With help of two suitable example, Explain following concept under operating costing in case of a transporter (Hotel / Hospital)
Solution:-
1. Fixed Cost / Standing Cost, Variable Cost. Absolute tonne km, Commercial Tonne Km.Effective passenger km.
2. Decision making
3. Integral accounting system
4. Non - Integral Accounting System
Here are the steps to solve this problem:
2. The activity rates are computed as:
Assembling units: AED. 280,000/1,000 units = AED. 280 per unit
Processing orders: AED. 310,000/250 orders = AED. 1,240 per order
Supporting customers: AED. 100,000/100 customers = AED. 1,000 per customer
Activity-Based Costing System 26
3. The table showing overhead costs for VB's 80 units and 4 orders is:
Description Amount (AED.)
Direct materials cost (80 units x AED. 180) 14,400
Direct labor cost
Bangalore University - M.Com III semester : Accounting & Taxation specialization : Subject : Accounting For Managerial Decisions - Performance Measurement System - Theory with Examples.
Transfer Pricing
Objectives of Transfer Pricing
Methods of Transfer Pricing
Cost Based Transfer Pricing
Market Based Transfer Pricing
Negotiated Transfer Pricing
Advantages and Disadvantages
The document discusses marginal costing and its advantages for managerial decision making. Marginal costing involves separating variable and fixed costs. It allows companies to determine contribution margins, break-even points, and margins of safety to aid in decisions around pricing, production levels, and profitability. The key advantage is it focuses on the impact of changes in output on profits. Some disadvantages are it understates inventory values and fixed costs are excluded from short-term decision making.
The cost of goods sold (COGS) represents the direct costs attributable to the production of goods sold by a company. It includes the cost of materials and direct labor to produce goods, but excludes indirect expenses like distribution costs. COGS is calculated by taking the beginning inventory, adding purchases, and subtracting the ending inventory. It is a key figure that appears on the income statement and is deducted from revenue to calculate gross margin. For manufacturers, COGS also includes costs like factory overhead and labor involved in the production process.
This document discusses job costing and batch costing. Job costing involves compiling costs for specific quantities of goods or services produced according to a customer's order. Costs are accumulated separately for each job. Batch costing is used when a company produces goods in batches for stock. The cost per unit is determined by dividing the total batch cost by the number of units in the batch. The document outlines the key features, objectives, advantages, and disadvantages of job costing as well as providing examples of job cost sheets and how to calculate economic batch size.
This presentation covers Accounting of Services and Operations like - Cinema Hall, Canteen, Hospital, Transport, Costing etc.
an important part in MBA Financce
Marginal costing is an alternative to absorption costing. Under marginal costing, only variable costs are charged as cost of sales and contribution is calculated. Fixed costs are treated as period costs. Contribution is the difference between sales revenue and variable costs, and it goes towards recovering fixed costs and generating profit. The key principles of marginal costing are that fixed costs do not change with volume, so increasing or decreasing sales only impacts profits by the amount of the variable cost per unit. Inventory is valued at marginal/variable cost under marginal costing.
Here are the steps to solve this problem:
2. The activity rates are computed as:
Assembling units: AED. 280,000/1,000 units = AED. 280 per unit
Processing orders: AED. 310,000/250 orders = AED. 1,240 per order
Supporting customers: AED. 100,000/100 customers = AED. 1,000 per customer
Activity-Based Costing System 26
3. The table showing overhead costs for VB's 80 units and 4 orders is:
Description Amount (AED.)
Direct materials cost (80 units x AED. 180) 14,400
Direct labor cost
Bangalore University - M.Com III semester : Accounting & Taxation specialization : Subject : Accounting For Managerial Decisions - Performance Measurement System - Theory with Examples.
Transfer Pricing
Objectives of Transfer Pricing
Methods of Transfer Pricing
Cost Based Transfer Pricing
Market Based Transfer Pricing
Negotiated Transfer Pricing
Advantages and Disadvantages
The document discusses marginal costing and its advantages for managerial decision making. Marginal costing involves separating variable and fixed costs. It allows companies to determine contribution margins, break-even points, and margins of safety to aid in decisions around pricing, production levels, and profitability. The key advantage is it focuses on the impact of changes in output on profits. Some disadvantages are it understates inventory values and fixed costs are excluded from short-term decision making.
The cost of goods sold (COGS) represents the direct costs attributable to the production of goods sold by a company. It includes the cost of materials and direct labor to produce goods, but excludes indirect expenses like distribution costs. COGS is calculated by taking the beginning inventory, adding purchases, and subtracting the ending inventory. It is a key figure that appears on the income statement and is deducted from revenue to calculate gross margin. For manufacturers, COGS also includes costs like factory overhead and labor involved in the production process.
