Rate:

2nd: Overhead is “Applied” or Assigned to work in process inventory during the

period based on actual activity.

SUMMARY OF COST FLOWS:

Debit WIP Inventory → FG Inventory → COGS

Product costing in Batch production


Job information (PEL)

Job # (Job # CS-100)

Job description Refrigerator

Date started (mm/dd/yyyy)September 2,2008

Date completed (mm/dd/yyyy)

September 30,2008

Number of units completed 1500

Direct Material Information:

Material 1

Material 2

Material 3

Material 4

Material 5

Date of issue (mm/dd/yyyy) 2-Sep-08 8-Sep-0815-Sep-

08 0-Jan-00 0-Jan-00

Requisition # 308 306 307 0 0

Quantity (Kg, Meters, etc.) 1500 1500 1000 0 0

Rate per unit 200 220 240 0 0

Direct Labor information:

Labor 1 Labor 2 Labor 3 Labor 4 Labor 5Date of incurre (mm/dd/yyyy) 5-Sep-08

10-Sep-08

20-Sep-08 0-Jan-00 0-Jan-00

Time card # 306 302 303 0 0

Number of hours 2500 2000 1500 0 0

Rate per hour 25 27 28 0 0

Manufacturing overhead information:

MOH 1 MOH 2 MOH 3 MOH 4 MOH 5

Date (mm/dd/yyyy) 5-Sep-0810-Sep-

0820-Sep-

08 0-Jan-00 0-Jan-00Activity Base (DLH / MH / DLC) DLH DLH DLH DLH DLH

Quantity 2500 2000 1500 0 0

Application rate 25 27 28 0 0

Other information

Date of shipment (mm/dd/yyyy)30-Sep-

08

Units shipped 1500

Sale price per unit 800

Marketing & Admin. expenses per unit 50

Job Cost Sheet(PEL)


Job number (Job # CS-100) Descriptio Refrigerator

Date started September 2,2008Date completed

September 30,2008

Number of units completed 1500

Direct Material

DateRequisition # Quantity (units)

Unit price (Rs.) Cost (Rs.)

02-Sep-08 308 1500 200 300,00008-Sep-08 306 1500 220 330,00015-Sep-08 307 1000 240 240,00000-Jan-00 0 0 0 000-Jan-00 0 0 0 0

Direct Labor

Date Time Card # Hours Rate (Rs.) Cost (Rs.)

08-Sep-08 306 2500 25 62,50010-Sep-08 302 2000 27 54,00020-Sep-08 303 1500 28 42,000

0-Jan-00 0 0 0 00-Jan-00 0 0 0 0

Manufacturing overhead (Applied)

DateActivity Base Quantity

Application rate Cost (Rs.)

08-Sep-08 DLH 2500 25 62,50010-Sep-08 DLH 2000 27 54,00020-Sep-08 DLH 1500 28 42,00000-Jan-00 DLH 0 0 000-Jan-00 DLH 0 0 0

Cost Summary

Cost item Amount (Rs.)Direct Material 870,000

Direct labor 158,500Manuacturing overhead 158,500

Total cost 1,187,000

Per unit cost 791.33

Shipping Summary

DateUnits shipped

Units remaining in ending inventory

Cost balance (Rs.)

30-Sep-08 1500 0 0


Profit summary

Sale 1,200,000 Less: Factory cost 1,187,000 Marketing & Admin. expenses 75,000 Net Profit (62,000.00) Profit per unit (41.33) profit percentage -5.17%

Batch costing is a modified form of job costing. While job costing is concerned with

costing of jobs that are executed against specific orders of the customers, batch costing is

used where articles are manufactured in definite batches. The articles are usually kept in

stock for selling to customers on demand. The term batch refers to the lot in which the

articles are to be manufactured. Whenever a particular product is required, one unit of

such product is not produced but a lot of say 500 or 1000 units of such product are

produced. It is therefore also known as “Lot Costing”. This method of costing is used in

case of pharmaceutical or drug industries, ready-made garment factories, industries

manufacturing component parts of radio sets, television sets, watches, etc.

