PILLAI COLLEGE OF ARTS, SCIENCE AND COMMERCE

(AUTONOMOUS) NEW PANVEL

COST ACCOUNTING PROJECT

TOPIC:-PROCESS COSTING (PARLE-G)

NAME : TANMAY HANUMANT VARHADI

CLASS : S.Y.B.A.F

DIVISION :B

ROLL NO : 5172

ACADEMIC YEAR : 2020-21

SUBMITTED TO : ABIDA KHAN MA’AM

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 ACKNOWLEDGEMENT
I would express my special thanks for gratitude to my Accounts teacher,
PROF. ABIDA KHAN for the successful and final outcome of this assignment which
required lots of guidance and assistance. Presentation inspiration and motivation have
always played a key role in the success of any venture.

I am extremely fortunate to have completed my assignment work. Whenever I

have done is only due to such Guidance and assistance and I should not forget to thank
them. I respect and thank our principal DR.GAJANAN wader at the first place for
giving me an opportunity to do this assignment and providing me support and
guidance through which I could complete the assignment in time.

DATE: 08/09/2020 TANMAY HANUMANT VARHADI

S.Y.B.A.F

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 INDEX
SR NO. NAME PAGE NO.

1. Introduction on Process costing 4

2. Important terms 5

3. Introduction on Parle-G 7

4. History 9

5. Evolution 10

6. Actual Process 11

7. Manufacturing Process Flow Chart 13

8. The Marketing Strength and Quality 14

Commitment

9. Bibliography 15

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 INTRODUCTION ON PROCESS COSTING
Process costing is an accounting methodology that traces and accumulates direct costs,
and allocates indirect costs of a manufacturing process. Costs are assigned to products,
usually in a large batch, which might include an entire month's production. Eventually,
costs have to be allocated to individual units of product. It assigns average costs to each
unit, and is the opposite extreme of Job costing which attempts to measure individual
costs of production of each unit. Process costing is usually a significant chapter. It is a
method of assigning costs to units of production in companies producing large quantities
of homogeneous products.
Process costing is a type of operation costing which is used to ascertain the cost of a
product at each process or stage of manufacture. CIMA defines process costing as "The
costing method applicable where goods or services result from a sequence of continuous
or repetitive operations or processes. Costs are averaged over the units produced during
the period". Process costing is suitable for industries producing homogeneous products
and where production is a continuous flow. A process can be referred to as the sub-unit
of an organization specifically defined for cost collection purpose.
Definition: CIMA London defines process costing as “that form of operation costing
which applies where standardize goods are produced”

There are four basic steps in accounting for Process cost:

• Summarize the flow of physical units of output.

• Compute output in terms of equivalent units.
• Summarize total costs to account for and Compute equivalent unit costs.
• Assign total costs to units completed and to units in ending work in process inventory.
The journal entries for process costing are the same as those for job-order costing with
one exception. The entry to transfer cost from one work-in-process account to another is:
Work-in-process inventory-second department Debit (Left)
Work-in-process-first department Credit (Right)

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 IMPORTANT TERMS
Process costing is a method of costing used mainly in manufacturing where units are
continuously mass-produced through one or more processes.
Examples of this include the manufacture of erasers, chemicals or processed food.
In process costing it is the process that is costed (unlike job costing where each job is
costed separately). The method used is to take the total cost of the process and average
it over the units of production.
Cost per unit = Cost of inputs .
Expected output in units
In a manufacturing process the number of units of output may not necessarily be the
same as the number of units of inputs. There may be a loss.
Normal loss: This is the term used to describe normal expected wastage under usual
operating conditions. This may be due to reasons such as evaporation, testing or
rejects.
Abnormal loss: This is when a loss occurs over and above the normal expected loss.
This may be due to reasons such as faulty machinery or errors by laborers.
Abnormal gain: This occurs when the actual loss is lower than the normal loss. This
could, for example, be due to greater efficiency from newly-purchased machinery.
Work in progress (WIP): This is the term used to describe units that are not yet
complete at the end of the period. Opening WIP is the number of incomplete units at
the start of a process and closing WIP is the number at the end of the process.
Scrap value: Sometimes the outcome of a loss can be sold for a small value. For
example, in the production of screws there may be a loss such as metal wastage. This
may be sold to a scrap merchant for a fee.
Equivalent units: This refers to a conversion of part-completed units into an
equivalent number of wholly-completed units. For example, if 1,000 cars are 40%
complete then the equivalent number of completed cars would be 1,000 x 40% = 400
cars.

