production process of honda motor cyle..with CPR by students of university of Gujrat

Cost Accounting Topic: Production Process of Honda Motorcycle Submitted to: Mam Sadia Bint-a-Raza Submitted by: Mubeen Tahir

(08020920-038)

Mehjabeen Mehjabeen Malik

(08020920-015)

Rabia Arshad

(08020920-023)

Usama Asghar

(08020920-098)

Ayaz Bhutta Bhutta

(08020920-087)

Date: 22-01-2010 University Of Gujrat Hafiz Hyatt Campus

Honda Motor Company Limited is perhaps best known as an automaker. It is the third largest automaker in Japan but the company has its roots in motorcycles, and is the world's top motorcycle manufacturer.

History: The

'Honda Motor Company' was founded on in 1948, by Soichiro Honda (1906²1991), a

mechanic and engineer/inventor who began as a blacksmith, working at his father, Gihei Honda's bicycle repair shop. In 1938, at the age of 32, Soichiro Honda was working at an auto repair-shop in

Tokyo,

called called Art Shokai, Shokai, where he began using his self-taught mechanical and engineering

skills. Honda briefly studied mechanical engineering and design at Hamamatsu at Hamamatsu Technical High Technical High School, where Honda perfected per fected his new design for the piston ring. During the Japanese reconstruction period of the early 1940s, Soichiro Honda began designing motor-driven bicycles. Honda built his first motor-scooter, known simply as the "A-T ype," in 1947. Honda started to make an international name for itself with the introduction of the CB models. Started by a CB72 (250cc) and the CB77 (305cc). The first series used the old press steel frames and the better road handling came with the introduction of the steel tubular frames in the CB92. The

CB77 (super hawk) was excellent, reliable motorcycle which outperformed many similar

English models One year later he started the 'Honda Motor Company' and began building small-displacement 'tiddler' style motor-scooters. Honda introduced his first motorcycle in 1949; the 'Dream D- T ype' with a 3 horsepower, 98cc engine. Hondas were also sold under the "Benly" name, with "Honda" appearing on the engine case

Honda started building bigger engine bikes with the first model CB450 in 1965.

The

black

bomber / black hawk were an attack to the dominating English bikes in this area. Although the CB450 didn't match the British motorcycles (yet) the competition had begun. .Starting in the 1980s Honda developed a series of V-four engines which setup the model line of Honda VFs ranging between 400cc and 1000cc. But due to mechanical problems the VF line never really got going. The

Fire blade (also a CBR model) was a new chapter for Honda and motorcycle fans

worldwide.

The

introduction of the CBR900RR (893cc) in 1992 was a huge improvement from

what was then out on the market. This came largely because of the engine capacity in a smaller light frame.

The

bike was redesigned a few times but only regained its original success with the

2000 model fire blade CBR929RR (929cc). Two years later the power was increased once again to 954cc The

Manufacturing Process:

According to the need of the company for manufacturing of motorcycles the material is requisitioned and a purchase order is sent to the suppliers by the purchase department and the Honda industry purchases the material from outside the country as well as within country through local costing. Raw materials which consist of parts and components arrive at the manufacturing plant by truck or rail and the transportation charges are paid by the Honda industry.

The

material is being received by the receiving department and the slips are made by

that department after matching the purchase order with the material list provided by the supplier. Then

there is the work of inspection department that works on when it receives the order from

receiving department to inspect the material. The defected materials and parts are returned to the places from where they come after inspection. Different materials are sent to the different departments for the further procedure. The

manufacturing process is completed in three major steps which are

 Paint Shop.  Engine Assembling.  Frame Assembling.

Paint S hop: The

raw materials which consist of parts in the case of motorcycle are sent to the paint

shop for painting.

Powd er Coating: Plastic and metal parts and components are painted in the paint department using a process known as powder-coating (this is the same process by which automobiles are painted). A powder-coating apparatus works like a large spray-painter, dispersing paint through a pressurized system evenly across the metal frame.

C harg ed Particl es: First of all the parts are negatively charged with the help of the electrons then the positively charged particles in the form of color are sprayed to these charged parts. As we know that the positive and negative charged particles attract each other so these charged particles attract each other in the form of paint and thus the parts are painted.