The costing procedure for batch costing is similar to that under job costing except with

the difference that a batch becomes the cost unit instead of a job. Separate job cost sheets

are maintained for each batch of products. Each batch is allotted a number. Material

requisitions are prepared batchwise, the direct labour is engaged batchwise and the

overheads are also recovered batchwise. Cost per unit is ascertained by dividing the total

cost of a batch by number of items produced in that batch. Ordinary principles of

inventory control are used. Production orders are issued only when the stock of finished

goods reaches the ordering level. In case the batches are repetitive, the costing work is

much simplified.

Since in batch costing production is done in batches and each batch consists of a number

of units, the determination of optimum quantity to constitute an economical batch is all

the more important. Such a quantity can be fixed on the basis of same formulae and

principles as are applicable to economic order quantity of materials.


Economic Batch Quantity = 2U x P

S

Where:

U = Annual demand

P = Setting up and order placing costs per batch

S = Storage or inventory carrying over cost per unit per annum

COSTING SYSTEM IN PEL-AN OVERVIEW

o PEL Job Order Costing System in Batch production

Three Divisions (SBUs)-Multiple Products

o Appliances Division

Refrigerators 14 to 18 different models

Air Conditioners 06 to 08 different models

Deep Freezers 05 different models

Trading Items 05 different products

o Power Division

Distribution Transformers 12 to 15 different ratings

Power Transformers 04 to 06 different ratings

Energy Meters 05 different ratings

Switchgears Various products

o Power Projects

Various projects, each project is, at the same time, treated as an individual job

with multiple jobs/ functions going on within a project.

Cost Accumulation On individual jobs

Raw Material, Direct Through Inventory System Issue Vouchers

LabourStandard – Standard hours x standard rate, at each production transaction

FOH Standard-Applied at predetermined rate at each production

transaction

After cost is accumulated on a job, cost of units produced (production transaction)

is transferred to Cost of Goods Manufactured. Each job is analysed with respect


to standard material and actual. Total of all jobs (completed production) of one

model is reported as total. For the sake of simplicity, conversion cost is treated as

period cost and expensed out on monthly basis.

Reporting On Monthly Basis. Built upwards from each job to model to

product, then to division and ultimately to company level

Sale Variances-Volume & Price

Material Cost Variances-Price and Volume



Power Division

Appliances Division

Power Projects (new)

Refrigerator Microwave oven

Air Conditioner Job Order #Job Description10,000 units13,500Rs./unit3months

Divisions

OrSBU’s

Logistics Finance

Admin Marketing

Production Injection moulding section

Conjunction Section Lower Assembly Sec.

5 others Etc.

Job Cost SheetD.M+D.L.+F.O.H.=T.C./Job, T.C./Units=Cost/unit

Direct MaterialTreat IndividuallyRate/unit Requisition#Quantity kg,meters,etc.Date

Direct LaborAccm.periodically30 daysApp. RateDifficult to measure /job.#.of hours

F.O.H.Accm. Periodically30 daysApplication rateDifficult to measure / jobQuantity#.of hours

Investment Centers & Transfer pricing?

Batch ProductionStandard Rate,Quantity,Material,Hours,F.O.H. & Price.

Variance Analysis (Actual vs. Applied)

Process CostingNot Applicable in PELEngineering Industry

Using Batch Production

Budgeting System

Production Report

CVP AnalysisContribution Margin.C.M. Rtio B.E.P.Margin of saftySales Before TaxSales after Tax

Cost-volume profit analysis

Company Name: (PEL)

Period:For the coming year2008

Estimated or Budgeted information:

Sale price per unit 63 Rs.

Sale in units 14,400 Units

Variabel cost per unit 43 Rs.

Fixed cost in total 100,000 Rs.

Target profit before tax 0 Rs.

Target profit after tax 288,000 Rs.

Tax rate 35%

Break Even Point is the level of sales required to reach a position of no profit, no loss. At

Break Even Point, the contribution is just sufficient to cover the fixed cost. The

organisation starts earning profit when the sales cross the Break Even Point. Break Even

Point can be calculated either in terms of units or in terms of cash or in terms of capacity

utilization. It can be calculated as follows:

BEP in units = Fixed Cost / Contribution per unit

BEP in cash = Fixed Cost / P.V. Ratio

BEP in terms of capacity utilization = BEP in units / Total capacity x 100


Break Even Volume can be better explained with the diagram above.

PELFor the coming year2008

Contribution margin

Per unit 20 Rs. per unit

In Total 288,000 Rs.

