Discussion Unit 2

Managerial Accounting
Bata Shoe Bangladesh

The Bata Shoe Organization was founded in 1894 by Czech businessman Tomas Bata in the city

of Zlin, what was then Czechoslovakia. Coming from a family of shoemakers with a long

heritage of eight generations and over three hundred years, Tomas Bata capitalized on

knowledge, expertise and skills to propel his newly founded company forward. The introduction

of factory automation, long distance retailing and modernized shoe making ensured the

profitability of the company from the very beginning. It is now the world’s largest manufacturer

and marketer of footwear operating across the globe.

Since its founding, Bata has been at the forefront of innovation; not only in the production and

design of new styles, but in the creation of business models that permit a quick response to the

ever-changing wants and needs of our customers. As a result, Bata enjoys a long history as a

leading manufacturer and retailer of quality footwear, and proudly serves some one million

customers each day.

Product: Only Shoes

Financial Statement: https://www.batabd.com/pages/financial-info

Costs of goods manufactured it incurs:

1. Direct materials cost: Cost of materials consumed:

A. Imported : Variable (subject to the condition of exchange rate)

B. Local Purchase : Variable (subject to the condition of exchange rate)

2. Direct labor:

A. Direct wages : Fixed (According to the contract and policy)

So Prime costs= A+B.

3. Manufacturing overhead:

 Remuneration to employees : Fixed (According to the contract and policy)

 Gas, water and electricity : Fixed (for connection charge) Variable (Depend on uses)

 Repairs and maintenance : Variable (Subject to the condition of volume of work)

 Insurance : Fixed

 Uniform to workers : Fixed

 Health and other welfare expenses: Variable (Subject to the condition of turnover of

employee)

 Travelling : Mixed

 Postage : Mixed

 Stationary : Mixed

 Entertainment : Variable

 Depreciation : Variable

From the following definition anybody can come for concrete solution regarding the

categorizations of the following manufacturing costs.

A mixed cost is a cost that contains both a fixed cost component and a variable cost component.

A fixed cost is defined as expenses that do not change as a function of the activity of a business,

within the relevant period. For example, a retailer must pay rent and utility bills irrespective of

sales.

A Variable cost increase or decrease depending on a company's production volume;

Manufacturing costs are the costs incurred during the production of a product.

The costs are typically presented in the income statement as separate line items.

References

https://www.batabd.com/pages/financial-info

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