Marginal Costing in Managerial Decision Making

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A Case Study on Application of Marginal Costing in Managerial Decision Making of N M CREATIONS Submitted by:ã Abbas Chitalwala ã Abhee Parmar ã Bhawin Saraiya ã Jagruti Patti ã Arun Mishra 03 04 29 54 24 A report submitted to the institute as part of the project required for the subject Financial and Cost Accounting for the year 2011-2013. Under the guidance of: Prof L. N. Chopde Mumbai Educational Trust Page | 1 PREFACE Through this ‘Case Study of APPLICATION OF MARGINAL in n m creations
  A Case Study on Application of MarginalCosting in ManagerialDecision Making of   N M CREATIONS Submitted by:- ã Abbas Chitalwala 03 ã Abhee Parmar 04 ã Bhawin Saraiya 29 ã  Jagruti Patti 54 ã Arun Mishra 24   A report submitted to the institute as part of theproject required for the subject Financial andCost Accounting for the year 2011-2013.Under the guidance of: Prof L. N. Chopde Mumbai Educational Trust Page | 1  PREFACE  Through this ‘ Case Study of  APPLICATION OF MARGINALCOSTING IN MANAGERIAL DECISION MAKING in n m creations ’ wehope we have successfully managed to explain theconcepts and processes with practical examples. Whileconcepts of accounting principles are best understoodonly by actually applying them in practical purpose;clarity of theoretical concepts is very crucial tounderstand what the purpose of the calculations is.Keeping that in mind our group will first explain theconcepts of overhead costing and later; through thecompany in light, help understand how the concepts areconverted into the required format by accountants forthe purpose of maintaining Books of Accounts. A brief overview of the company is also provided though muchfocus is given to our project related aspect. To concludewe share a common yet critical view of this topic thatmost managers would agree with and find relevant.N M C reations is a Manufacturing company that hasbeen in business for over 4 years. Their clients includemany famous brands of India. Page | 2  ACKNOWLEDGEMENT We would like to express our sincere gratitude to Prof.L. N. Chopde for giving us the opportunity to work onsuch an informative project which proved to be a verygood learning experience. We would also like thank himfor his valuable expertise and for guiding us throughoutour project.Our sincere thanks to Mr. Hamir Merchant of n mcreations for allowing us to study this topic with practicalexamples.We would also like to thank the MET Library staff forallowing us to use the library for our reference purpose.Finally, we would like to thank all those who havedirectly and indirectly helped us throughout our projectand motivated us for its successful completion.   Page | 3  EXECUTIVE SUMMARY  We begin our project by throwing light on the variousconcepts of Marginal Costing including Contribution,Profit and Breakeven Analysis. Marginal Costing alsohelps in understanding the Margin of Safety and desiredprofit. This followed by a brief introduction of the company n mcreations and their profile. Then through a detailed Profit and Loss Account of theCompany for year ended 31 st March 2008 we will explainthe various elements listed and their relevance. Theseare followed by notes to explain the items included inthe Fixed and Variable Costs and the basis forcalculation.In conclusion we talk about the impact of MarginalCosting while taking Managerial Decision for thecompany specially reducing costs and projectexpansions.Our most relevant source for content was the companyn m creations followed by the theory taught by Prof.Chopde and various books as well. Page | 4
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