Contribution Margin Ratio

0.320

In percentage 32.00%

Break-Even point

In units 5,000 units

In Rupees 312,500 Rs.


Margin of Safety



In percentage 65.28%

Sale to earn target profit (Before Tax)



Sale to earn target profit (After Tax)


In Rupees 1,697,115 Rs.

Proof of Break even point: Rs.

Sale: 312,500

Less: Variable cost: 212,500

Contribution margin: 100,000

Less: Fixed Cost 100,000

Profit before tax 0

Less: Tax 0

Net profit 0

Proof of Target profit befor Tax Rs.

Sale: 312,500

Less: Variable cost: 212,500



Profit before tax 0

Less: Tax 0

Net profit 0


Proof of Target profit after tax Rs.

Sale: 1,697,115

Less: Variable cost: 1,154,038



Profit before tax 443,077

Less: Tax 155,077

Net profit 288,000

The positive difference between the operating sales volume and the break even volume is

known as the margin of safety. The larger the difference, the safer the organization is

from a loss making situation. It can be calculated either in cash or in units.

Margin of Safety can be derived as follows:

Margin of Safety = Actual Sales – Break even Sales

Margin of Safety (in cash) = Profit___

P/V Ratio

Margin of Safety (in units) = Profit______

Contribution/unit

What is Profit/Volume Ratio?

Profit-Volume Ratio expresses the relationship between contribution and sales. It

indicates the relative profitability of diff products, processes and departments.

Formulae:

P/V ratio = S – V/ S X 100

= Cont / Sales X 100

= Change in profit or loss / Change in sales

Profit planning & Budgeting


What is Budgetary Control? What are the steps involved in Budgetary Control?

Budgetary control is the management process of using budgets to monitor and control the

performance of the organization. This is done by comparing the planned values (in the

budget) with the actual values as they occur during the year.

A budget has been defined as a financial and quantitative statement prepared and

approved prior to a defined period of time, of the policy to be pursued during that period

for the purpose of attaining a given objective.

The following steps are involved in Budgetary Control:

1. Establishment of Budgets: Targets are fixed for each function relating to the

responsibilities of individual executives.

2. Measurement of actual performance.

3. Comparison of actual performance with budgeted performance to detect deviation.

4. Analysis of the causes of variations and reporting

What are the uses of diff budgets?

It serves a declaration of policies

Defines the objectives/ targets for executives, at all levels.

Means of coordination of activities

Means of communication

Facilitates centralized control

Helps in planning activities

COMPETITIVE PRIORITIES:COMPETITIVE PRIORITIES:

COST:

Low cost

QUALITY:

Consistent quality with high class appliance performance

FLEXIBILITY:

A lot of volume, equipment and workforce flexibility is present

LOCATION:

PAK ELEKTRON was set up in 1956, at that time the location site was selected outside

Lahore City 14km Ferozpur road, Kot Lakhpat Industrial Area. The site for the purposes


of the operation was selected by adopting the judgmental method and no sophisticated

technique was utilized. The following were the dominant factors, which moved the

management to select the site for the facility location.

CAPACITY:APACITY:

“Capacity is the maximum rate of output for a facility”.

CAPACITY MEASURE:CAPACITY MEASURE:

In every department PEL has got several machines which are used in the production

ofvarious appliances and electrical equipment whose capacity is measured in term of the

output measures.

CAPACITY STRATEGIES

CAPACITY CUSHION

On the average each department has the capacity cushion which varies from 5% to 15%

ECONOMIES OF SCALEECONOMIES OF SCALE

PEL is trying to reduce its cost through enjoying the economies of scales in his processes.

Because of the purchasing in the bulk and using the activities as the measure of the

overhead charges PEL has been successful in reducing

The cost of materials

The cost struck in the processes

The cost in the overhead.

REASON FOR WINDING UP OF COMPRESSOR BUSINESS:

In case of compressors the company failed to get economies of scale that’s why they have

closed the manufacturing of compressor. MR.FARYAL the production engineer has told

me that to get the economies of scale or to cover the fixed expenses they must have to

produce 3,50,000 compressors, where as their internal consumption is 1,00,000

compressors, so they must have to sell 1,50,000 compressors ( 60 % ) in outside market.

But at out side their compressor’s demand is not as much as required. So as a result they

have closed their business of compressor.

