1. INTRODUCTION: Natural fibers cotton, flax, silk, and wool represent the major fibers available to ancient civilizations.

The earliest known samples of yarn and fabric of any kind were found near Switzerland, where bundles of flax fibers and yarns and fragments of plain-weave linen fabric, were estimated to be about 7,000 years old. Cotton has also been cultivated and used to make fabrics for at least 7,000 years. It may have existed in Egypt as early as 12,000 B.C. Fragments of cotton fabrics have been found by archeologists in Mexico (from 3500 B.C. )., in India (3000 B.C. ), in Peru (2500 B.C. ), and in the southwestern United States (500 B.C. ). Cotton did not achieve commercial importance in Europe until after the colonization of the New World. Silk culture remained a specialty of the Chinese from its beginnings (2600 B.C.) until the sixth century, when silkworms were first raised in the Byzantine Empire. Synthetic fibers did not appear until much later. The first synthetic, rayon, made from cotton or wood fibers, was developed in 1891, but not commercially produced until 1911. Almost a half a century later, nylon was invented, followed by the various forms of polyester. Synthetic fibers reduced the world demand for natural fibers and expanded applications. Until about 1300, yarn was spun on the spindle and whorl. A spindle is a rounded stick with tapered ends to which the fibers are attached and twisted; a whorl is a weight attached to the spindle that acts as a flywheel to keep the spindle rotating. The fibers were pulled by hand from a bundle of carded fibers tied to a stick called a distaff. In hand carding, fibers are placed between two boards covered with leather, through which protrude fine wire hooks that catch the fibers as one board is pulled gently across the other.
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The spindle, which hangs from the fibers, twists the fibers as it rotates downward, and spins a length of yarn as it pulls away from the fiber bundle. When the spindle reaches the floor, the spinner winds the yarn around the spindle to secure it and then starts the process again. This is continued until all of the fiber is spun or until the spindle is full. A major improvement was the spinning wheel, invented in India between 500 and 1000 A.D. and first used in Europe during the middle Ages. A horizontally mounted spindle is connected to a large, hand-driven wheel by a circular band. The distaff is mounted at one end of the spinning wheel and the fiber is fed by hand to the spindle, which turns as the wheel turns. A component called the flyer twists the thread just before it is wound on a bobbin. The spindle and bobbin are attached to the wheel by separate parts, so that the bobbin turns more slowly than does the spindle. Thus, thread can be twisted and wound at the same time. About 150 years later, the Saxon wheel was introduced. Operated by a foot pedal, the Saxon wheel allowed both hands the freedom to work the fibers. 1.2 Yarn Yarn consists of several strands of material twisted together. Each strand is in turn, made of fibers, all shorter than the piece of yarn that they form. These short fibers are spun into longer filaments to make the yarn. Long continuous strands may only require additional twisting to make them into yarns. Sometimes they are put through an additional process called texturing. The characteristics of spun yarn depend, in part, on the amount of twist given to the fibers during spinning. A fairly high degree of twist produces strong yarn; a

low twist produces softer, more lustrous yarn; and a very tight twist produces crepe yarn. Yarns are also classified by their number of parts. A single yarn is made from a group of filament or staple fibers twisted together. Ply yarns are made by twisting two or more single yarns. Cord yarns are made by twisting together two or more ply yarns.

1.3 Raw Materials About 15 different types of fibers are used to make yarn. These fibers fall into two categories, natural and synthetic. Natural fibers are those that are obtained from a plant or an animal and are mainly used in weaving textiles. The most abundant and commonly used plant fiber is cotton, gathered from the cotton boil or seed pod when it is mature. Fibers taken from the plant leaf or stern are generally used for rope. Other plant fibers include acetate (made from wood pulp or cotton linters) and linen, made from flax, a vegetable fiber. Animal fibers include wool, made from sheep hair, and mohair, made from angora goats and rabbits. Silk is a protein extruded in long, continuous strands by the silkworm as it weaves its cocoon. Synthetic fibers are made by forcing a thick solution of polymerized chemicals through spinneret nozzles and hardening the resulting filament in a chemical bath. These include acrylic, nylon, polyester, polyolefin, rayon, spandex, and triacetate. Some of these fibers have similar characteristics to the natural fibers without the shrinkage problems. Other fibers have special properties for specific applications. For instance, spandex can be stretched over 500% without breaking

Fibers are shipped in bales, which are opened by hand or machine. The picker loosens and separates the lumps of fiber and also cleans the fiber if necessary. The carding machine separates the fibers and pulls them into somewhat parallel form. The thin web of fibers formed then passes through a funnel-shaped device that produces a ropelike strand of parallel fibers. Rollers elongate the strand, called a sliver, into a single more uniform strand that is given a small amount of twist and fed into large cans.

1.4 The Manufacturing Process There are three major spinning processes: cotton, worsted or long-staple, or wool. Synthetic staple fibers can be made with any of these processes. Since more yarn is produced with the cotton process than the other two, its manufacture is described below. Preparing the fibers

Fibers are shipped in bales, which are opened by hand or machine. Natural fibers may require cleaning, whereas synthetic fibers only require separating. The picker loosens and separates the lumps of fiber and also cleans the fiber if necessary. Blending of different staple fibers may be required for certain applications. Blending may be done during formation of the lap, during carding, or during drawing out. Quantities of each fiber are measured carefully and their proportions are consistently maintained.

Carding

The carding machine is set with hundreds of fine wires that separate the fibers and pull them into somewhat parallel form. A thin web of fiber is formed, and as it moves along, it passes through a funnel-shaped device that produces a ropelike strand of parallel fibers. Blending can take place by joining laps of different fibers.

Combing

When a smoother, finer yarn is required, fibers are subjected to a further paralleling method. A comb like device arranges fibers into parallel form, with short fibers falling out of the strand.

Drawing out

After carding or combing, the fiber mass is referred to as the sliver. Several slivers are combined before this process. A series of rollers rotating at different rates of speed elongate the sliver into a single more uniform strand that is given a small amount of twist and fed into large cans. Carded slivers are drawn twice after carding. Combed slivers are drawn once before combing and twice more after combing.

Twisting

The sliver is fed through a machine called the roving frame, where the strands of fiber are further elongated and given additional twist. These strands are called the roving.

Spinning The predominant commercial systems of yarn formation are ring spinning and open-end spinning. In ring spinning, the roving is fed from the spool through rollers. These rollers elongate the roving, which passes through the eyelet, moving down The sliver is fed through a machine called the roving frame, where the strands of fiber are further elongated and given additional twist. The predominant commercial systems of yarn formation are ring spinning and open-end spinning. Open-end spinning omits the roving step. and through the traveler. The traveler moves freely around the stationary ring at 4,000 to 12,000 revolutions per minute. The spindle turns the bobbin at a constant speed. This turning of the bobbin and the movement of the traveler twists and winds the yarn in one operation.

Open-end spinning omits the roving step. Instead, a sliver of fibers is fed into the spinner by a stream of air. The sliver is delivered to a rotary beater that separates the fibers into a thin stream that is carried into the rotor by a current of air through a tube or duct and is deposited in a V-shaped groove along the sides of the rotor. As the rotor turns, twist is produced. A constant stream of new fibers enters the rotor, is distributed in the groove, and is removed at the end of the formed yarn.

1.5 TEXTILE INDUSTRY Back in the 18th century the textile was generally based on processing wool. The wool, as it has already been mentioned, was processed industry

wool, which was processed individually by individual artisans. Their work was home-based and they had their own individual premises at home to do the spinning and the weaving of the wool in order to process it. Ordinarily, house like this were called weavers cottages. Great Britain was the first to start the revolution in the sphere of textile industry due to the fact that it had lost of raw materials obtained from its countless colonies. The wool processing took much time and a lot of wool became very hard to handle. Basically, the textile industry was the main industry for many countries in the 18th century.