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Features of Process Costing:
(a) The production is continuous
(b) The product is homogeneous
(c) The process is standardized
(d) Output of one process become raw material of another process
(e) The output of the last process is transferred to finished stock
(f) Costs are collected process-wise
(g) Both direct and indirect costs are accumulated in each process
(h) If there is a stock of semi-finished goods, it is expressed in terms of equalent units
(i) the total cost of each process is divided by the normal output of that process to find
out cost per unit of that process.
Advantages of process costing:
Costs are being computed periodically at the end of a particular period. It is simple and
involves less clerical work that job costing. It is easy to allocate the expenses to
processes in order to have accurate costs. Use of standard costing systems in very
effective in process costing situations. Process costing helps in preparation of tender,
quotations. Since cost data is available for each process, operation and department,
good managerial control is possible.
Limitations:
Cost obtained at each process is only historical cost and are not very useful for
effective control. Process costing is based on average cost method, which is not that
suitable for performance analysis, evaluation and managerial control. Work-in-progress
is generally done on estimated basis which leads to inaccuracy in total cost calculations.
The computation of average cost is more difficult in those cases where more than one
type of products is manufactured and a division of the cost element is necessary. Where
different products arise in the same process and common costs are prorated to various
costs units. Such individual products costs may be taken as only approximation and
hence not reliable.

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 INTRODUCTION ON PARLE-G

A long time ago, when the British ruled India, a small factory was set up
in the suburbs of Mumbai city, to manufacture sweets and toffees. The year was
1929 and the market was dominated by famous international brands that were
imported freely. Despite the odds and unequal competition, this company called
Parle Products, survived and succeeded, by adhering to high quality and
improvising from time to time. A decade later, in 1939, Parle Products began
manufacturing biscuits, in addition to sweets and toffees. Having already
established a reputation for quality, the Parle brand name grew in strength with
this diversification. Parle Glucose and Parle Monaco were the first brands of
biscuits to be introduced, which later went on to become leading names for great
taste and quality.
Parle Biscuits Limited is a subsidiary of the Parle Products Limited,
Mumbai, which is a closely held company run by the Chauhans. Today Parle
enjoys a 40% share of the total biscuit market and 15% share of the total
confectionery market in India. The research paper suffers from certain
limitations, for e.g. the limited access to sources of data and materials,
limitations with respect to time and also with respect to the limited space in
which the researcher has restricted his research work. However, the researcher
has ensured that only standard text books, commentaries and materials are
being resorted to while carrying on his research.
Primarily eaten as a tea-time snack, Parle-G is one of the oldest brand
names in India. For decades, the product was instantly recognized by its iconic
white and yellow wax paper wrapper. The wrapper features a young girl (an
illustration by Everest creative Maganlal Daiya back in the 1960s). Parle-G has

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recently become available in plastic wrapping. The modern packaging retains
its traditional design. The change in materials was promoted with
advertisements showing a Parle-G packet placed into a fish tank .
RAW MATERIAL USED:

➢ Wheat flour
➢ Sugar
➢ Partially hydrogenated edible vegetable oils
➢ Milk Powder
➢ Salt
➢ Flavors.
This material makes the glucose biscuits tasty & eatable. And the
following material makes it healthy and increase the quality of a
product.
➢ Partially Hydrogenated Edible
➢ Invert syrup
➢ Iron Calcium
➢ Dough Condition
➢ Baking Soda
The raw material is mixed in certain proportion, to get the best
quality of biscuits. All the ingredients are tested in laboratory so
that no low quality of raw material is used in manufacturing
process. The raw material is tested for their acidic value, moisture
it contains, and quality of milk powder