BOTTLE NECK :BOTTLE NECK :


In the whole production process there are certain stages, which are more time consuming

than the others. So this limits the out put rate to a minimum level to that which was

expected.

In the process of the refrigerator manufacturing the bottleneck is created at the thermo

foaming machine.

FORCASTING

DEMAND FORECASTINGDEMAND FORECASTING

“A forecast is the prediction of future events used for the planning purposes”.

PEL is also using this technique for the purpose of the getting the idea of the demand.

The basic demand of power division is coming from the KESC and from eight divisions

of WAPDA. They are the major customers of the company. The other customers of the

company are those industries, which have their own power plants.

FORECASTING TECHNIQUES:FORECASTING TECHNIQUES:

There the three forecasting techniques are available for the purpose of the forecasting of

the demand, which are as under.

Judgmental Method.

Causal Method.

Time Series Method.

The usage of these techniques depends upon the availability of the data about the past.

PEL is the company on go.

FORECASTING AT PEL:

The forecasting technique, which is being followed by PEL is the qualitative technique.

JUDGEMENTAL METHODS :

The main reason for the selection of this method of the forecasting is that they do not

have the data for the past. The following are the methods, which they are utilizing for the

purpose of the demand estimation under the Judgmental Method.

SALES FORCE ESTIMATE


Sales force estimate of forecasts compiled by the members of the company’s sales force

(their dealers in each region) about the future demand of the product. They are using this

technique because they believe that their estimates are correct since the dealers are much

near to the market. MARKETING DEPATMENT is actually involved much in

forecasting. They observe the trend of the market and they set their target of sale then

they tell to the production that what is their target then production department make

productions according to the target set by marketing department.

Target set by the marketing department for this year up till JULY,31 is given below:

One more thing which is interesting is that demand of different colors of refrigerators is

different in different regions.

NAIVE METHOD

This is the simplest method of the forecasting. PEL gets their demand forecast by this

method with it. They see the previous year’s demand coming from the WAPDA, KESC

and the other new companies. Then if any change is coming in their demand that is also

being incorporated by them. The demand from the new industries is taken from the

sanctioning of the loans by the financial institutions.

MATERIAL MANAGEMENT

“ Material management is concerned about short range decisions about supplies,

inventories, production level, staffing patterns, schedules and distribution”.

Decisions in these areas affect the whole of the organization, either directly or indirectly.

IMPORTANCE OF THE MATERIALS MANAGEMENT:

Because the whole of the organization depends upon the materials so it is very important.

The other reason behind it is that if of short range so it desires more of the attention of the

management. It is important for the PEL also.

INVENTORY MANAGEMENT

“ Inventory is a stock of anything held to meet the future demand of organization”.

For an organization Inventory Management is very important process.

INVENTORY CONTROL SYSTEM


The computer program, monitoring chart, E.O.Q. System & ABC Analysis can give the

amount to be ordered to the supplier.

The next step is that when to reorder for the purpose of the production if the inventory the

inventory goes below the limit. PEL has not designed any specific system to control the

inventory but anyhow they are using the following two systems to control the inventory.

1.CONTINUOUS REVIEW SYSTEM

Whenever the number of the units is drawn out of the inventory stores they judge the

position of the inventory that whether it is a time to reorder or not. In this way the

inventory is controlled.

GM of store dept. makes continuous review, random checking is also done and their

computer system also maintains the record of inventory and inform then about the

position of the inventory.

2.PERIODIC REVIEW SYSTEM

The second method of inventory control system is periodic review system. In this system

the inventory position is judge periodically instead of continuously.

INVENTORY SYSTEM IN PEL

PEL are using the periodic review system. They make the review charts on quarter basis

and after three months they see that whether the inventory is with in the limits or not. But

they told that there are limited number of suppliers & company is having a very strong

relationship with them that’s why the lead time is just in HOURS therefore the system

they are using is very near to JIT system.

REORDER POINT:REORDER POINT:

Optimal replenish inventory system is used by PEL. In more technical terms the

minimum level serves as reorder point.

For managing the Inventory of different types, The Company divides the inventory into

two broad categories.

1. Raw material Inventory


2. Finished goods Inventory

MATERIAL REQUIREMENT PLANNING

As such company does not prepare any formal “material requirement plan”. Reason for

not preparing the plan is that the operations of the company are simple. In the Appliance

division, major operations involve the assembling of parts. When the benefits of the MRP

are compared against the cost and time for preparing the MRP, it is believed that the

operations are too simple to use any such plan.

