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- Title
An Analysis of Raw Material Cost in Indian Manufacturing Industry.
- Authors
Bhanawat, Shurveer S.
- Abstract
The rapid growth of automation due to information technology has changed the scenario of cost structure in the manufacturing industry. The main challenge confronting the manufacturing industry is the increase in the cost of production. The main factor which contributes to the cost of production is the cost of material. An attempt has been made in this paper to analyze the share of raw material cost in the cost structure of the manufacturing industry. A sample of 58 companies engaged in manufacturing activities was selected for the purpose of the present study. The sample covers pharmaceutical, textile, cement, metal, oil, automobile, consumer goods and electrical industries. A null hypothesis-there is no significant difference among different sectors of the Indian manufacturing industry regarding raw material cost as percentage of gross sales-was constructed. After analyzing the ratios, chi-square test was administered to check the hypothesis. The study results reject the hypothesis. The results also reveal that, on an average, raw material cost as percentage of gross sales is 46.46% for the Indian manufacturing industry.
- Subjects
INDIA; COST structure; RAW materials; MANUFACTURING industries; TREND analysis; INDIAN economy
- Publication
IUP Journal of Accounting Research & Audit Practices, 2010, Vol 9, Issue 3, p65
- ISSN
0972-690X
- Publication type
Article