1.6 Origin of textile industry: The individual artisans used handlooms and spinning wheels as the primary tools for processing textiles. The handloom was originally a Roman invention that was used to cope produce yarn with interlaced threads this was the way artisan-workers obtained cloth some of which afterwards was converted into clothes and some remained cloth and was stored. The process of obtaining yard was very difficult as the worker had to size the yarn, dry it, and beam it in the handloom. Usually the cloths needed to be bleached, so the artisans soaked it in lactic acid and then dried in the open sun. So generally it took almost eight month before the cloth was completely ready. The processes of weaving, spinning and carding took a lot of precious time and were not that profitable for the workers, but their only way for their
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families to survive. Artisans had difficulties in making the cloth different from what they usually did, especially when they were asked for a wider cloth, because it meant that more than two people had to be at the handloom for a long time in order to achieve this result. Some textiles were dirty at the moment when they were to be processed so therefore they were cleaned. The technology of cleaning the textiles from dirt before the industrialization period was called willowing. So the members of the artisans family had to clean the textiles by hand which was very exhausting and took quite a long time.

The spinning of the textile was made with the help of a stick that was nearly 3 feet long. The person doing it had to be really skillful as he was supposed to hold the stick under his left arm and the forefinger and the thumb of his right hand neatly twisted the wool fibers obtained from the stick. Then the thread got on a spindle.

Basically, the whole process of getting cloth can be presented as a scheme:

Carding: Children did the carding. They were supposed to remove the short fibers with the help of a hand-card. A hand-card was a wooden block with small handles and had spikes made from metal its surface. Spinning: Was usually made by a woman and it was a process of converting cardings to yarn with the help of a spinning wheel. Weaving: With the help of a handloom the yarn was made into cloth.

This work was conducted by a man and concluded the whole procedure of processing the textiles. It is common knowledge now that he 18th century domestic system did not provide any solutions in dealing with wool, cotton, silk and flax, as these were the most used materials back then . Weaving, spinning and carding were the only options of conversion of the textiles into different goods. Being the heart of the textile industry, Great Britain was very much interested in the export of woolen goods and as the result needed a fast and high-quality production of these goods, which individual production could not give by any means.

1.7 Changes in management and textile industry:

The changes that took place within the textile industry are enormous. The Industrial Revolution produced the result the industry was so much expecting a greater amount of fabric was produced in less time at a lower cost. Of course it meant more money for the countries but at the same time factories required millions of workers in order to constantly increase the productivity and therefore the profit. The major minus and may be the most visible sign of lack of professionalism of the factory management was that they strived for having the more the workers the better not taking

into account various factors, such as the conditions of work, the age requirements and contraindications and the sometimes even the decline of quality due to a non-rational exploitation of the machinery. Though the profits from the factories were huge people got tiny wages and sometimes were almost starving. of This the is what textile concerns the management factories.

Nevertheless, the new machinery used showed outstanding results. It completely changed the technology of textile manufacturing making it more qualified and professional.

The industry was changed inside out. The new level of productivity brought its fruits. New quality textiles were improved and something new was added in the process of work. Of course they did have disadvantages such as the danger of the industry, nevertheless clothes became more available and yarn became very cheap and affordable. The new technology saved time and money making a huge step in the technical progress of the worldshistory. The Industrial revolution converted the domestic textile system into the factory system, which factions faster and better. The textile processing was not made by hand anymore. This separated humanity from the primitive existence. Before the Industrial Revolution people had to work at home, dedicating all their time to the textile manufacturing through weaving, spinning and carding. The
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Industrial Revolution brought new inventions that absolutely changed the situation. Workers had a working place, did not have no work at home anymore and the manufacturing became faster. The textile industry provided a strong base for the economy. 1.8 Textile Industry in India: The textile industry occupies a unique place in our country. One of the earliest to come into existence in India, it accounts for 14% of the total Industrial production, contributes to nearly 30% of the total exports and is the second largest employment generator after agriculture.

Textile Industry is providing one of the most basic needs of people and the holds importance; maintaining sustained growth for improving quality of life. It has a unique position as a self-reliant industry, from the production of raw materials to the delivery of finished products, with substantial value-addition at each stage of processing; it is a major contribution to the countrys economy.

Indian textile industry has the highest loom age including handlooms in the world. It contributes about 61% to the world

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loom age. It also contributes about 12% to the world production of textile fibers and yarns including jute. It is the largest producer of jute, second largest producer of silk, third largest producer of cotton and cellulosic fiber/yarn and fifth largest producer of synthetic fibers/yarns.
Financial Year-wise, Variety-wise Production of Yarn (Qty. in Million Kgs.) Financial Year . Qty. Cotton Yarn Growth rate Blended Yarn % Growth Qty. Share rate 75% 77% 74% 72% 72% 72% 71% 71% 69% 70% 73% 74% 74% 74% 74% 74% 395 14% 484 22% 583 20% 595 2% 621 4% 644 4% 609 -5% 584 -4% 589 1% 585 -1% 588 1% 635 8% 677 7% 655 -3% 170 6% 161 -5% 100% Non Cotton Yarn % % Qty. Growth rate . Share Share 17% 17% 20% 21% 20% 20% 20% 19% 19% 18% 17% 17% 17% 17% 17% 16% 195 23% 162 -17% 178 10% 191 7% 221 16% 246 11% 280 14% 319 14% 342 7% 366 7% 349 -5% 355 2% 378 6% 361 -5% 90 96 -3% 7% 8% 6% 6% 7% 7% 8% 9% 10% 11% 11% 10% 9% 9% 9% 9% 10% 2378 2794 2973 2808 3046 3158 3101 3080 3052 3223 3458 3813 4003 3914 1014 1001 Total Qty. . 14% 17% 6% -6% 8% 4% -2% -1% -1% 6% 7% 10% 5% -2% 3% -1% Growth rate

1995-1996 1788 13% 1996-1997 2148 20% 1997-1998 2213 3% 1998-1999 2022 -9% 1999-2000 2204 9% 2000-2001 2268 3% 2001-2002 2212 -2% 2002-2003 2177 -2% 2003-2004 2121 -3% 2004-2005 2272 7% 2005-2006 2521 11% 2006-2007 2824 12% 2007-2008 2948 4% 2008-2009 2899 -2% 2008-2009 754 4% 2009-2010 743 -1% (Apr-Jan)

Source: Ministry of Textiles, Government of India.

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1.9 BACKGROUND INFORMATION The textile industry plays a pivotal role in the Indian economy. The country has produced legends such as Dhaka muslin, which was woven so fine and light that it could pass through a finger ring. But what is significant today is that this sector contributes substantially in providing employment and earning foreign exchange. The country is rich in natural resources such as cotton, jute and silk. The textile industry is the second largest employer, after agriculture, with a total workforce of around 35 million. India is next only to China among the world's largest producers of textiles and garments. The industry is the largest foreign exchange earner, as the import content is insignificant compared with those of other major export products. Its contribution in exports is nearly 20 per cent. How many of us know that 85 per cent of the handlooms in the world are produced in India? The number of handlooms in the country is four million. The activities in textiles range from the production of natural raw materials such as cotton, jute, silk and wool to the manufacture of quality products such as cellulose fibre, synthetic filament and spun yarn. This is, perhaps, the only industry that is self-reliant and complete in value addition from raw materials to the highest value-added products.

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The textile industry occupies a unique place in our country. One of the earliest to come into existence in India, it accounts for 14% of the total Industrial production, contributes to nearly 30% of the total exports and is the second largest employment generator after agriculture. Textile Industry is providing one of the most basic needs of people and the holds importance; maintaining sustained growth for improving quality of life. It has a unique position as a self-reliant industry, from the production of raw materials to the delivery of finished products, with substantial value-addition at each stage of processing; it is a major contribution to the country's economy. Its vast potential for creation of employment opportunities in the agricultural, industrial, organized and decentralized sectors & rural and urban areas, particularly for women and the disadvantaged is noteworthy

Against all these merits, an experts lament goes: "It is difficult to find such a large-scale industry in the country that is so disorganized as the Indian textile industry". The industry is often plagued by obsolescence, unhealthy regulations and problems of lab our. This emphasizes the need for strengthening the management mechanism in the industry, to face the emerging international challenges. Common sense administration has its in-built constraints in a

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world where scientific management decides the destiny of industries in the modern global scenario. The textile industry in India will face intensified competition in both their export and domestic markets. However, the migration of textile capacity will be influenced by objective competitive factors and will be hampered by the presence of distorting countries The challenges from global competition demand a scientific approach from properly trained management professionals who have specialised in this sector. Sickness and inter-sector contradictions that are a bane of the industry have to be solved through a wise approach and well-calibrated steps, to ensure healthy growth. Managers who are trained in traditional management disciplines will take a long time to get themselves familiarized with the special problems of the textile scene. A strong and competent cadre of trained mangers will help the continuous upgrading of knowledge and skills, fulfilling the need for maintaining a cutting edge in the world of intense competition. domestic measures and weak domestic infrastructure in several developing and least developed