However it doesn’t means that no planning is done for the raw material and components

material planning is done for the items that have no independent demand.

It is based on the following; three inputs, which the company is using.

B.O.M.

Production Schedule.

Inventory Records.

FLOW OF ACTIVITES

The flow of activities with respect to M.R.P. in the company.

ASP is prepared first followed by the production plan prepared by the Production Dept.

From here plan goes to the P & P. Dept.

In case if marketing Dept. suggests some changes in the design and specification of the

product, the requirements are mentioned to the Research and Development Dept. which

then work on the projects. Dept. identifies the items required and their quantity for single

product. From here the report goes to the P &P Dept., which after consulting Production

Dept. place orders.

QUALITY CONTROL:QUALITY CONTROL:

THE PROCESS OF QUALITYTHE PROCESS OF QUALITY

ISO has defined their quality standards. These standards are checked at every stage in

PEL. In PEL standards of quality in manuals indicating critical quality standards.

QUALITY DEPARTMENT

Its hierarchy of the quality control department is as follows:


RAW MATERIAL INSPECTION

When raw material is received the quality of raw material is inspected according to the

military standards MIL_STD_105E. According to these standards if the personnel of

receiving department will inspect according to the military standards. AQL4. If there is a

lot of 500 and they choose 13 sample from the whole lot then they select the sample from

the upper and lower and right and left side of the whole packet. It means that they select

the sample by way of diversifying the area. If the 2 units of the sample are rejected then

the whole lot will be rejected and if the lot is rejected then they call back the vendors and

vendor check that lot again. If the lot is very much needed by the production department

then they place a written request. The 100% inspection is done on it. In this case, they

call the vendors or their inspectors and they check it on 100% basis. But this happens in

very rare cases.

On the other hand if the lot is accepted then it is remarked as GRL (good received

lot) and sent to the store. While four copies of GRL are made and sent to the following

four departments:

Purchase department

Quality control department

To store

For computer entry

QUALITY CONTROL

PEL has also got certification for its two products. They have got this certification from

the Swedish firm and consultants “SGS”. They have got the 9002, which cover the area

from the production to after sale services. The following are the products for which have

gotten 9000 certification.

COMPRESSORS.

ENERGY METERS.

For the instrument transformers & refrigerator they are trying to get it.

QUALITY POLICY

The continuous improvement of all services through total

Involvement of all employees.


The developing and the strengthening of partnership with external and internal customers

and suppliers.

Providing innovative and higher quality products and services to achieve total customer

satisfaction by understanding their requirements and anticipating their future expectations

or needs.

AGGREGATE PLANNING

Aggregate planning is the projected statement of production rate, workforce level and

inventory holding based on estimates of customer requirements and capacity limitations.

This statement is time phased

Aggregate plan is based on Annual Sales Plan (ASP). On the basis of this plan, Annual

production plan (APP) is made. The production plan comprises the whole strategy for one

year regarding

Production rate

Workforce level

Inventory level

The production plan considers the monthly production pace by its operational production

sheet.

Departments of Production, Marketing, Planning and Procurements, and personal &

Administration and Finance Dept. all work with collaboration to make the plan.

LINKAGE TO OTHER PLANS

In PEL on the top of the planning is the business plan. This plan is a projected statement

or income, costs and profits for the next years Including statement of balance sheet,

income statement and cash flow, which shows the source and resources the company.

TRANSPORTATION MODE

PEL is mostly using the road as the transportation mode. If they are Supplying. Their

products inter city then the trucks are used. But if they are sending it to outstation then

they use large trucks to send them at the price. The reason for their selection of this mode

is that they have to supply to the Destination of the user or customer.


PRODUCTION DEPARTMENT PROCESS

The production department of PEL is manufacturing two finished products.

(1)Refrigerator

(2)Compressor

All the operations of the production department are taking place with the help of

machinery. In production department there are total 550 workers, which are subdivided

according to the sub-sections. The production takes places after the issuance of Annual

Sales Plan by Marketing Department. When the production department receives that plan

then the next step is to prepare a Annual Production Plan. This annual production plan is

then further divided into monthly plans that are called Operational Plans. The operational

plans further down filtered to the weekly plans, which ultimately result in the daily

production. On the average, the production of refrigerator is 250 per day with some

variation.