The

numbers of the

negatively charged particles are equal to the number of the positive charged particles so we can see smooth paints on the parts of the motorcycle. And this is the reason that the paints are not spoiled by sun and rain.

The

parts which

are painted in the a single

unit

of

motorcycle are  Fuel Tank.  Side Cover set.  Swing Arm.  Hub Front.  Panel Front.  Magnet Front.  Top Bridge.  Handle Cover. These

are the painted body parts of motorcycle

 Clutch Plate.  Main Stand.  Side Stand.  Muffler Stand.  Battery Stand.  Step Bar.  Meter Bracket.  Head Top Cover.  Head Right Cover.  Tappit Covers set.

Labor Labor Force: There

are 18 labors which are working in this department and we are giving hour wise

wages to our labors. We are offering Rs.25/- per hour to our each labor.

Dir ect Labor: Labor: There

are 10 people who are working in this department in the production pro duction process.

Labor Labor Cost: One labor cost =

Rs25/-per hour

For 10 Labors =

Rs250/-per hour

If the the labors will work f work f or one month and 8 hours in a day then the cost will be Rs60000/-.

ndir ect Labor: I ndir Labor: The

remaining 8 are working as indirect ind irect labors. These 6 people includes

 3 Supervisors.  2 Sweepers.  3 people which are working on moving trail from one channel to another for the shifting

of materials.


Rs25/-per hour

For 8 Labors =

Rs200/-per hour


Mat erial: The

above 21 parts p arts which are mentioned above used as the material of this portion.

Dir ect Mat erial: The

materials which are using in this department depart ment as a direct material and their costs are: Theses



Fuel Tank.

Rs850/-



Side Cover set.

Rs750/-



Swing Arm.

Rs460/-



Hub Front.

Rs140/-



Panel

Rs50/-



Magnet Front.

Rs200/-



Top

Rs175/-



Handle Cover.

Rs50/-



Clutch Plate.

Rs325/-



Main Stand.

Rs250/-



Side Stand.

Rs150/-



Muffler Stand.

Rs75/-



Battery Stand.

Rs70/-



Step Bar.

Rs125/-



Meter Bracket.

Rs200/-



Head Top Cover.

Rs40/-



Head Right Cover.

Rs85/-



Tappit

Rs100/-

Front.

Bridge.

Covers set.

ar e t he he cost for one unit:

Total

cost for direct material=

Rs3887/-

If we we are going to produce 150 units then the cost will be Rs583050/R s583050/-

I ndir ndir ect Mat erial: The

indirect material and their cost are Theses



Paint



Alumininum Alloy

Total

Color

ar e t he he cost for one unit:

Rs400/Rs135/-

cost for the indirect material =

Rs535/-


Factory Over H ead: 

Factory Supplies.

Rs8000/-



Repairs and Maintenance.

Rs3500/-



Electric Power.

Rs6000/-



Fuel.

Rs4500/-



Depreciation Machinery.

Rs2000/-



Insurance. (Fire)

Rs3000/-



Water

Rs1000/-

Factory Over Head =

Rs28000/-

Cost for t his d e partment: If we are going to produce 150 units and our labors work 8 hours in a day and they are able to produce 150 units in one month then the co st for this department will be Direct Material

Rs583050/-

Direct Labor

Rs60000/-

Factory Over H ead

Indirect Material

Rs80250/-

Indirect Labor

Rs48000/-

Factory Supplies.

Rs8000/-


Rs3500/-

Electric Power.

Rs6000/-

Fuel.

Rs4500/-


Rs2000/-

Insurance. (Fire)

Rs3000/-

Water

Rs1000/-

Total

Factory over head

Rs156250/-

otal T otal

Cost for t his d e partm ent

Rs799300/-

(for 150 units)

Cost of Production R e port: Honda Paint department Cost of production report

Quantity schedul e: Units

started in process

150

Units

completed and transferred out

130

Units

still in process(all material-1/2 of labor and foh)

20

Cost charg ed to t he he d e partment: Cost added by department:

Total

cost

Unit

cost

Material

60000

400

Labor

583050

4164.6428

150

FOH. Total

cost to be accounted for:

156250

1116.07142

799300

5680.71422

Cost account ed for as follows: Transferred Work

to the next department

(130*5680.71422) = 738492.8578

in process-ending inventory

Material (20*400)

8000

Labor(20*4164.6428*1/2)

41646.428

FOH(20*1116.07142*1/2)

11160.7142

Total

cost accounted for:

60807.1422 799300

Additional Additional computations:

Equivalent production: materials=130+(20*100%)=150 Labor=130+(20*1/2)=140 Factory overheads=130+(20*1/2)=140

U nit nit costs: Material:

60000/150=400

Labor:

583050/140=4164.6428

FOH:

156250/140=1116.07142

E ngin ngine Ass Assembling: Engine is the most important part of the motorcycle. All working of the motorcycle depends upon this part. are

17

steps

which

take

There

place

in

assembling of the engine. The parts of the engine which are purchased in the form of raw material are sent to the engine assembling room.

Piston Connection: The

first step in the assembling of

engine is connecting the piston with push rod. A cylindrical piston, made of aluminum alloy (preferred because it is lightweight and conducts heat well), is an essential component of the engine.

Valve Lift Lift er: In second step, It is fitted with piston rings made of cast iron.

Then

the valve lifter is

placed below the piston p iston and the push rod and spark lead is installed.

I nl nl et and Combustion C hamber: In third step, the inlet part is established in the combustion chamber which is fitted with the piston. The cooling fan is also placed which helps the piston to remain cool at time when the motorcycle is driven more by the driver. dr iver.

Crankcase: Crankcase is plugged then the oil pump is installed with the engine mountain belt and oil passage way is placed in the engine on the crankcase which circulates the oil in the whole engine

which helps the engine to be work more smoothly and efficiently. The crankshaft and crankcase are made of aluminum. T iming iming

G ear wit h t he he Piston:

The

one of the important step in the assembling of the engine is the establishment of

timing gear with the piston through engine mountain belt hole. Crankshaft and Camshaft gear is placed on the crankcase.. The engine also contains a cylinder barrel, typically made of cast iron or light alloy.

Ex haust Port: The

exhaust port is placed at the mouth of combustion chamber which throws all the heat

out from the engine. Finally the rocker arm is placed and the screws are placed in the rocker arm. These

are the steps which are t aken place in the assembling of the engine. e ngine.







Rs25/-per hour

For 15 Labors =

Rs375/-per hour



remaining 5 are working as indirect ind irect labors. These 5 people includes

 1 Supervisors.  2 Sweepers.  2 The people who are working on the rolling machine for shifting of material


Rs25/-per hour

For 5 Labors =

Rs125/-per hour


Mat erial: The

above 21 parts p arts which are mentioned above used as the material of this portion.



Cylinder head

Rs525/-



Rocker Arm

Rs325/-



Exhaust Port

Rs150



Combustion Chamber

Rs640/-



P iston

Rs1200/-



Cooling Fan

Rs200/-



Push

Rs670/-



Valva Lifter

Rs325/-



Engine Mmountain Bolt Hole

Rs100/-



Timing

Rs325/-



Crank Shaft



Nonwritten



Mounting Lug

Rs450/-



Oil Pump

Rs1000/-



CrankCase

Rs550/-



Oil Pessageway

Rs220/-



Camshaft Gear

Rs1500/-



Spark Plug Lead

Rs25/-



Inlet Port

Rs150/-

Rod

Gear

Rs400/valva

Rs50/-



Oil Feed P ipe

Rs120/-



Nut tappet adjuster Screw and Lok N

Rs75/-

Total

cost for direct material =

Rs 9000/-

If we we are going to produce 150 units then the cost will be Rs1350000/-


Total

indirect material and cost for this are



Nut



Screws

Bolt

Rs100/Rs100/-

cost for indirect indirect material=

Rs200/-



Factory Supplies.

Rs9000/-




Rs2500/-



Electric Power.

Rs6000/-



Fuel.

Rs4200/-




Rs2000/-



Insurance. (Fire)

Rs7000/-



Water

Rs1000/-

Factory Over Head =

Rs31700/-


Rs1350000/-

Direct Labor

Rs90000/-

Factory Over H ead

Indirect Material

Rs30000/-

Indirect Labor

Rs30000/-

Factory Supplies.