The Future:

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Spinning systems and yarn manufacturing machinery will continue to become more automated and will be integrated as part of a manufacturing unit rather than as a separate process. Spinning machines have already been developed that combine carding and drawing functions. Production rates will increase by orders of magnitude as machines become available with even more spindles. Robot-controlled equipment will become standard. Domestic yarn producers will continue to be threatened by competition from other countries, as these continue to buy the latest textile machinery technology. Higher domestic material prices will not help, since the cost of the raw material can represent up to 63% of the total cost of producing the yarn. Indian yarn producers will continue to form alliances with their customers and customers' customers to remain competitive. The textile industry is also forming unique partnerships. The Indian Textile Partnership is a collaborative research and development program among industry, Government, and academia aimed at strengthening the competitiveness of the industry. Yarn producers will have to incorporate pollution prevention measures to meet the air and water quality restrictions. Equipment manufacturers will continue to play an important role in this endeavor.

1.10 Chapter scheme: I. II. Deals with the introduction. Profile of Janaki Cotton Mills limited and objectives.

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III.

Research Methodology , Scope of the study & Theoretical view of Budgetary Control and Linear trend.

IV. V.

Analysis and Interpretations. Deals with Findings and Conclusion

2. (A) COMPANY PROFILE

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Janaki cotton mills limited has been started at the year of 1991. It is located at Tirunelveli district on the way to Kannyakumari just 5 Km from Vallioor. The total area of this mills premise is 10 Acres. 70% of the area is utilized for the machinery building. Remaining areas are utilized for plantation of trees. Trees like teak, mango, neem, coconut etc are well maintained. The organization is giving more importance for environment protection. The company commenced commercial production of yarn in 1994. 2. 1. Management:

The company is manged by professional and skilled workers under the leadership of Mr.Sudalaimuthu - Managing Director, other directors are Mr.S.S.Muthu(whole time Director), Mr.A. Swaminathan, Mr.A.Navaneetha Krishnan, Mr.Adam, Mr.S.Sakkaraiappan, Mr.C.Jeyaraj, Mr.S.Nambirajan and Mrs.S.Muthulakshmi. In 2008 the mill was certified by ISO 9001:2008 for the quality Management system in supply and Manufacturing of Yarn producing. The management improved its turnover and profitability over the year remarkably and all its borrowing accounts have been regular.

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JANAKI COTTON MILLS LIMITED

ORGANISATION CHART MANAGING DIRECTOR CEO _____________________________________________________ PURCHASE PRODUCTION ADMINISTRATIVE ACCOUNT MANAGER MANAGER MANAGER MANAGER EXECUTIVE QUALITY&LAB TEST OFFICE EXECUTIVE ACCOUNTS (Purchase and sales) EXECUTIVE _______________________________ OPERATORS SUPERVISIONS (Manufacturing, packaging, dispatching) (Maintenance, electrical & Mechanical)

In 1993 the mill has started with 2600 spindles. In the early stage the yarn

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produced was used for bet sheet and towels. The count of yarn spun were 20s,30s,2/20s, NE. The number of labours employed was 50.

In 1997 the mill was expanded the spindles with 2900 and the total spindles was 5500. The count of yarn spun were 20s, 30s, 40s,2/20s,NE.. The quality of yarn was improved from weft to warp. The number of labours employed was 110.

In 2000 the mill was expanded the spindles with 6500 and the total spindle was 12,000. The counts of yarn spun were 20s,30s,40s,NE. The quality of yarn was improved from weft to warp to hosiery. The management gave most importance for quality .

In 2003 the mill has expanded the spindles up to 12,000 with latest machineries imported from foreign countries. The counts of yarn spun were 20s,30s,40s,52s,NE. to hosiery. The turnover of the company was around Rs.12,00,00,000 per Annum. The quality of yarn was improved from warp

In 2006 the mill has expanded the spindles up to 15,000 with latest machineries from leading machineries manufacturers.

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1. Rieter Draw Frame model D35 from M/s Rieter Machine Works, Germany. 2. Lakshmi Ring Frame Model LR6/S from M/s Lakshmi Machine Works Ltd., Coimbatore. 3. Muratec Automatic winding machine from Murata Machinery Limited. 4. Sehalforst - Autoconer 338 Machine imported from Germany. Recently the mill has installed another one fully automatic winding No.21C process coner manufactured by Murata Machinery, Japan. The cost of this machine is around Rs.1, 10, 00,000/-. Now 50% the production of yarn to exported in foreign countries. The turnover of the company was around Rs.15crores. The number of labours employed was 180. 2.2. Source of Material: The raw material required for this industry is quality cotton with a staple length of about 29mm and above and fiber fineness of 3 to 5 micro grams per inch, with 2 to 4 percent of trash. The company uses RG-34, MCU-5, MECH-1, DCE-32, SANKAR-4 varieties of cotton. Cotton is available in abundance in Punjab, Maharashtra, Andhra Pradesh, Gujarat, Karnataka and Tamil Nadu. From inter stages only 10% of cotton are consumed and 75% of cotton from the up countries and balance from abroad particularly in West Africa.

World's No: 1 Cotton producer is China and India ranked 2nd place
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and next comes America and Africa. Egypt is producing super fine quality cotton. The company adopts a prudent policy of cotton procurement and resorts to purchase from several states. The managing Director is well trained and experienced in selection of good quality cotton and entering into foreign contracts. He is well connected with reputed suppliers of local and up country cotton. Hence no problem is envisaged in purchasing quality cotton at optimum prices. As the raw material is easily available, entering into long term arrangements for supply of cotton isn't warranted.

2. 3 Quality Control Software: Here the software used is for estimating the linear density is (Number) strength of yarn samples (Thread). The length of sample yarn is 120 yards. The sample is wound in Wrap Reel removed and placed on the Electronic scale. The software automatically accounts the weight. The sample is placed on the strength tester. Here the treads are broken and the strength at the time of break is accounted by the software with this weight and strength count and CSP(count, strength product) of yarn is estimated.

2.4. Other Sources:

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 Power: The mill is presently with a high 1100 v tension power connection. The total sanctioned load is 1200 KVA. The prudent availed load is 1000 KVA. The mill has total capacity of 800 KVA. Two Generators of capacities 125 KVA and 350 KVA are existing. Water: Water requirement for this unit is very limited. There exist 3" Bore wells and 4.5" Bore wells with copious supply of water, inside the mill premises. No water problem is envisaged. Transport: The mill is situated on the Tirunelveli District. On the way of Kannyakumari National highway (NH7). The transportation facilities are very favorable to the mill. Labour Profile: The mill is situated at parkland village, which is surrounded by many villages via, Kalandhapanai, Paaraydi village, South valliyoor, viswasapuram,Rosmiyapuram, Pampankulam, kumarapuram, Kallikulam.where from the unit can get labours. Periodical training programmers are being conducted to train the work men. Quality circles are functioning to achieve involvement and work culture

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among the workmen. Labours employed in mills are skilled and semi - skilled. Qualifications needed for semi -skilled worker area 8th STD. For skilled worker they have to gone through ITI or Diploma course. Payroll: Payroll is a software consists of Bio-data of labours, wages earned, PF deducted etc. Payroll is used for maintenance of details of labours, working in the mills. Attendance: All labours given one token with code number. Every labour entering the gate is putting their token in a particular box. After it should record the attendance register, The token is returned to the labours when they are going out at the end of shift. Working hours: The weekly working hours of the industry are fixed on shift basis. There are 3 shifts per day. Each shift consists of 8 hour as 1st shift - 08.00 am to 04.30 pm

2nd shift - 04.30 pm to 12.30 pm 3rd shift - 12.30 pm to 08.00 am

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It is applicable for laborers. The officer and executive have working time from 9 am to 1 pm and 2 pm to 5.30 pm. They have lunch break between 1 pm to 2 pm. Every year in addition to three national holidays, the employees are having sixteen festival holidays. Leave Facilities: The following leave facilities are available to the employees of Janaki Cotton Mills. Casual Leave: The staffs are allowed 7 days casual leave. Earn Leave: The staffs are allowed 20 days earn leave. The laborers are allowed one earn leave for every 15 days. Medical Leave: The staffs are allowed 8 days medical leave. The industry is covered under ESI.

