Costs and costing analysis of a cement factory : a case study
Abstract
This paper analyses the costing system for cement
production. The cement industry in South Africa is
under price control and the building of cement factories
requires huge capital investments. To ensure a
satisfactory rate of return on capital invested it is
absolutely imperative that production costs are kept
to the minimum.
Chapter l
The cement production process is discussed in this
chapter to enable the reader to understand where the costs
are originated in a cement factory.
is attached.
Chapter II
A process flow sheet
The principles of process costing are discussed in
this chapter. Attention is also given to marginal costs
in a process cost system, standards and budgets. Certain
principles of a process cost system for a cement factory
a.re suggested.
Chapter III
The costing system of a certain Factory A is discussed,
including the limestone quarry system. Responsibility
centres are shown on an organisation chart.
Chapter IV
Factory A's costing system is compared with the
principles as laid down in Chapter II and certain
suggestions are made.
The conclusion reached i s that a logical process
cost system is absolutely imperative in order to obtain
a clear picture of the cement production costs.