Reliance Digital Case Study

The person from whom I have obtained the following information is Mr Charan Cardoza, Manager of Reliance Digital, Mangalore, Karnataka.

INTRODUCTION

Reliance digitals is a retail shop which sells digital products. Over 4000 products can be obtained from this outlet. The products are from over 150 national and international brands. Reliance Digitals is known for its high customer satisfaction quality. Along with customer satisfaction, it is also known for its ambience and has made it one of the top digital retail stores in India. Reliance Digitals has a unique feature which makes it different from its competitors i.e. ‘ResQ’. It is an advisory and post sales service team who provides the customer a complete product life cycle.

Reliance Digitals

In business, cost is usually a monetary valuation of effort, material, resources, time & utilities consumed, risks incurred, opportunity foregone in production & delivering of goods or services. All expenses are costs but not necessary all costs need to be expenses. Example, Acquisition of an income generating asset.

Important Methods of Costing used by Reliance Digitals:

Reliance Digitals mainly follows the operations method of costing. Operations play a important role in Reliance Digitals. It also uses operating costing and multiple costing. As it is a service based company, it gives more importance to day to day activities or sales.

Operations Costing:

There are various processes within a company or any industry, and each process consists of various operations. In this approach of costing, cost of each operation is calculated rather than the process as a whole. Cost sheet is prepared to find out cost per unit and the profit or loss on the production is determined.

Operating Costing:

This method of costing is more prominent in service industries, and since Reliance Digitals is one among them it also follows this method of costing. In this approach cost of a service is

In this technique a budget is prepared for future period. It helps in planning and controlling the costs based on the budget prepared. In Reliance Digitals a budget is prepared at the beginning of the year, and then at the end of the year all the costs incurred are calculated and compared with the budget done initially. If the calculated values at the year end are within the budget prepared then the company is said to have made profits, and if it exceeds the budget plan then the company is said to have incurred loss.

Types of Costs:

Fixed Costs: Fixed Costs cannot be changed with the output. Whether the output changes or remains the same, the fixed costs remains constant.

Variable Costs: Variable Costs depends on the output produced. If the output produced increases the variable cost also increases and likewise when the output decreases the cost also decreases.

Marginal costs: Marginal Cot is incurred whenever an extra unit of a product is produced.

Opportunity Costs: Opportunity cost is the cost incurred for producing the best