Accounting Slides Final

7/31/2019 Accounting Slides Final

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NCBA&E


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Group Members

Saqib Iqbal

Faizan Anjum

Malik ZeshanSadaf Naeem


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HISTORY OF GUL AHMED

The Gul Ahmed Group began trading textiles in the early20th century

In 1953, the group decided to enter the field ofmanufacturing under the name Gul Ahmed Textile Mills

Limited, and was incorporated as a privately limitedcompany.

In 1972, it was listed on the Karachi Stock Exchange.

The mill is presently a composite unit with an installed

capacity of 130,000 spindles, 250 wide jet looms, 297conventional looms, and a state-of-the-art processingand finishing unit.


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Mission Statement

To deliver value to customers through

innovative

technology and teamwork.

Fulfilling social

environmental

responsibilities.


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Vision Statement

Gul Ahmed has a vision of becoming a green

company that is environment friendly and socialy

responsible

To accomplish this Gul Ahmed takes several

initiatives, these are installation of effluent

treatment plant being ISO SS 800

Company also Setting trends globally in the textile

industry. Responsibly delivering products and

services to our customers.


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Gul Ahmed mills use the following

costing system

Gul Ahmad textile mills limited use job order

costing that means it measures separately the

cost of each job. job order costing is used by

gul Ahmad textile because their product is not

homogenous. In a job costing system, costs

may be accumulated either by job or by batch.


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CGS Statement

2010 2009

DM used 5674362 4563728

DL used 3546578 221810

MOH 1123456 987654

TMC 10344396 5773192

Add Beg WIP 9400 8509

Less End WIP 9685 8600

CGM 6105441 4500632

Add Beg F/G Inv 1032410 1632219Less End F/G Inv 949151 876543

CGS 16,515,934 11,547,856


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EXPLANATION

It is clearly seen from above table that the cost ofgoods sold is showing an increase from 2009-2010.

The increase in total manufacturing cost is due to

increase in indirect costs related manufacturing ofunits. One of the main reasons of the overall

Increase in cost of goods sold of the company from2009 to 2010 is due to the inflationary pressure in

the economy in this time period.


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Break even Analysis

The Breakeven analysis is a measure used to check

companys alarming sales or units sales level

Formula

Breakeven Point = Fixed Costs/(Unit Selling Price -Variable Costs)

It portrays the level at which the company is at a

position of paying itself. Thus this motivates and allowsthe management of the company that how much they

should now be working hard to strive and how much

they need to work to increase their margin of safety.


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Break even sales

2010 2009

Sales 19,688,794 13,906,465

Variable cost 16,515,934 11,547,856

Fixed cost 1,545,146 1,172,352

Contribution

margin

16% 16%

Break even sales 96571.625 73272


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EXPLANATION

Gul ahmad textile mills the breakeven analysis

suggests that the companys breakeven sales

has increased from the year 2009 to 2010 due

to rise in their Net sales which contributed to

higher breakeven sales.


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Contribution margin

Contribution margin focuses on variable costs!because they're the ones that change and are farmore unpredictable. And that makes them harder

to control and predict. In other words, fixed costs

are known. contribution margin is a profit measure that looks

at how your company is managing those ever-

changing variable costs! And because

management is responsible for keeping costsunder control, contribution margin is a way to

gauge how well management is doing


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Continued

Contribution margin=

Contribution margin is 16% for both years.gulahmad has a constant contribution margin of

16 % for the year 2009 and 2010.


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conclusion

With the help of aforesaid discussion it is clear

that Gul Ahmad textile is making huge profits

every year. The reason behind its success is its

brand equity.gul Ahmad never compromise on

quality. Therefore its sale are increasing day by

day along with the increase in its revenues.

Breakeven sales of Gul Ahmad increased from2009 to 2010 due to increase in its sales.


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Documents

Accounting Slides Final