The refrigerator, called “PEL COOL” is specially designed to work most efficiently

under the extreme climatic conditions of Pakistan. The 313 components are required to

make a refrigerator. First of all the Research & Development technically develops a

single refrigerator that is manufactured in thousands by the production department in

different models and colors. All the specifications about machinery and product are

taken from the Engineering and R & d departments.

The production department is also manufacturing the high-tec compressors for

refrigerators and deep – freezers. It is the first such plant in Pakistan that is

manufacturing all types of compressors for refrigerators and for deep-freezers.

The production department of PEL has following sub-sections.

* Compressor Section * Dyes & Molding Section

* Press – Shop * Plastic Injection Molding

* Paint Section * Refrigerator Assembly Line


TRAINING PROGRAMME:

They have also trained their quality inspectors. They have a program to train the quality

inspector and classes are also held. But they have no proper academy. Different

organizations send their employees, which trained them.

ISO 9000

Why ISO is Required FOR PEL

Quality management system given by ISO 9000 acts as a support to achieve customer

satisfaction benefits of ISO 9000.

PEL competing against foreign competitor in the local market.

Raise company image.

A step toward total quality management.

Perceived commitment to quality.

PEL need it because we promote the slogan “ The quality conscious company”.

More united workforce through total employee participation.

ISO Certified Product

The certified product of PEL is Energy Meter. The productions of meters are started on

August 1994. In January 1997 it got the ISO 9002 certificates. After the certification the

complaint level of every meter dropped to less than 0.07%.

On the job training competency certificate is issued. The team assesses weather they learn

anything or not.

The backbone of this system corrective and prevention action.

All the workers are trained here for skilled jobs.

There are six section in the energy meters different supervisors are divided according to

the section.


Standard costing

Material Information: (PEL)

Purchased Quantitiy of material 50,000 Units

Standard Quantity for material 42,500 Units

Actual Quantity Used 45,000 Units

Actual Price per unit of material 12.00 Rs.

Standard Price per unit of material 13.00 Rs.

Labor Information:

Actual hours worked 15,000Hours

Standard hours allowed 16,250.00Hours

Standard rate per hour 15.00 Rs.

Actual rate per hour 12.00 Rs.

Variance Analysis

Direct Material Price Variance:

Rs. Remarks

Purchased Quantity X Actual Price

50,000 X 12.00 600,000

Purchased Quantity XStandard

Price

50,000 X 13.00 650,000

Variance -50,000 Favorable

Direct Material Quantity Variance:


Rs. Remarks

Actual Quantity used XStandard

Price

45,000 X 13 585,000

Standard Quantity XStandard

Price

42,500 X 13 552,500

Variance 32,500Un-favorable

Direct Labor Rate Variance:

Rs. Remarks

Acutal hours worked X Actual Rate

15,000 X 12 180,000

Acutal hours worked XStandard

Rate

15,000 X 15 225,000


Direct Labor Efficiency Variance:

Rs. Remarks

Acutal hours worked XStandard

Rate

15,000 X 15 225,000

Standard hours allowed XStandard

Rate 16,250 X 15 243,750


Standard costing is defined as – “the preparation and use of Standard Costs, their

comparison with actual costs and the analysis of variance as to their causes and point

of incidence.

ICWA London had defined Standard Costing as – “the preparation of Standard Costs

and applying them to measure the variations of actual costs from standard costs and

analyzing the causes of variations with a view to maintain maximum efficiency in

production”.


Material Variances:

Material Cost Variance [MCV]

It is the difference between the standard cost of material specified for the

output achieved and the actual cost of direct material used. It is said to be

favourable when standard cost is more than actual cost and adverse when

actual cost exceeds standard costs. It is further divided into Material Usage

Variance and Material Price Variance.

MCV = SC – AC

= (SQ x SP) – (AQ x AP)

Material Usage Variance [MUV]

It is that portion of the Material Cost Variance which is due to the difference

between the Standard Quantity specified for the actual output and the Actual

Quantity used for the actual output. It is said to be favourable when standard

quantity is more than actual quantity and adverse when actual quantity

exceeds standard quantity.