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 Housing Facilities: Housing is the primary need of human beings in a civilized life. It constitutes the most important part if the physical environment which continuously influences man's health and well being. The health, happiness, general manners and morale of the people in urban areas to a large extend are influenced by the conditions of housing. There are no of staff quarters provided by the industry. But the high official persons are provided houses. They constructing Women Hostel in their campus, however there are rooms available inside the industry to stay with all essential features. Transport Facilities: The employees are provided transport facilities on free of cost going to the industry and come back to the home. The industry has 2 mini buses for providing transport facilities by its own. 2.5. Other Facilities:

Safety from Machines & Training to workers: The employees are provided helmet, shoes, mark, gloves, uniform etc to prevent heat and from the machines. Special care is taken to provide training to workers. Each department head identifies the training needs. They intimate these to the administrative officer. Training is done as monitoring is done by the department heads and the administrative officer.

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The training evaluation is done. Usually programmed is undue by the authorized trainers. Training schedule is prepared once in a yearly. Induction Training is also provided.

2.6.

Machine Requirements:

The promoters have installed premium equipment in their mill. Details of the machinery installed by various departments.

S.No. 1 2 3 4 5 6 7 8 9 10

DEPARTMENT Blow Room Carding Machine Draw Frame Simplex Ring Frames Reeling Cone Winding Bundling & Pressing Compressor Generator

QUANTITY 2 lines 8 Numbers 4Numbers 4Numbers 30Numbers 6 Numbers 3 Numbers 1 Numbers 3 Numbers 2 Numbers

FLOW CHART OF PRODUCTION PROCESS

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Mixing Blow Room Carding Drawing Simplex Spinning _____________________________ Autoconer Cone winding Packing Packing

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2.7. Details of Production Process: Blow Room: Cotton generally comes in the form of highly compressed bales, which is well opened in the Blow room. Though this opening process, foreign materials such as leaf, seed particles, dusty and other impurities are removed with minimum loss of lint, which comes in the form of lap. The degree of opening imparted to cotton in the blow room has a good bearing on the yarn quality. Carding: This process further helps to individualize the fibres and to remove foreign substances such as sand, dust, seed coat, leafy matter and other impurities. It also removes the naps present in the lap and forms a continuous uniform sliver of required hank. Drawing: Drawing helps equalize the crises crossed fibres of the card sliver with one another and align them to the axes of the sliver through the process of drafting. It removes the hooks if carded fiber and straightens the Fibres by sliding them over one another. It helps to homogeneously blend number of slivers from different cards, so as to improve, the regularity in weight per unit length of the sliver.

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 Simplex: The diameter of the drawing sliver is reduced sufficiently before final spinning of yarn. The delivered material roving is a continuous strand of fibres twisted slightly before it is wound on bobbins for the next process. Spinning: Spinning is the final process of converting cotton fibres into yarn, which involves the process of spinning together fibres, by drawing them from fibrous mass and the drafted strand to form yarn of required count. It is wound on ring bobbins. Reeling / Winding: Reeling / winding is the process where in the objectionable yarn wasters are removed and the yarn on cops is transformed into marketable Hank / Cone form.

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2. (B). Objectives of the study: 1. To know the Organization and Yarn Manufacturing process of Janaki Cotton Mills Limited, Valliyoor, Tirunelveli district. 2. To analysis and forecast the production and sales level of Janaki Cotton Mills limited.

Need for the study: The study which will help to know the level of production capacity and improve the financial performance of Janaki cotton Mills Ltd

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3. RESEARCH METHODOLOGY

3.1 Research Design: The study is an analytical research. The researcher has used the historical data for the analysis and made a critical evaluation of the materials. 3.2 Nature of study: The nature of data that the researcher is used secondary data. Moreover the researcher has collected relevant primary information regarding inventory management practice of company through discussion with company officials and observations. 3.3 Data collection: The data for the study has been collected from the published statements, viz., Trading & Profit and Loss account and the Balance sheet contained in the annual reports of the company. 3.4 Period of the study: The financial and production related statement are helpful for the analysis of firms performance and take decisions on the basis of analysis. For this purpose the financial statement taken for a period of 2008-09.

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3.5 Scope of the study: The present day is confined only in Janaki Cotton Mills Limited, Tirunelveli district. The main focus of the study is to analysis the flexible budget in Yarn manufacturing process and to find out the problem. 3.6. Tools of data analysis: Budgeting Tools used for the analysis, they are 1. Flexible budget analysis. 2. Production budget and 3. Linear trend.

3.6 Theoretical view of Budgeting: Concept of budgeting: One of the primary objectives of cost accounting is to provide information to business management for planning and controlling. Budgeting act as tool of both planning and control. Budgeting is a formal process of financial planning using financial accounting data. The Institute of Cost and Management, Accountants (UK) defines a budget as a Financial and /or quantitative statement, prepared and approved prior of time, of the policy to be pursued during that period for the purpose of attaining a given objective. It may include income, expenditure and the employment of capital.

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3.6.1. Budgeting and forecasting: Sometimes the terms Budgeting and forecasting are used interchangeably. Both terms have some similarities, for example, both relate to future events and involve prediction of something. The basic difference between budgeting and forecasting lies in degree of sophistication involved in the predictions used by them. According to the National Association of Accountants (USA), Forecasting is a process predicting or estimating a future happening. Forecasting is an essential part of budgeting process. Forecasting is estimating future events and their effects on the budget. Forecasting come to an end after mere estimating. Budgeting is a process of preparing budgets and further aspect are involved in procedure. Besides, forecasting can be made by a firm for purpose other than budgeting, such as a forecast of general business conditions. 3.6.2. Concept of Budgetary Control: Budgetary control is a means of control in which the actual state of affairs is compared with the budget so that appropriate action may be taken with regard to any deviations before it is too late. Briefly, the use of a budget to control a firms activities is known as budgeting control. Budgetary has the 1. To provide an organized procedure for planning. It provides a detailed plan of actions for a business over a definite period of time. 2. To coordinate all the activities of various department of a business firm in such a manner that the maximum profit will be achieved for the minimum use of resources.
34

3. To provide a means of determining the responsibility for all deviations from the plan (budget), and to supply information on the basis of which necessary corrective action may be taken. Thus, budgetary control has the objective of controlling cost.

3.6.3. Objective And Function of budgeting: An effective budgeting system is vital to the success o a business firm. Budgeting firm. Budgeting is needed in organizations to perform the following functions: 1. Planning, 2. Coordination, 3. Communication, and 4. Performance evaluation. Planning: Almost all business activities require some planning to ensure efficient and maximum use of scarce resources. The budget is a formal planning framework that all provides specific deadlines to achieve departmental objective to contributes towards the overall objectives of an organizations. A budget incorporates expected performance and present managerial targets. Thes3e targets guide the business operations and help in overcoming problems and analyzing the future. Budgeting influences the formulation of all business strategies and subsequently assists business managers in executing such strategies.
35

Coordination: Coordination is a managerial function under which all factors of production and all departmental activities are balanced and integrated to achieve the objectives of the organizations. The budgeting process provides the basis for individual in all parts of the organization to exchange ideas on how best to achieve these objectives in the following ways: The existence of a well laid plan is the step towards achieving coordination. Executives are forced to think of the relationships among individual operations, and the company as a whole. Budgets help to restrain the empire-building efforts of executives. Budgets broaden individual thinking by helping to remove unconscious biases on the part of engineers, sales and production officers. Budgets help to search out weakness in the organizational structure. The formulation and administration of budgets isolate problems of communication, of fixed responsibility, and of working relationships. Communication: It is necessary is an efficient organization that all people be informed about the objectives, policies, programmes and performances. This is made possible through their participation in the budgeting process. managers of the resources available to achieve objective and targets.
36

Budgets

inform each manager of what other have agreed to do. They also inform

Control and performance evaluation: Budgeting enters into control three points: a. When a budget is being formulated, departments analyze their plans for the future and submit estimates as per their requirements, justifying each of their demand by demonstrating a need. b. After budgets of different departments have been reviewed and approved they become targets that set desirable limits on spending. c. At the end of the budget period, a comparison of actual expenditures with budget expenditure is made as a mean of judging performance and fixing responsibility for a deviation. Budgets are the basis of performance evaluation in an organization as they reflect realistic estimates of acceptable and expected performance. It is more accurate, reliable and reasonable to measure current performance against a budget rather than against a vague expectation or against result of previous year when conditions might have changed.