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 HISTORY
Parle-G or Parle Glucose biscuits, manufactured by Parle Products Pvt. Parle
Products was established as a confectionery maker in the Vile Parle suburb
of Mumbai, in 1929. Parle Products began manufacturing biscuits in 1939. In
1947, when India became independent, the company launched an ad
campaign, showcasing its Gluco brand of biscuits as an Indian alternative to
British-branded biscuits. Parle-G biscuits were earlier called 'Parle Gluco'
Biscuits until the 1980s. The "G" in the name Parle-G originally stood for
"Glucose", though a later brand slogan also stated "G for Genius".
In 2013, Parle-G became India's first FMCG brand to cross
the ₹5,000 crore mark in retail sales. Ltd, are one of the most popular biscuits
in India. Parle-G is one of the oldest brand names as well as the largest
selling brand of biscuits in India. For decades; the product was instantly
recognized by its iconic white and yellow wax paper wrapper with the
depiction of a young girl on the front. Parle-G has been a strong household
name across India. The great taste, high nutrition, and the international
quality, make Parle- G a winner. No wonder, it's the undisputed leader in the
biscuit category for decades.
Parle-G is consumed by people of all ages, from the rich to the poor, living
in cities & in villages. While some have it for breakfast, for others it is a
complete wholesome meal. For some it's the best accompaniment for tea,
while for some it's a way of getting charged whenever they are low on
energy. Because of this, Parle-G is the world's largest selling brand of
biscuits. Launched in the year 1939, it was one of the first brands of Parle
Products. It was called Parle Glucose Biscuits. The incredible demand led
Parle to introduce the brand in special branded packs and in larger festive tin
packs. By the year 1949, Parle Glucose biscuits were available not just in
Mumbai but also across the state. It was also sold in parts of North India.
The early 50s produced over 150 tons of biscuits produced in the Mumbai
factory. Looking at the success of Parle-G, a lot of other me-too brands were

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introduced in the market. And these brands had names that were similar to
Parle Glucose Biscuits.

.EVOLUTION
Parle-G has been a strong household name across India. The great taste, high
nutrition, and the international quality, makes Parle-G a winner. No wonder,
it's the undisputed leader in the biscuit category for decades. Parle-G is
consumed by people of all ages, from the rich to the poor, living in cities &
in villages. While some have it for breakfast, for others it is a complete
wholesome meal. For some it's the best accompaniment for tea, while for
some it's a way of getting charged whenever they are low on energy.
Because of this, Parle-G is the world's largest selling brand of biscuits.
Launched in the year 1939, it was one of the first brands of Parle Products. It
was called Parle Gluco Biscuits mainly to cue that it was a glucose biscuit. It
was manufactured at the Mumbai factory, Vile Parle and sold in units of half
and quarter pound packs. The incredible demand led Parle to introduce the
brand in special branded packs and in larger festive tin packs. By the year
1949, Parle Gluco biscuits were available not just in Mumbai but also across
the state. It was also sold in parts of North India. By the early 50s, over 150
tones of biscuits were produced in the Mumbai factory. Looking at the
success of Parle-G, a lot of other me-too brands were introduced in the
market. And these brands had names that were similar to Parle Gluco
Biscuits so that if not by anything else, the consumer would err in picking
the brand. This forced Parle to change the name from Parle Gluco Biscuits to
Parle-G. Originally packed in the wax paper pack; today it is available in a
contemporary, premium BOPP pack with attractive side fins. The new
airtight pack helps to keep the biscuits fresh and tastier for a longer period.
Parle-G was the only biscuit brand that was always in short supply. It was
heading towards becoming an all-time great brand of biscuit. Parle-G started
being advertised in the 80's. It was advertised mainly through press ads. The
communication spoke about the basic benefits of energy and nutrition. In
1989, Parle-G released its Dadaji commercial, which went on to become one
of the most popular commercials for Parle-G.

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 ACTUAL PROCESS

The production process of company is running continuously for 24 hours.