Rs9000/-


Rs2500/-

Electric Power.

Rs6000/-

Fuel.

Rs4200/-


Rs2000/-

Insurance. (Fire)

Rs7000/-

Water

Rs1000/-

Factory Over Head =

Rs91700/-

otal T otal

Rs1531700/-


(for 150 units)

Cost of Production R e port: Honda Engine department Cost of production report


received from previous dept.

130

Units


Units

still in process(all material-1/2 of labor and FOH)30

Units

lost in process proc ess

90

10

130

Cost charg ed to t he he d e partment: Total

Cost from prceeding department:

cost

Unit cost

738492.8578 5680.714291

Cost added by department: Material

1350,000

11250

Labor

90000

857.1428571

FOH

91700

873.3333333

Total

cost to be accounted for

2270192.858

18661.19048 473.3928576 19134.58334

Cost account ed for as follows: Transferred

Work


90*19134.58334=1722112.501 90*19134.58334=1722112. 501

in process-ending inventory

Adjusted cost from preceding department: 30*(5680.714291+473.3928576)=184623.2145 Material =30*11250*100%=

337500

Labor=30*857.1428571*1/2=

12857.14286

FOH.=30*873.3333333*1/2=

13100

Total

363457.1429

cost accounted for

2270192.857

Additional computations:

Equivalent production units : Materials=90+(30*100%)=120

Labor=90+(30*1/2)=105 Factory overheads=90+(30*1/2)=105

U nit nit costs: Material

1350,000/120=11250

Labor

90000/105=857.1428571

FOH

91700/105=873.3333333

Loss Loss adjustment: unit lost*unit cost of previous dept/available number of units 10*5680.714291/120=473.3928576

Frame Ass Assembling: This

is the last step in the manufacturing process of motorcycle. In this

process the framing of the motorcycle takes place and all the parts of the motorcycle are combined by labor energy. energ y. The framing consists of 12 steps. The

motorcycle frame is composed almost completely of metal, as are the wheels.

overlaid with plastic.

The

tires are composed of rubber.

The

The

frame may be

seat is made from a synthetic

substance, such as polyurethane. The power system consists of a four-stroke engine, a carburetor to transform incoming fuel into vapor, a choke to control the air-fuel ratio, transmission, and drum

brakes.

transmission

The

system

contains a clutch, consisting of steel ball flyweights and metal plates, a crankshaft, gears, pulleys, rubber belts or metal chains, and a sprocket.

The

electrical

system contains a battery,

ignition wires and coils, diodes, spark plugs, head-lamps and taillights, turn signals and a horn. Wheels, brakes, wiring cables, foot pegs, exhaust pipes, seats, saddlebags, lights, radios, and hundreds of other parts are installed on the motorcycle frame.







Rs25/-per hour

For 45 Labors =

Rs1125/-per hour



remaining 15 are working as indirect labors. These 5 people includes

 6 Supervisors.  4 Sweepers.  5 The people who are working on the rolling machine for shifting of material.


Rs25/-per hour

For 5 Labors =

Rs125/-per hour


Mat erial:

There

materials for this department are



Tires

Rs850/-



Four-stroke engine

Rs10000/-



Carburetor

Rs30/-



Choke

Rs150/-



Air-fuel ratio

Rs75/-



Drum Brakes.

Rs650/-



Clutch.

Rs150/-



Crankshaft.

Rs400/-



Gears.

Rs350/-



Pulleys.

Rs250/-



Sprocket.

Rs125/-



Rubber belts.

Rs100



Metal chains.

Rs800/-



Battery

Rs320/-



Ignition wires.

Rs80/-



Coils.

Rs225/-



Diodes.

Rs175/-



Spark plugs.

Rs40/-



Head-lamps.

Rs60/-



Taillights.

Rs320/-



Turn

Rs80/-



Horn.

Rs120/-



Brakes.

Rs125/-



Wiring cables.

Rs425/-



Foot pegs.

Rs200/-



Exhaust pipes.

Rs150/-



Seats.

Rs600/-

Total

signals.

Cost of the direct material=

Rs16850/-

If we we are going to produce 150 units then the cost will be Rs2527500/-


indirect material and cost for this are



Seat and Paper Cover

Rs50/-



Factory Supplies.