37

3.6.4 Advantages of Budgeting: Budgeting plays an important role in the effective use of resource and achieving overall organization goals. It has the following advantages: 1. Budgeting compels and motivates management to make an early and timely study of its problems. It generates a sense of caution and care, and adequate study among manager before decisions are made by them. 2. Budgeting provides a valuable means of controlling income and expenditure of a business as it is a Plan for spending. 3. Budgeting provides a tool through which managerial policies and goals are periodically evaluated, tested and tested and established as guidelines for the entire organization. 4. Budgeting helps in directing capital and other resources into the most profitable channels. 5. The use of budgeting in an organization develops an attitude of Cost consciousness. Stimulates the effective use of resources, and creates an environment of profit-mindedness throughout the organization. 6. It provides a norm, basis or yardstick for measuring performance of departments in organizations.

38

Limitations: 1. Planning, budgeting or forecasting is not exact science; it uses approximations and judgment which may not be cent percent accurate. At best, a budget is an estimate; no one knows precisely what will happen in the future. 2. The Success and utility of budgeting depends upon on cooperation and participation off all members of management. Many a time budgeting has failed because executive management has paid only lip service to its execution. 3. The establishment of a budgeting process takes time. Also, sometimes too much is expected from a budget and in case expectations are not fulfilled, the blame is put on the budget. 3.6.5. FLEXIBLE BUDGETING: A flexible budget that is prepared for a range, i.e. for more than one level of activity. It is set of alternative budget to different expected levels of activity. The flexible budget is also known by other names, such as variable budget, dynamic budget, sliding scale budget, step budget, expense formula budget and expense control budget. The underlying principle of a flexible budget might be developed that would apply to a relevant Range of production; The flexible budget provides a reliable basis for comparison because it is automatically geared to changes in production activity. A flexible budget has the following important features:

39

1. It covers range of activity (output). 2. It is flexible, i.e. easy to change with variation in production levels. 3. It facilitates performance measurement and evaluation. Planning or budgeting for a range of activity rather than for a single level of activity always preferable due to the uncertainty about the changes in activity levels. In flexible budgeting, that ranges of activity is selected, With one or more in between. Among different activity levels the most likely activity level is made the basis for planning business operations. Flexible budgeting makes it easy to adjust plans to changing production levels without any delay. The flexibility involved in this budget makes a very useful decision making tool for management.

3.6.5. (A) Steps in Flexible Budgeting: The following steps involved in developing a Flexible budget: 1. Deciding the range of activity to which the budget is to be prepared. 2. Determining the cost behaviour patterns(Fixed, Variable) 3. Selecting the activity levels (generally in terms of production) in prepare budgets at those levels. 4. Preparing the budget at each activity level selected by associating the activity level with corresponding costs. The corresponding costs to be attached with activity level are determined in terms of their behavior.

40

(B) Advantages of Flexible Budget: 1. Accurate budgeting: The use of flexible budget may result in the preparation of more accurate budgets. Flexible budgeting techniques require that consideration is to be given to the output factor in the budget preparation. Since all costs do not behave in the same manner (as some costs rise faster than others when production increases) a budget giving consideration to the volume (output) factor is bound to be more accurate than one where volume is not considered. 2. Accurate performance measurement: The flexible budgeting technique incorporates changes in activity level and compares actual result with the budget in terms of output achieved. This facilitates more meaningful more comparison and evaluation between actual and budgeted data as comparable data are compared. 3. Coordination: flexible budgeting results in coordination between all activities/departments of a business. Production is planned in relation to expected sales; materials and labour are acquired to meet expected production requirements. Facilities are provided to achieve budgetary goals, and funds are made available for the investments necessary to have higher outputs. 4. Control tool: Flexible budgeting is an effective management control tool. Comparison between the budgeted costs (at the actual production level) and actual costs form the basis for analyzing cost variances and fixing responsibility for the same. In fact managers themselves feel motivated in controlling costs for which they are responsible they are responsible. This contributes to cost control throughout the organization.
41

3.6.6 Production Budget: A production budget is stated in physical units. It specifies the number of units of each product that must be produced to satisfy the sales forecast and to achieve the desired level of closing finished goods inventory. Essentially, the production budget is the sales budget adjusted for inventory changes as follows: Unit to produce =Budgeted sales+Desired closing inventory of finished goods(-) Beginning inventory of finished goods. 3.7Lineat trend: The method of least square may be used either to fit a straight line trend or a nonlinear trend. The straight line may represented by the equation. S = a+b.T when and are constant representing the intercept and slope respectively of the estimated straight line. In order to determine the values of a and b the following two normal equation need to be solved: S=Na + bT ST=aT+bT2 These method is based upon the analysis of Past data. The basic assumption of these methods is that future events area continuation of the past. Fitting of trend to the given data and use this to make forecasts. The result of these method are fairly accurate so long as the trend has a persistent tendency to more in the same direction. The analysis is more reliable for the short term forecast.

42

4. ANALYSIS AND INTERPRETATIONS Table No.4.1 Shows the various cost involved in the actual production process of Mixing during the year 2009.

S.No A 1. 2. B. 3. 4. 5. C 6.

Particulars Variable Cost: Material Cost Labour Cost Semi-Variable Power Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: 7. Direct 8. Indirect 9. Insurance Administrative & Selling overhead.

80% 126928620 602364 32277 5923713.5 3340730.1 35215.3 1037806.5

Following working notes is clearly stated the above table to represents various cost involved each process and calculations, after its convert in to 90% and 100% Working notes:
o o

Average of raw material in this process (per day) = 5670kgs. Total working days = 287 days, i.e 365days 9 Govt. holidays 12 days maintenance=344days. Here, 4 hours shut down for each working days, (4 x 344days=1376hours) 1376/24 hours=57days.

43

Therefore, 344days-57 days =287 days.

Working Notes contd.

o

Percentage production capacity = 287/365days x 100 =78.630% Assume as a roundly 80% is current production capacity.

o o

Per Kilogram of Raw Material: Rs.78/Labour Cost: Total labours production process = 129 Labour cost involved in Mixing process =602364 i.e. Total Labour cost/14 labours in mixing process.

6. Insurance for the mixing process = 35215.3 7. Depreciation: Total depreciation = 74115549

Directly depreciation involved in production process= 47389 Other depreciations (it should divided into each process) Therefore, Mixing process = 5923713.5 &3340730.1 8. Total Administrative & Selling overheads (+)other Administrative expenses (-) other heads (windmills) 7000829 265743 9340259 = 26725841

44

Therefore each process = 1037806.5 On the basis of calculations are converted into 90% and 100%. It helps to compare the current level production to maximum level productions.

Table No.4.1(a) Shows the various cost involved in the process of mixing during the year 2009. S.No A 1. 2. B 3. 4. 5. C 6. 7. 8. 9. Particulars Variable Cost: Material Cost Labour Cost Semi-Variable Power Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: Direct Indirect Insurance Administrative & Selling overhead. Total Inference:
45

80% 126928620 602364 -

90% 142794698 677659 -

100% 158660775 752955 -

32277 5923713.5 3340730.1 35215.3 1037806.5

36311.6 6664177.6 3758321.3 39617.2 1167532.2

40346.25 7404641.7 4175912.6 44019.1 1297258

137900726.4 1555138316.9

172375907.7

Table No.4.1(a) shows that various cost involved in the process of Mixing, Here the capacity of 80% consists the cost of 137900726.4, 90% consists the cost of 1555138316.9 and total cost of maximum level is 172375907.7

Table No.4.2 Shows the various cost involved in the actual production process of Blow room during the year 2009.

S.No A 1. 2. B. 3. 4. 5. C 6.

Particulars Variable Cost: Material Cost Labour Cost Semi-Variable Power Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: 7. Direct Indirect 8. Insurance 9. Administrative & Selling overhead.

