COST ACCOUNTING REPORT

VISIT OF INDUS PENCILS INDUSTRIES (Pvt) Ltd

DEER PENCILFACTORY

SUBMITTED TO: Sir Muhammad Asif

SUBMITTED BY:

HASHAM-BIN-SHEHZAD

AJAY PARMAR

VINOD KUMAR

RAFAY
 LETTER OF ACKNOWLEDGEMENT
Thanks to the God Almighty, who gave us strength & knowledge to
complete this assignment. This assignment is a part of our course “COST
ACCOUNTING”.

I along with my group members would like to express my gratitude and

thanks to our lecturer MR. MUHAMMAD ASIF; for arranging this industrial
visit and for giving us opportunity to complete and fulfill this assignment.
He gave us moral support and guided in different matters regarding this
topic. We thank him for his overall support.

We are also thankful to everyone who all supported us, for that we have
completed our report effectively and moreover on time. They gave us many
tips which helped us in preparing this assignment.
Contents
EXECUTIVE SUMMARY .......................................................................................................................... 1
INTRODUCTION ........................................................................................................................................ 2
PRODUCTS.................................................................................................................................................. 3
PENCIL ....................................................................................................................................................... 3
RAW MATERIALS: .................................................................................................................................. 3
PROCESS OF MANUFACTURING: ........................................................................................................... 4
ERASERS & SHARPENERS .......................................................................................................................... 8
Other Production Departments: ................................................................................................................... 9
Molding Department: ............................................................................................................................... 9
PENS ........................................................................................................................................................ 10
INK DEPARTMENT: .................................................................................................................................. 11
WAREHOUSING: .......................................................................................................................................... 12
 EXECUTIVE SUMMARY

An Industrial visit to INDUS PENCILS INDUSTRIES Pvt. Ltd., B-54, Manghopir Rd,
Sindh Industrial Trading Estate, Karachi City, Sindh. It was organized by our Cost
Accounting Lecturer Mr. Muhammad Asif, on Friday 7th December 2018.
BBA 4-G students and one faculty visited to INDUS PENCILS INDUSTRIES Pvt. Ltd. A
site visit to see the raw material to finished goods process, to see and interact
with the production Industry to understand production & manufacturing system,
factory organizing, current market scenarios, labor sectors. In this visit students
were very eagerly waiting for listening to industrial higher authorities. Students
were divided into different batches for the visit and interact with the industry
person. The Factory Manager of INDUS PENCILS INDUSTRIES Pvt. Ltd. conducted
very informative session for the students. He guided the students to different
areas in the factory from, raw material process department to pencil making
department, molding department, ball point pen making department, eraser
making, pointer making, board markers and colored pencil making department
etc. Finally he gave a brief introduction of INDUS PENCILS INDUSTRIES Pvt. Ltd. to
the students.

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 INTRODUCTION
Indus pencil industries (Pvt) Ltd., was established in 1955. Since its inception the
company has focused on manufacturing quality products with special focus to its
customers. “Deer” Brand of the company is the leading brand in Pakistan. This
company is being led by the fourth generation of their owners. In this company
there are almost 700 employees both males and females either permanent or
part time. It is one of the largest industries based in Karachi.

Initially company started with the manufacturing of pencil and later on expended
its product range.
The present products range includes:

 Black Lead pencils

 Colored pencils
 Fiber-tip-pens
 Ball point pens
 Erasers
 Geometry box
 Crayons
 Markers
 High-lighter
 Finger paints
 Writing instruments
 Mathematical instrument sets
 Water color sets
 Poster colors

Their Products are exported to USA, Europe, Turkey, Egypt, Iran, UAE, Saudia-
Arabia, Germany, Kuwait, Bahrain, and South America. They assure for best
quality stationary to their customers in all over the world.

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 PRODUCTS
PENCIL
Pencils are one of the primary products of Deer brand, initially the company
started with the manufacturing of pencils in 1955. They have categorized their
pencil making process into different types. Most of the pencils manufactured in
the factory are wood cased black lead, poly-wood (polymer) black lead and wood
cased color pencils, poly-wood (polymer) color pencils. They make pencils with
and without rubber tips.

RAW MATERIALS:
The raw materials used for making deer pencils are Plywood (polymer) or plastic,
Wood and Graphite commonly known as lead. Pencil has two layers Outer layer
which is made up of plastic or wood, and the inner layer incased in the outer layer
is lead. For the outer layer, eight chemicals and pure plastic polymers are used.

