Cost Accounting Raymond Case Study

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Table of Contents

1. The Raymond Group – An Introduction.............................................................................2 2. Applications ........................................................................................................................5 2.1. FLUCTUATIONS IN RAW MATERIAL PRICES..................................................5 2.2. DECISION REGARDING LOCATION...................................................................7 2.3. Fixing of SALE price using Break Even Point Analysis...........................................9 2.4. MAKE OR BUY DECISION – POWER ................................................................11 2.5. MANUFACTURING DECISION FOR RETAIL GARMENTS/SUITINGS ........13 2.6. Export Price Fixing ..................................................................................................15 3. Acknowledgements...........................................................................................................16 4. Bibliography .....................................................................................................................16

1. The Raymond Group – An Introduction

The Raymond group was incorporated in 1925 and has now grown into a Rs.1400crore plus conglomerate with highly diversified business interests. The group businesses include Textiles, Readymade garments, Engineering files and tools, Prophylactics and Toiletries. The group is a leader in textiles, apparel and files and tools in India. The group is divided into the following companies: Raymond Ltd. – This Company has five divisions comprising of: •

Raymond Textile – This is the flagship of the Raymond group. With a capacity of 25 million meters of high-value pure wool, wool-blended & premium polyester viscose suiting along with half a million blankets and shawls, Raymond Textiles is the world’s third largest integrated manufacturer. It is India’s leading producer of worsted suiting fabric. It enjoys a 60% market share in India. It further exports its suitings to more than 50 countries including the USA, Canada, Europe, Japan and the Middle East. All its products are marketed under the flagship brand "Raymond". Products are distributed through about 310 exclusive retail shops in India and surrounding countries, 30,000 multi-brand retail outlets and over 100 wholesale distributors.



Denim – set up in 1996 produces 20 million meters of differentiated Ringspun denim per annum. It is one of the world’s very few specialized manufacturers of fancy denims focussing on niche products for the world’s leading Jeans-wear brands. It supplies denim to trendsetters like Levis, Pepe, Zara, Gap, Tommy Hilfiger, Lee Cooper and AZDA amongst others.



J.K Files & Tools - The Engineering Files & Tools division is the world’s largest producer of steel files with 90% market share in India and about 30% market share in the world.



Be: - The Designer Wear division is an exclusive pret-a-porter range that houses designs by some of the finest Indian designers like Rohit Bal, Raghavendra Rathore, Rajesh Pratap Singh, Priyadarshini Rao etc. Be: offers an eclectic mix of formal,

office and evening wear for men and women, in western, ethnic and fusion styles along with accessories. •

Million Air - The Aviation division was launched in 1996 to provide air charter services aimed mainly at the corporate travel segment. It has a regular clientele of over 421 top companies in India and abroad. The division operates a fleet of three helicopters and one executive jet.

Raymond Apparel Ltd. – This Company has three highly esteemed menswear brands in its portfolio: •

Park Avenue – It is one of the most respected brands in the formal menswear category in India. It provides complete wardrobe solutions for men with a collection of suits, jackets and trousers. Its product portfolio includes: Shirts, Trousers, Suits, Jackets and Accessories.



Parx – launched in 1999, this is...
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