80% 125859258 129078 1707650 219991 122033 32277 5923713.5 3340730.1 35215 1037806.5

Following working notes is clearly stated the above table to represents various cost involved each process and calculations, after its convert in to 90% and 100% Working notes: 1. Average of raw material in this process (per day) = 5414kgs.

46

2. Labour Cost: Total labours production process = 129 Labour cost involved in this process = 129078. i.e. Total Labour cost/3 labours in Blowroom process.

Working Notes contd. 3. Power: 1700units x Rs.3.50 =5950 5950 x 287days = 1707650

4. Per Kilogram of Raw Material: Rs.81/5. Fuel and oil: 10% on total amount of Fuel and oil Rs.2199912 6. Repair maintenance: 5.3% on Rs.2302504 7. Insurance for the each process = 35215.3 8. Depreciation: Total depreciation = 74115549

Directly depreciation involved in production process= 47389 Other depreciations (it should divided into each process) Therefore, each process = 5923713.5 &3340730.1 9. Cotton testing fees 7 supervisions: (49216+209000=258216)
47

= 26725841

Divided by 8 process(except packaging), = 32277.

10. Total Administrative & Selling overheads (+)other Administrative expenses (-) other heads (windmills) Therefore each process = 1037806.5

7000829 265743 9340259

On the basis of calculations are converted into 90% and 100%. It helps to compare the current level production to maximum level productions.

Table No.4. 2(a) Shows the various cost involved in the process of Blowroom during the year 2009. S.No Particulars 80% 90% 100%

48

A 1. 2. B 3. 4. 5. C 6. 7. 8. 9.

Variable Cost: Material Cost Labour Cost Semi-Variable Power Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: Direct Indirect Insurance Administrative & Selling overhead. Total

125859258 129078 1707650 219991 122033

141591656 145212.7 1921106.2 247489.8 137287.1

157324073 161647.5 2134562.5 274988.7 152541.2

32277 5923713.5 3340730.1 35215 1037806.5 138407752.1

36311.6 6664177.6 3758321.3 39617.2 1167532.2 155708711.7

40346.25 7404641.7 4175912.6 44019.1 1297258 173009990.6

Inference: Table No.4.2(a) shows that various cost involved in the process of Blowroom, Here the capacity of 80% consists the cost of 138407752.1, 90% consists the cost of 155708711.7 and total cost of maximum level is 173009990.6

Table No.4.3 Shows the various cost involved in the actual production process of carding during the year 2009.

49

S.No A 1. 2. B. 3. 4. 5. C 6.

Particulars Variable Cost: Material Cost Labour Cost Semi-Variable Power Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: 7. Direct Indirect 8. Insurance 9. Administrative & Selling overhead.

80% 124804820 86052 1506750 204592 545693 32277 5923713.5 3340730.1 35215 1037806.5

Following working notes is clearly stated the above table to represents various cost involved each process and calculations, after its convert in to 90% and 100% Working notes: 1. Average of raw material in this process (per day) = 5116kgs.

2. Labour Cost: Total labours production process = 129 Labour cost involved in Carding process =86052 i.e. Total Labour cost/2 labours in Blowroom process.

50

Working Notes contd. 3. Power: 1500units x Rs.3.50 =5250 5250 x 287days = 1506750

4. Per Kilogram of Raw Material: Rs.85/5. Fuel and oil: 9.3% on total amount of Fuel and oil Rs.2199912 6. Repair maintenance: 23.7% on Rs.2302504 7. Insurance for each process = 35215.3 8. Depreciation: Total depreciation = 74115549

Directly depreciation involved in production process= 47389 Other depreciations (it should divided into each process) Therefore, each process = 5923713.5 &3340730.1 9. Cotton testing fees 7 supervisions: (49216+209000=258216) Divided by 8 process(except packaging), = 32277. = 26725841

10. Total Administrative & Selling overheads (+)other Administrative expenses (-) other heads (windmills) Therefore each process = 1037806.5

7000829 265743 9340259

51

On the basis of calculations are converted into 90% and 100%. It helps to compare the current level production to maximum level productions.

Table No.4. 3(a) Shows the various cost involved in the process of Carding during the year 2009. S.No A 1. 2. B 3. 4. 5. C 6. 7. 8. 9. Particulars Variable Cost: Material Cost Labour Cost Semi-Variable Power Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: Direct Indirect Insurance Administrative & Selling overhead. Total 80% 124804820 86052 1506750 204592 545693 90% 140405423 96808 1695093 230166 613905 100% 156006025 107565 1883437 255740 682116

32277 5923713.5 3340730.1 35215 1037806.5 137517649.1

36311.6 6664177.6 3758321.3 39617.2 1167532.2 154707354.9

40346.25 7404641.7 4175912.6 44019.1 1297258 171897060.7

52

Inference: Table No.4.3(a) shows that various cost involved in the process of Carding, Here the capacity of 80% consists the cost of 137517649.1, 90% consists the cost of 154707354.9 and total cost of maximum level is 171897060.7

Table No.4.4 Shows the various cost involved in the actual production process of Drawing during the year 2009.

S.No A 1. 2. B. 3. 4. 5. C 6. 7.

Particulars Variable Cost: Material Cost Labour Cost Semi-Variable Power Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: Direct Indirect 8. Insurance 9. Administrative & Selling overhead.

80% 126199066 129078 301350 46198 437475 32277 5923713.5 3340730.1 35215 1037806.5

Following working notes is clearly stated the above table to represents various cost involved each process and calculations, after its convert in to 90% and 100% Working notes: 1. Average of raw material in this process (per day) = 5113kgs.
53

2. Labour Cost: Total labours production process = 129 Labour cost involved in drawing process =129078. i.e. Total Labour cost/3 labours.

Working Notes contd. 3. Power: 300units x Rs.3.50 =1050 1050 x 287days = 301350

4. Per Kilogram of Raw Material: Rs.86/5. Fuel and oil: 2.8% on total amount of Fuel and oil Rs.2199912 6. Repair maintenance: 19% on Rs.2302504 7. Insurance for the drawing process = 35215.3 8. Depreciation: Total depreciation = 74115549

Directly depreciation involved in production process= 47389 Other depreciations (it should divided into each process) Therefore, Each process = 5923713.5 &3340730.1 9. Cotton testing fees 7 supervisions: (49216+209000=258216)
54

= 26725841

Divided by 8 process(except packaging), = 32277.

10. Total Administrative & Selling overheads (+)other Administrative expenses (-) other heads (windmills) Therefore each process = 1037806.5

7000829 265743 9340259

On the basis of calculations are converted into 90% and 100%. It helps to compare the current level production to maximum level productions.

Table No.4. 4 (a) Shows the various cost involved in the process of Drawing during the year 2009. S.No Particulars 80% 90% 100%

55

A 1. 2. B 3. 4. 5. C 6. 7. 8. 9.

Variable Cost: Material Cost Labour Cost Semi-Variable Power Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: Direct Indirect Insurance Administrative & Selling overhead. Total

126199066 129078 301350 46198 437475

141973950 145213 339019 51973 492159

157748833 161348 376688 57748 546844

32277 5923713.5 3340730.1 35215 1037806.5 137482909.1

36311.6 6664177.6 3758321.3 39617.2 1167532.2 154668273.9

40346.25 7404641.7 4175912.6 44019.1 1297258 154668273.9

Inference: Table No.4.4(a) shows that various cost involved in the process of drawing, Here the capacity of 80% consists the cost137482909.1, 90% consists the cost of 154668273.9 and total cost of maximum level is 154668273.9

Table No.4.5 Shows the various cost involved in the actual production process of Simplex during the year 2009.

56

S.No A 1. 2. B. 3. 4. 5. C 6. 7.

Particulars Variable Cost: Material Cost Labour Cost Semi-Variable Power Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: Direct Indirect 8. Insurance 9. Administrative & Selling overhead.

80% 127591590 430260 904050 120995 391425 32277 5923713.5 3340730.1 35215 1037806.5

Following working notes is clearly stated the above table to represents various cost involved each process and calculations, after its convert in to 90% and 100% Working notes: 1. Average of raw material in this process (per day) = 5110kgs.

2. Labour Cost: Total labours production process = 129 Labour cost involved in these process =430260 i.e. Total Labour cost/10 labours in process.

