1st project of mine. hypothetical example

1. www
ACCOUNTANCY
PROJECT WORK [2017-2018]
Submitted By: Mr. Nawal Kishor Shah Lecturer: Mr. Deewas Devkota
Program: BBA (1st SEM) Coordinator:Mr. KishorBasnet
Assignment:First (1st) Supervisor:Mr. Deewas Devkota
Course:Introduction to Accounting

2. ACKNOWLEDGEMENTS
How does a person say “thank you” when there are so many people
to thank? Obviously this project is thanks to my entire friend and family
who helped me during my project directly and indirectly.
The person most responsible for this project becoming reality is our
teacher Mr. Deewas Devkota—lecturer of account subject, supervisor
and guider. His efforts make my project complete.
Nawal Kishor Shah
(BBA 1ST SEMESTER)

3. Preface
This projecthas been designed on the topic of “Cost classification on
production” with the motive of providing adequate information on cost of
producing goods by manufacturing company. I havetried my best in this project
to reflect classification of cost. The basic objective behind this projectis to get
knowledgeof costoccurred in the courseof production
In this projectreport I haveincluded various costincurred in
manufacturing under different head and sub-head.
This projecthas also given me opportunities to know more about cost of
production. On the whole, it was a great enthusiasmand full supportiveto work
under this project. Any valuable feedbacks and suggestion are highly welcome.
Nawal Kishor Shah
(BBA 1ST
SEMESTER)

4. Contents
Introduction to Cost Accounting……………………..………………………………….01
Introduction of manufacturing company……………………………………………02
General introductionof company ……....1
Competitionof product ……………………….2
Coca-colainNepal ……………………………….3
Cooperate social responsibility…………….4
Environmental policy……………………………5
Cost cutting…………………………………………6
Cost classification of producing Coca-Cola………………………………………………………….04

5. Introduction to Cost Accounting
Cost accounting is the process of collecting, analyzing, summarizing
and evaluating the cost incurred in the process production of goods.
Cost accounting provides the detailed cost information that
management need to control current operations and plans for future.
The aim of maintaining cost accounting is to provide better
understanding on classification of cost for reducing cost on production
and to increase profit. Cost Accounting is the process of accounting for
cost which begins with recording of income and expenditure and ends
with the preparation of statistical data. It is the formal mechanism by
means of which cost of products or services are ascertained and
controlled.
Cost Accounting may be defined as “Accounting for costs classification
and analysis of expenditure as will enable the total cost of any
particular unit of production to be ascertained with reasonable degree
of accuracy and at the same time to disclose exactly how such total cost
is constituted”.
It establishes budgets and standard costs and actual cost of
operations, processes, departments or products and the analysis of
variances, profitability and social use of funds.
Thus Cost Accounting is a quantitative method that collects, classifies,
summarizes and interprets Information for product costing, operation
planning and control and decision making

6. pg. 1
Introduction of manufacturing company
1) The Coca-Cola Company is the mostpopular company in the world with
a huge numbers of products. Itproducecarbonated softdrink which named as
coca cola as its main product. The color of cocacola is caramel E150d. John
Pemberton is the person who invented coca cola in late 19th century (May 8,
1886; 131 years ago). John Pemberton sold the right of copy to Asa Griggs
Candler. Asa Griggs Candler made the product popular in global market. The
marketing strategy created by Asa Griggs Candler made the coca cola one most
demanding and global recognized product. The name of productreflects its two
main ingredients. Coca means ‘kola nuts’ and cola means ‘cocaleaves’. The
compositions of coca cola remain secret. They are Caffeine-Free Coca-Cola, Diet
Coke Caffeine-Free, Coca-Cola Cherry, Coca-Cola Zero, Coca-Cola Vanilla, and
special versions with lemon and lime.
2) Coca-cola is one of the most respected brands in the world and it has
long warded off the competition with the use of a strong distribution strategy and
equally strong marketing messages. Coca-cola has over a period of time used
positive marketing to the best of its advantageand has rarely been involved in
negative marketing. The other direct competition products arePepsi, RC Cola,
IncaKola, Kola Real, Cavan Cola, Postobón and Afri-Cola. The other indirect
competition products areRed Bull, Gatorade, Dr Pepper (Dr Pepper Snapple),
Lipton, Nescafe, Tropicana.
3) Coca Cola was firstintroduced in 1973, it was imported from India. Coca
Cola is produceby Bottlers Nepal in Nepal. Itis second largest industry in Nepal. It
is situated in Bharatpur, Chitwan. The Coca Cola produceby this industry are not
sold in hilly region (charikot& jiri) of Bagmati Zoneand Janakpur Zone. They are
sold in other 13 Zone. Coca Cola was firstintroduced in 1973, Itwas imported
fromIndia.

7. pg. 2
4) The main objective of the CSR programis Sustainability. This is
expressed through the actions of the company in the following areas: consumer
health, packaging and recycling, water stewardship, employeedevelopment,
involvement of suppliers and energy and climate. Regarding of Consumer Health,
the company wants to meet the modern life trends of consumers. For this reason
it has broadened the productportfolio with products that are not fattening and it
has reduced the amountof calories in its beverages by 88% according to school
beverage guidelines. Ithas also supported Michelle Obama's campaign ("Let's
Move") with the initiative Clear on Calories.
5) According to Coca-Cola is committed to conducting all its business
activities responsibly, with due regard to environmentalimpact and sustainable
performance. We believe that the environmentis everybody's responsibility and
all employees are accountable for environmentalperformance.
6) Coca-Cola cutting costs through job reductions. The Coca-Cola
Company has more than 150,000 employees. Sugar and corn arethe two main
ingredients used by The Coca-Cola Company to produceCoca-Cola. Selling some
of its bottling operations and factories also reduce cost. Sugar prices have been
the dominating factor in cost. Corn prices have been another major factor.

8. pg. 3
Cost classification of producing Coca-Cola
 Prime cost: - Prime cost is the direct cost of a commodity in terms of the
materials and labor involved in its production, excluding fixed costs. The
prime cost of coca-cola company is material required and labor required for
producing Coca-Cola. The sub-head are:-
 Material
 Labor
Material: - The material required for production of Coca-Cola is Caramel color
(E150d), Sugar [high-fructosecorn syrup (HFCS)],and Caffeine, Phosphoric acid,
Phosphoric acid and Natural flavorings.
A typical can of Coca-Cola (12 fl ounces/355 ml) contains 38 grams of sugar
(Usually in the formof HFCS), 50 mg of sodium, 0 grams fat, 0 grams potassium,
And 140 calories. On May 5, 2014, Coca-Cola said it is working to remove a
controversialingredient, brominates vegetable oil, fromall of its drinks.
Labor: - The costof labor is the sumof all wages paid to employees, as well as the
cost of employee benefits and payroll given to employees. Labor costs can be
specifically attributed to a particular unit produced. Labor used in mixing indigent
by Coca-Cola Company is the example of direct labor.
 Factory Cost/ Work Cost: - Itinvolves a company's factory operations. It
includes the costs incurred in the factory other than the costs of direct
materials and direct labor.
Factory overhead: - Itis the total cost involved in operating all production
facilities of a manufacturing business thatcannot be traced directly to a
product.Factory overhead costs are found on and off the production floor.
For example, factory lighting and heating, factory rent, power and
electricity, factory insurance, deprecation on machinery, repair, lubricants,

9. nuts and bolts, cleaning material are the factory overhead of Coca-Cola
Company. Itdoes not include your direct materials and direct labor costs.
pg. 9