MUV = (SQ – AQ) x SP

Material Price Variance [MPV]

It is that portion of the Material Cost Variance which is due to the difference

between the Standard Price specified for the Actual Output and the Actual

Price paid. Material Price Variance is said to be favourable when the actual

price is less than the standard price and adverse when the actual price is more

than the standard price.

MPV = (SP – AP) x AQ

Verification

Material Cost Variance = Material Usage Variance + Material Price Variance

i.e. MCV = MUV + MPV

Labour Variances:

Labour Cost Variance [LCV]

It is the difference between the standard cost of labour specified for the output

achieved and the actual cost of direct labour used. It is said to be favourable

when standard cost is more than actual cost and adverse when actual cost


exceeds standard costs. It is further divided into Labour Efficiency Variance

and Labour Rate Variance.

LCV = SC – AC

= (SH x SR) – (AH x AR)

Labour Efficiency Variance [LEV]

It is that portion of the Labour Cost Variance which is due to the difference

between the Standard Hours specified for the actual output and the Actual

Hours used for the actual output. It is said to be favourable when standard

hour is more than actual hour and adverse when actual hour exceeds standard

hour.

LEV = (SH – AH) x SR

Labour Rate Variance [LRV]

It is that portion of the Labour Cost Variance which is due to the difference

between the Standard Rate specified for the Actual Output and the Actual

Rate paid. Labour Rate Variance is said to be favourable when the actual rate

is less than the standard rate and adverse when the actual rate is more than the

standard rate.

LRV = (SR – AR) x AH

Verification

Labour Cost Variance = Labour Efficiency Variance + Labour Rate Variance

i.e. LCV = LEV + LRV

CONCLUSION & SUGGESTIONS

If we conclude this report of costing system of refrigeration industry, we come to know

the following relevant points which needs the attention of the management of the

company while performing the functions of the operations.

NO PROPER INVENTORY

The organization does not have proper inventory planning by the management due to

which heavy amount of the money is being put by the company in the inventory.

PEL has the strength also that it has a good repute for the company as being the quality

conscious company. It has own experts for the purpose of the control of the quality of


products. Due to the good sight selection for the purpose of the power division the

company has more access to the whole of the markets of the country. The company also

has well established system of the distribution of the company although it is not the

integrated one but it is working smoothly.

JUDGMENTAL METHODS

The management of this company does not use the sophisticated technique while making

or performing the function of the demand forecasting by the company. They rely more on

the judgmental methods for the purpose of the projection by the company about their

sales.

The following are the suggestions being provided by me after visiting of the company.

PROPER INVENTORY LEVEL.

The company should also make some of the methods for the purpose of the keeping the

inventory at the optimal level. Proper planning of the material can decrease the amount of

the investment in the inventories by the company.

USE SOPHISTICATED TECHNIQUES OF FORECASTING.

The company is an excellent company and it has good image in the mind of the

consumers. But they are not applying the statistical tools for the purpose of the forecast

of sales which eventually results into having the excessive amounts of inventory by the

company. Causal and the time series methods are the good estimate provider about the

forecasting and if the management adopted these forecasting techniques no doubt they

will be benefiting the company a lot.

Labor & F.O.H. rate applied periodically, it would be a great idea if PEL try it by

calculating per job cost individually. We know its difficult to measure but it would be

very useful of calculation the actual cost for the maximum efficiency level.

Bibliography Syed Manzar Hassan

C.F.O.

Pak Elektron Ltd (PEL)


S.M.Amir

Manager Costing

Pak Elektron Ltd (PEL)

Chaudhry Khurshid Aziz

Chairman

Pakistan Electrical Manufacturers Association

2-C LDA Flats

Lawrence Road

Lahore, Pakistan

Tel: 92-42-6301144 and 6313675

FAX: 92-2-6310196

Mr. Haider Ali Sheikh

Partner

White House

4 Abid Market, Mozang Chungi

Lahore, Pakistan

Tel: 92-42-6360592 and 6361538

FAX: 92-42-6304656

www.scribd.com

www.lcci.org.pk

www. pel .com.pk

www. orient -power.com

www.google.com

Annexure


http://www.google.com/

http://www.orient-power.com/

http://www.pel.com.pk/

http://www.lcci.org.pk/

http://www.scribd.com/

Documents

Costing System in batch production (PEL)