57

Working Notes contd. 3. Power: 900units x Rs.3.50 =3150 3150 x 287days = 904050

4. Per Kilogram of Raw Material: Rs.87/5. Fuel and oil: 5.5% on total amount of Fuel and oil Rs.2199912 6. Repair maintenance: 17% on Rs.2302504 7. Insurance for the each process = 35215.3 8. Depreciation: Total depreciation = 74115549

Directly depreciation involved in production process= 47389 Other depreciations (it should divided into each process) Therefore, Each process = 5923713.5 &3340730.1 9. Cotton testing fees 7 supervisions: (49216+209000=258216) Divided by 8 process(except packaging), = 32277. = 26725841

10. Total Administrative & Selling overheads (+)other Administrative expenses (-) other heads (windmills) Therefore each process = 1037806.5

7000829 265743 9340259

58

On the basis of calculations are converted into 90% and 100%. It helps to compare the current level production to maximum level productions.

Table No.4. 5(a) Shows the various cost involved in the process of Simplex during the year 2009. S.No A 1. 2. B 3. 4. 5. C 6. 7. 8. 9. Particulars Variable Cost: Material Cost Labour Cost Semi-Variable Power Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: Direct Indirect Insurance Administrative & Selling overhead. 80% 127591590 430260 904050 120995 391425 90% 143540539 484043 1017056 136119 440353 100% 159489488 537825 1130063 151244 489281

32277 5923713.5 3340730.1 35215 1037806.5

36311.6 6664177.6 3758321.3 39617.2 1167532.2 157284069.9

40346.25 7404641.7 4175912.6 44019.1 1297258 174760078.7

Total Inference:

139808062.1

59

Table No.4.5(a) shows that various cost involved in the process of Simplex, Here the capacity of 80% consists the cost of139808062.1, 90% consists the cost of 157284069.9 and total cost of maximum level is 174760078.7

Table No.4.6Shows the various cost involved in the actual production process of Spinning during the year 2009.

S.No A 1. 2. B. 3. 4. 5. C 6.

Particulars Variable Cost: Material Cost Labour Cost Semi-Variable Power Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: 7. Direct Indirect 8. Insurance 9. Administrative & Selling overhead.

80% 127998413 2409456 703150 1473941 630887 32277 5923713.5 3340730.1 35215 1037806.5

Following working notes is clearly stated the above table to represents various cost involved each process and calculations, after its convert in to 90% and 100% Working notes:

60

1. Average of raw material in this process (per day) = 5097kgs.

2. Labour Cost: Total labours production process = 129 Labour cost involved in spinning process =2409456 i.e. Total Labour cost/56 labours in this process.

Working Notes contd. 3. Power: 700units x Rs.3.50 =2450 2450 x 287days = 703150

4. Per Kilogram of Raw Material: Rs.87.5/5. Fuel and oil: 67% on total amount of Fuel and oil Rs.2199912 6. Repair maintenance: 27.4% on Rs.2302504 7. Insurance for the each process = 35215.3 8. Depreciation: Total depreciation = 74115549

Directly depreciation involved in production process= 47389 Other depreciations (it should divided into each process) Therefore, Each process = 5923713.5 &3340730.1
61

= 26725841

9. Cotton testing fees 7 supervisions: (49216+209000=258216) Divided by 8 process(except packaging), = 32277.

10. Total Administrative & Selling overheads (+)other Administrative expenses (-) other heads (windmills) Therefore each process = 1037806.5

7000829 265743 9340259

On the basis of calculations are converted into 90% and 100%. It helps to compare the current level production to maximum level productions.

Table No.4. 6(a) Shows the various cost involved in the process of Spinning during the year 2009. S.No Particulars 80% 90% 100%

62

A 1. 2. B 3. 4. 5. C 6. 7. 8. 9.

Variable Cost: Material Cost Labour Cost Semi-Variable Power Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: Direct Indirect Insurance Administrative & Selling overhead. Total

127998413 2409456 703150 1473941 630887

143998214 2710638 791044 1658184 709748

159998016 301180 878938 1842426 788609

32277 5923713.5 3340730.1 35215 1037806.5 143585589.1

36311.6 6664177.6 3758321.3 39617.2 1167532.2 161533787.9

40346.25 7404641.7 4175912.6 44019.1 1297258 176771346.7

Inference: Table No.4.6(a) shows that various cost involved in the process of Spinning, Here the capacity of 80% consists the cost of 143585589.1, 90% consists the cost of 161533787.9 and total cost of maximum level is 176771346.7

Table No.4.7.1 Shows the various cost involved in the actual production process of winding during the year 2009.

63

S.No A 1. 2. B. 3. 4. 5. C 6. 7.

Particulars Variable Cost: Material Cost Labour Cost Semi-Variable Power Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: Direct 8. Indirect 9. Insurance Administrative & Selling overhead.

80% 39850524 903546 326462 39598 112823 32277 5923713.5 3340730.1 35215 1037806.5

Following working notes is clearly stated the above table to represents various cost involved each process and calculations, after its convert in to 90% and 100% Working notes: 1. Average of raw material in this process (per day) = 1596kgs.

2. Labour Cost: Total labours production process = 129 Labour cost involved in Winding process = 903546 i.e. Total Labour cost/21 labours in this process.

64

Working Notes contd. 3. Power: 325units x Rs.3.50 =1137.5 1137.5 x 287days = 326462

4. Per Kilogram of Raw Material: Rs.87/5. Fuel and oil: 1.8% on total amount of Fuel and oil Rs.2199912 6. Repair maintenance: 4.9% on Rs.2302504 7. Insurance for the each process = 35215.3 8. Depreciation: Total depreciation = 74115549

Directly depreciation involved in production process= 47389 Other depreciations (it should divided into each process) Therefore, Each process = 5923713.5 &3340730.1 9. Cotton testing fees 7 supervisions: (49216+209000=258216) Divided by 8 process(except packaging), = 32277. = 26725841

10. Total Administrative & Selling overheads (+)other Administrative expenses (-) other heads (windmills) Therefore each process = 1037806.5

7000829 265743 9340259

65

On the basis of calculations are converted into 90% and 100%. It helps to compare the current level production to maximum level productions.

Table No.4.7.1(a) Shows the various cost involved in the proce ss of winding during the year 2009.

S.No A 1. 2. B 3. 4. 5. C 6. 7. 8. 9.

Particulars Variable Cost: Material Cost Labour Cost Semi-Variable Power Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: Direct Indirect Insurance Administrative & Selling overhead. Total

80% 39850524 903546 326462 39598 112823

90% 44831839 1016489 367270 44548 126926

100% 49813155 1129433 408078 49498 141029

32277 5923713.5 3340730.1 35215 1037806.5 51602695.1

36311.6 6664177.6 3758321.3 39617.2 1167532.2 58053031.9

40346.25 7404641.7 4175912.6 44019.1 1297258 64503370.65

Inference: Table No.4.7.1 shows that various cost involved in the process of Winding,
66

Here the capacity of 80% consists the cost of 51602695.1, 90% consists the cost of 58053031.9 and total cost of maximum level is 64503370.65

Table No.4.7.2. Shows the various cost involved in the actual production process in Autoconer during the year 2009.

S.No A 1. 2. B. 3. 4. 5. 6. C 7. 8. 9. 10.

Particulars Variable Cost: Material Cost Labour Cost Semi-Variable Power Generator (35%) (65%) Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: Direct Indirect Insurance Administrative & Selling overhead.

80% 81973227 774468 627812 1293394 2402017 94596 62168 32277 5923713.5 3340730.1 35215 1037806.5

Following working notes is clearly stated the above table to represents various cost involved each process and calculations, after its convert in to 90% and 100% Working notes: 1. Average of raw material in this process (per day) = 3238kgs.

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2. Labour Cost: Total labours production process = 129 Labour cost involved in Autoconer process =774468 i.e. Total Labour cost/18 labours in this process.

Working Notes contd. 3. Power: 675units x Rs.3.50 =2187.5 2187.5 x 287days = 627812 (including Generator power:36954112)

4. Per Kilogram of Raw Material: Rs.87/5. Fuel and oil: 4.3% on total amount of Fuel and oil Rs.2199912 6. Repair maintenance: 2.7% on Rs.2302504 7. Insurance for the each process = 35215.3 8. Depreciation: Total depreciation = 74115549

Directly depreciation involved in production process= 47389 Other depreciations (it should divided into each process) Therefore, Each process = 5923713.5 &3340730.1 9. Cotton testing fees 7 supervisions: (49216+209000=258216)
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= 26725841

Divided by 8 process(except packaging), = 32277.