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The outer layers of pencils are given different colors. For lead, twelve chemicals
are used. For color pencils, different dyes and pigments are added instead of lead.

PROCESS OF MANUFACTURING:
The process of manufacturing pencils and color pencils in Deer Industries is very
streamlined and divided into different departments. Department wise production
system has been very effective an efficient and has worked leaps and bounds for
the Deer industries.

Department 1: Raw Material Processing

The first step of any production department starts from raw material. In pencil
making process different types of polymers (plastics) are mixed in a giant mixer.
After mixing those for 15 minutes are then transferred for heating in scoders.
Lead mixed with wax are placed in separate scoders fully heated, is then in a
single mold pencil comes out of the machine in a string like structure melted and
very hot. It is then moved from water to cool the temperature of polymer and
lead pencil. At the end of one side of machine a cutter is fixed which cuts the
pencil in precise lengths and the process is repeated.

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Polymer in Mixing Process Lead and Polymer heating

Pencil being cooled in water Pencil in cutting machine

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 Finished product in the factory

Department 2: Sorting

After processing is complete these pencils are then sorted out. The defective ones
are separated and rest are put move to packaging department. We saw different
women sorting out the pencils. As there are many different types of pencils
manufactured in the factory so they are sorted according to types. Pencils are
moved in opened boxes to the packaging department.

Sorting by hand 6
 Women and men sorting pencils

Department 4: Packaging Department

The packaging department in which the pencils after being, separated from
defective ones are packed. The department had women who were preparing the
boxes in which the pencils were to be packed. Other women were stamping the
dates on the boxes and then they were putting the pencils in the boxes. The
boxes after being packaged are ready to be sent to stores.

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ERASERS & SHARPENERS

Erasers and Sharpeners are made in separate department and are attached to
some kind of pencils. Erasers are made from rubber polymers and sharpeners are
made from metal alloys and plastic. Melted polymer is put in hopper and after
given shape of long rectangle string and then moved through water to give them
definite shape. After this eraser string is moved through cutting machine. These
are cut in precise rectangle shape and then moved to the sorting and packaging
desk in an assembly line formation.

Rubber polymer in water to cool 8

 Precise cutting of Erasers

Other Production Departments:

Aside from pencil, we saw the manufacturing of other materials like Board
Markers, Ball-point Pens, Fountain/Ink Pens, Poster colors, Water colors, Ink
bottles etc.

The departments involved in the production of these other materials are

explained as follows:

Molding Department:
All the products that use the plastics are started in molding department. The
molding department makes caps and body of pens and markers and ink bottles.
Polystyrene and other plastic pallets are put into a large hopper that processes
them, and then plastic is molded into the required shapes and cooled down.
After this process, the material is put into injection molding machines which
injects the molded pieces. The pieces are dried and then they are separated. And

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the remaining material is then recycled and the process is repeated. More than 32
sets are made at a time in the molding machine.

Molding Machines

PENS
In this department of Deer factory a variety of pens are made, under the Deer
brand different types of pens are manufactured like Pointers, Ball-point Pens, Ink
Pens, and Gel Pens etc. After the molding machine molds the plastic into the body
of the pen then another machine puts the rifle in, then the next machine inserts
the nip and then it is transferred to the ink filling department.

Different Pens
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INK DEPARTMENT:
Ink is filled in this department. Assembly line feature is used in this department. A
number of employees all have separate jobs, one set the empty bottles in line the
next one fills it and third one screw the caps with the help of machine. The ink is
also filled in the bottles for ink pen and those bottles are purchased as raw
material as well. The ink is filled in 10 ml bottles and then the bottles were
labeled as DEER INK. They do not make the ink themselves, they purchase it. Then
ball point or the nip of the marker is attached with the ink reservoir. After that ink
bottles are sent to packaging department.

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 Ink filling Assembly line

WAREHOUSING:
In factories there is on big storage space left for a warehouse. Deer Factory has a
very big ware house to house all their products in a single space. All the products
after been through all the processes of production are packaged and dated and
shift to the finished good ware house. Finish goods inventory is then debited.
There are different sides I the warehouse as most of their products are exported.

Domestic and foreign finished goods are separated and shipped according to their
delivery date to all over Pakistan and exported internationally.

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 Warehouse

______________________________THANK YOU___________________________

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