The factory is divided in 3 sections.
➢ First section is domestic product section. In this section they are
manufacturing only those goods, which is sale within the boundary of the
country.
➢ Second section is Export goods where only exported goods are made. The
process and quality of goods are same as Domestic Product. Size and
Packing process is different from Domestic biscuits. Exporter
Biscuits are smaller as compare to Domestic biscuits.
➢ Third section is of yummy testy cream biscuits. They are also
manufacturing cream biscuits. This section is fully air-conditioner.
Actual process of production is divided into 6 steps. Following are the
steps of production process.

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1. Checking of Raw Material: Before starting actual process of making
biscuits all raw material checked in laboratory if quality of raw material is
not good then they return those of raw material.
2. Mixing of Ingredients: After checking of raw material, raw material is
going for mixture. In mixing department 3 big mixers are working known as
Steven Mixers. These mixers mix the all raw material in their appropriate
ratio. Each mixer has capacity of 500kg mixing at a time.

3. Molding Section: In molding section the ready mixture go from one big
machine. This machine cut this mixture in a perfect size & shape of glucose
biscuit. And stamp on that Biscuit Parle-G.
4. Baking Section: In banking section biscuits are go from one big oven.
These ovens are categorized in eight parts. Parle agro has the biggest oven
in Asia.
5. Cooling: After the process of baking the biscuits are very hot it should be
cool before packing. For cooling, biscuits rolled through conveyer belt.
6. Packing: Ready biscuits are sent for packing in packing section. Packing
process of Parle-G biscuits is different for Domestic product and Export
goods. Packing process of product is fully automatic. There are 10 machine
are setup for packing biscuits quantity wise like 200g, 1.5 kg etc. Out of 10
machines two machines are not convertible for packing different types of
goods. These two machines are made only for Family Pack. For Export
goods they are using special Aluminum Foil pack because it should be
preserved for more than 1 year. The size of biscuits is small. For cream
biscuits, Packing of cream biscuits is done by quantity wise.

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 MANUFACTURING PROCESS FLOW CHART

RAW MATERIAL
TESTING

MIXING

MOULDING

BAKING
COOKING

PACKING
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 THE MARKETING STRENGTH AND QUALITY
COMMITMENT

The extensive distribution network, built over the years, is a major strength for
Parle Products. Parle biscuits & sweets are available to consumers, even in the
most remote places and in the smallest of villages with a population of just
500.Parle has nearly 1,500 wholesalers, catering to 4,25,000 retail outlets
directly or indirectly. A two hundred strong dedicated field force services
these wholesalers & retailers. Additionally, there are 31 depots and C&F
agents supplying goods to the wide distribution network.
The Parle marketing philosophy emphasizes catering to the masses.
They constantly endeavor at designing products that provide nutrition & fun to
the common man. Most Parle offerings are in the low & mid-range price
segments. This is based on their understanding of the Indian consumer psyche.
The value-for-money positioning helps generate large sales volumes for the
products. However, Parle Products also manufactures a variety of premium
products for the up-market, urban consumers. And in this way, caters a range
of products to a variety of consumers.
Parle Products has one factory at Mumbai that manufactures biscuits &
confectioneries while another factory at Bahadurgarh, in Haryana
manufactures biscuits. Apart from this, Parle has manufacturing facilities at
Neemrana, in Rajasthan and at Bangalore in Karnataka. The factories at
Bahadurgarh and Neemrana are the largest such manufacturing facilities in
India. Parle Products also has 14 manufacturing units for biscuits & 5
manufacturing units for confectioneries, on contract. All these factories are
located at strategic locations, so as to ensure a constant output & easy
distribution. Each factory has state-of-the-art machinery with automatic
printing & packaging facilities. All Parle products are manufactured under the
most hygienic conditions. Great care is exercised in the selection & quality

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control of raw materials, packaging materials & rigid quality standards are
ensured at every stage of the manufacturing process. Every batch of biscuits &
confectioneries are thoroughly checked by expert staff, using the most modern
equipment.

BIBLIOGRAPHY

• http://archive.mu.ac.in/myweb_test/MCOM-Ac-%20Paper%20-
%20II.pdf
• https://en.wikipedia.org/wiki/Parle-G
• http://www.parleproducts.com/
• https://en.wikipedia.org/wiki/Process_costing

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