Rs12000/-




Rs2500/-



Electric Power.

Rs8000/-



Fuel.

Rs4500/-




Rs2000/-



Insurance. (Fire)

Rs9000/-



Water

Rs1000/-

Factory Over Head =

Rs39000/-


Rs2527500/-

Direct Labor

Rs270000/-

Factory Over H ead

Indirect Material

Rs7500/-

Indirect Labor

Rs30000/-

Factory Supplies.

Rs12000/-


Rs2500/-

Electric Power.

Rs8000/-

Fuel.

Rs4500/-


Rs2000/-

Insurance. (Fire)

Rs9000/-

Water

Rs1000/-

Factory over head

Rs76500

otal T otal

Rs2874000/-


(for 150 units)

Cost of Production R e port:

HONDA Assembling department Cost of production report


received from previous dept.

90

Units


45

Units

still in process (all material,2/3 of conversion cost)

35

Units

lost in process (1/2 of material and conversion cost) 10

Cost charg ed to t he he d e partment: Total Transferred


cost

Unit cost

1722112.501 19134.58334

Cost added by department: Material

2527500

29735.29412

Labor

270000

3681.985545

90

FOH Total

76500 cost to be accounted for:

1043.229238

4596112.501 53595.09224

Cost account ed for as follows: Transferred

to the next department (45*53595.09224) =2411779.151

Loss adjustment = 363632.3779

Work in process-ending inventory: Adjusted cost from preceding dept. (35*19134.58334) =669710.4169 Material (35*100%*29735.29412) =1040735.294 Labor (35*2/3*3681.985545) =85912.99605 FOH (35*2/3*1043.229238) =24342.01555 Total

cost accounting for

=1150990.306

4596112.501

Additional Additional computations:

Equival Equival ent production: Materials=45+ (35*100%) + (10*1/2)=85 Labor=45+ (35*2/3) + (10*1/2)=73.33 Factory over heads=45+ (35*2/3) +(10*1/2)=73.33

Loss Loss adjustment: Loss from previous dept. (10*19134.58334) =191345.8334 Material (10*1/2*29735.29412)

=148676.4706

Labor (10*1/2*3681.985545)

=18409.92773

FOH (10*1/2*1043.229238)

=5216.14619

Total

=363632.3779

Loss adjustment

Pr e-Delivery I nsp nspection (PD I) (PD I)::

At the end of the assembly line, the pre-delivery inspection takes place in which inspectors undertake a visual inspection of the motorcycle's painted finish and fit of parts.

The

inspectors also feel the motorcycles with gloved hands to detect any bumps or defects in the finish. Each motorcycle is tested on a dynamometer. Inspectors accelerate the motorcycle from 0-60 mph. During the acceleration, the "dyno" tests for acceleration and braking, shifting, wheel alignment, headlight and taillight alignment and function, horn function, and exhaust emissions. After the dyno test, a final inspection is made of the completed motorcycle.

Stor e Room: After inspection the finished goods are sent to the store room and then from there these are shipped to the customers custo mers from where these are demanded.

Cost of Good Sold Stat ement: Number

of unit = 150

Honda Cost of Good Sold Statement Opening balance of raw material = 1525000/Purchases

=225000/-

Local purchases

=450000/-

Transportation

=150000/-

Net

in

purchases

Material available for use

=825000/=2350000/-

Closing balance of raw material =714000/Direct Material Consumed

=1636000/-

Direct Labor

=100042.50/-

Factory Over Head

=93957.50/-

Indirect Material (Paint)

=10000/-

Indirect Labor

=75044.50/-

Light and Power

=69938/-

Machinery Deep.

=60017.5/-

Total Production

Cost

=2045000/-

Opening balance of raw material =590000/Closing balance of raw material =945000/Opening balance of finished goods= 65891000 Closing balance of finished goods = 640000 COGs

= 7941000

P er unit Cost: Total

number of unit produced = 150

COGs Per Unit

=7941000/Cost =7941000/150 =52940/-

Re f er ences: http://www.honda.com Motorcycl e.html www.madehow.com/Volume-4/

W e

also visited metro industry to get in f ormation.

production process of honda motor cyle..with CPR by students of university of Gujrat

Recommend Documents