10. Total Administrative & Selling overheads (+)other Administrative expenses (-) other heads (windmills) Therefore each process = 1037806.5

7000829 265743 9340259

On the basis of calculations are converted into 90% and 100%. It helps to compare the current level production to maximum level productions.

Table No.4. 7.2 (a) Shows the various cost involved in the process of Autoconer during the year 2009. S.No Particulars 80% 90% 100%

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A 1. 2. B 3. 4. 5. 6. C 7. 8. 9. 10.

Variable Cost: Material Cost Labour Cost Semi-Variable Power & Generator: (35%) (65%) Fuel & oil Repair & Maintenance Fixed Cost: Cotton testing fee & supervisions. Depreciation: Direct Indirect Insurance Administrative & Selling overhead. Total

81973227 774468 627812 1293394 2402017 94596 62168

92219880 871277 706289 1455068 2702269 106421 69939

102466534 968085 784765 1616743 3002521 118245 77710

32277 5923713.5 3340730.1 35215 1037806.5 97597424.1

36311.6 6664177.6 3758321.3 39617.2 1167532.2 109797102.9

40346.25 7404641.7 4175912.6 44019.1 1297258 121996780.7

Inference: Table No.4.7.2(a) shows that various cost involved in the process of Autoconer, Here the capacity of 80% consists the cost of 97597424.1, 90% consists the cost of 109797102.9and total cost of maximum level is 121996780.7

Table No.4. 8 Shows the various cost involved in the process of packaging during the year 2009.

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S.No A 1. 2. B 3. 4. 5. C 6. 7.

Particulars Variable Cost: Material Cost Labour Cost Semi-Variable Power Fuel & oil Repair & Maintenance Fixed Cost: Insurance

80% 121823751 86052 -

90% 142794698 677659 -

100% 158660775 752955 -

35215 Administrative & Selling overhead. 1037806.5 Total 122982824.5

39617.2 1167532.2 144679506.4

44019.1 1297258 160755007.1

Inference: Table No.4.8 shows that various cost involved in the process of Packaging, Here the capacity of 80% consists the cost of 122982824.5, 90% consists the cost of 144679506.4 and total cost of maximum level is 160755007.1

TABLE No.4.9. PRODUCTION BUDGET FOR SIX MONTH ENDING, 31ST December 2009
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Particulars Sales Add: Closing Stock Less: OpeningStock Add: Loss in production TOTAL (No. of Unit Produced) Inference: S.No 1. 2. 3.

July09
156828 38484.9 195312 47298.4 148014.5 1677.2

Aug.09
126012 47355.4 173367.4 38484.9 134882.5 1528.4

Sep.09
145588 36456.1 182044.1 47355.4 134688.7 1526.2

Oct.09
146912 26813.6 173725.6 36456.1 137269.5 1555.4

Nov.09
126032 39304.3 165336.3 26813.6 138522.7 1569.6

Dec.09
156554 27073.9 183627.9 39304.3 144323.6 1635.3

149691.7

136410.9

136214.9

138824.9

140092.3

145958.9

Details of 2009 Total Production Monthly wise Day to day

80% 16,94,387 1,41,199 5,904

90% 19,06,185.38 1,58,849 6,642

100% 21,17,984 1,76,497 7,380

Working notes for the previous table 4.9. And Inference:

6Months Production (80%Capacity) = 847193.6,

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Therefore 1 year = 1694387, If 90%basis = 1906185.38, Maximum level = 2117983.75

Divided by 12 months = 141199, If90%basis = 158849, If 100% = 176497.

Total working Days

= 287 days (by Calculations)

Therefore, 80% = 1694387 287 = 5904 90% = 1906185.38 287 = 6642 100% = 2117983.75 287 = 7380 Inference: S.No Details of 2009 1. Total Production (kgs) 2. Monthly wise 3. Day to day 80% 16,94,387 1,41,199 5,904 90% 19,06,185.38 1,58,849 6,642 100% 21,17,984 1,76,497 7,380

Above table shows the actual production of 2009 is 1694387kgs, and also its predicts level of capacities as 90% and 100% is 1906185.38 and 2117984 respectively.

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TABLE No.4.9 (a). PRODUCTION BUDGET FOR January t o May 2010, (by using forecasted Value)

Particulars Sales Add: Closing Stock Less: OpeningStock Add: Loss in production TOTAL(Kgs) (No. of Unit Produced) Inference:

Jan
159392 26897

Feb
185958 31380

Mar
212523 35863

Apr.
239089 40346

May
265654 44829

186289 25444.7 160844.3 8986.2

217338 29684.9 187653.1 10483.9

248386 33925 214461 11979.2

279435 38166 241269 13479.3

310483 42407 268076 14977

169830.5

198137

226440.2

254748.3

283053

From the above Table shows that the forecasted value of Sales, Closing stock, opening stock, loss in production, Total production value of 2010January to May. The forecasted value of January2010 is approximately equal to the Production Ledgers of the company.

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5.1. FINDINGS
various cost involved in the process of Mixing, The actual capacity of 80% consists the cost of 137900726.4, 90% consists the cost of 1555138316.9 and total cost of maximum level is 172375907.7 various cost involved in the process of Blow room, The actual capacity of 80% consists the cost of 138407752.1, 90% consists the cost of 155708711.7 and total cost of maximum level is 173009990.6 Subsequent Table shows various cost involved in the process of Carding, The actual capacity of 80% consists the cost of 137517649.1, 90% consists the cost of 154707354.9 and total cost of maximum level is 171897060.7 Various cost involved in the process of Drawing, The actual capacity of 80% consists the cost137482909.1, 90% consists the cost of 154668273.9 and total cost of maximum level is 154668273.9 various cost involved in the process of Simplex, The actual capacity of 80% consists the cost of139808062.1, 90% consists the cost of 157284069.9 and total cost of maximum level is 174760078.7 various cost involved in the process of Spinning, The capacity of 80% consists the cost of 143585589.1, 90% consists the cost of 161533787.9 and total cost of maximum level is 176771346.7 various cost involved in the process of Winding, The capacity of 80% consists the cost of 51602695.1, 90% consists the cost of 58053031.9 and total cost of maximum level is 64503370.65

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 Subsequent table shows that various cost involved in the process of Autoconer, The capacity of 80% consists the cost of 97597424.1, 90% consists the cost of 109797102.9and total cost of maximum level is 121996780.7 various cost involved in the process of Packaging, The capacity of 80% consists the cost of 122982824.5, 90% consists the cost of 144679506.4 and total cost of maximum level is 160755007.1 The Actual production of 2009 is 1694387kgs, and also its predicts level of capacities as 90% and 100% is 1906185.38 and 2117984 respectively.

Forecasted value of Sales, Closing stock, opening stock, loss in production and Total production value of 2010Januaary to May. The forecasted value of January2010 is approximately equal to the Production Ledgers of the company. So for the subsequent financial years also, the forecasted value may be approximately as equal as possible.

Above findings may clearly states that current production level, at the same time slight modification of increasing their productivity to utilizing full capacities will give huge reactions in their production outputs.

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5.2. CONCLUSION
The result of the study is indicating the Janaki Cotton Mills Limited has been performing its production functions effectively in a competitive environment. Now a days many concerns may face failures because of their inability to satisfy their customers demands, and this effective has no reflection on this prestigious concern. From the analysis it is clear that the Janaki cotton Mills Limited is in progressing line to increasing their production capacity and which is having its own reputation and having necessary features, infrastructure, organization, Financial and Production structure to satisfy the customers, certainly this concern will yield and maintain a good result in future.

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BIBILIOGRAPHY

Books: 1. JawaharLal, Cost Accounting, New Delhi, Tata McGraw Hill Publishing company limited, Third Edition, 2007. 2. ICSI (Study material), Information system & Quantitative Techniques Website: 1. (http.//texmin.nic.in) Ministry of Textiles, Government of India. New Delhi ICSI House, (FCISQT-13)2007.

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