This document discusses job costing and batch costing. Job costing involves compiling costs for specific quantities of goods or services produced according to a customer's order. Costs are accumulated separately for each job. Batch costing is used when a company produces goods in batches for stock. The cost per unit is determined by dividing the total batch cost by the number of units in the batch. The document outlines the key features, objectives, advantages, and disadvantages of job costing as well as providing examples of job cost sheets and how to calculate economic batch size.
This presentation covers Accounting of Services and Operations like - Cinema Hall, Canteen, Hospital, Transport, Costing etc.
an important part in MBA Financce
Marginal costing is an alternative to absorption costing. Under marginal costing, only variable costs are charged as cost of sales and contribution is calculated. Fixed costs are treated as period costs. Contribution is the difference between sales revenue and variable costs, and it goes towards recovering fixed costs and generating profit. The key principles of marginal costing are that fixed costs do not change with volume, so increasing or decreasing sales only impacts profits by the amount of the variable cost per unit. Inventory is valued at marginal/variable cost under marginal costing.
come and join AFTERSCHOOOL and change the world of millions of people. Raise your voice for truth, honesty, values and work to change the world - use fair means to become an entrepreneur
Marginal costing is a technique that uses the concept of marginal cost, which is the change in total cost from producing one additional unit. It involves separating total costs into fixed and variable costs. Contribution margin is the difference between selling price and variable cost per unit, and shows the amount available to cover fixed costs and generate profit. Cost-volume-profit (CVP) analysis examines how costs, revenue, and profit change with production volume. It can be used to determine the break-even point and plan production levels required to achieve profit targets. Managers use CVP to make decisions about pricing, production, investment, and financing.
1.1 identify the type of accounting
1.2 difference between Cost Accounting , Cost Accountancy and Costing
1.3 understand the Management information needs
1.4 identify the objectives of cost accounting
1.5 difference between Cost Accounting Vs. Financial Accounting
1.6 identify the role of cost accountant
The document discusses the components and computation of a cost sheet. It explains that a cost sheet tracks direct material costs, direct labor costs, direct expenses, factory/works overhead costs, office and administration overhead costs, and selling and distribution overhead costs. It provides a template for a cost sheet showing accounts for materials consumed, direct labor, prime costs, factory costs, production costs, cost of goods sold, and sales. It then provides an example cost sheet with specific costs to populate the template for a company.
Cost Volume Profit (CVP).
Introduction
Fixed costs
Variable costs
Semi variable costs
Contribution margin
Break even point
PV Ratio
BEP ANalysis.
break even point
Cost-volume-Profit.
Overhead refers to indirect costs that cannot be traced to a specific product or service. There are various types of overheads that must be classified. The major steps in overhead accounting are to collect overhead details, distribute overhead to cost centers, and reapportion service department costs to production departments. Common bases for apportioning overhead include direct allocation, direct labor hours, and direct wages. Methods of reapportionment include the direct redistribution and step methods. Absorbing overheads involves allocating overhead expenses to cost centers or cost units using absorption rates. Under or over absorption of overhead can occur depending on actual overhead costs versus absorbed costs.
The document discusses capital structure and its theories. It defines capital structure as the proportion of long-term debt and equity used to finance a company's assets. A company's capital structure determines its risk and cost of capital. There are several theories on capital structure including the net income, net operating income, traditional, and Modigliani-Miller approaches. The optimal capital structure balances minimum costs and risks. Factors like tax rates, control, flexibility, and legal requirements influence a company's choice of capital structure.
Accounting for Price Level Changes/ Inflation AccountingLucky
This document discusses accounting for price level changes and inflation accounting. It covers the concepts, methods, advantages, objectives, and important adjustments required. The main methods discussed are the current purchasing power method, replacement cost accounting method, current value accounting method, and current cost accounting method. The objectives of inflation accounting are to show true results and financial position in current values and ensure funds for asset replacement. Advantages include recognizing changes in money value and ensuring reported profits reflect economic reality.
Standard costing involves establishing predetermined estimates of the costs of products or services, collecting actual costs, and comparing actual costs to the estimates. Standards are set for materials, labor, overhead, and selling prices/margins based on historical data, task analysis, and production process analysis. Material and labor standards consider factors like supplier prices, wage rates, and efficiency levels. Overhead standards may be based on a rate per labor hour. Comparing actuals to standards highlights variances that need management attention to control costs.
Economic Value Added (EVA) is a metric developed by Stern Stewart & Co. in 1982 to evaluate business strategies and maximize long-term shareholder wealth. EVA is defined as net operating profit after taxes (NOPAT) minus the cost of capital. To calculate EVA, a company determines its NOPAT, weighted average cost of capital (WACC), and capital employed to see if it is generating returns above its cost of capital and creating economic value. EVA aims to align managerial decisions with shareholder interests.
The document defines various types of variances that can occur in cost accounting, including material, labor, and overhead variances. It provides formulas to calculate variance amounts and examples showing how to compute variances based on standard and actual costs. Variances are classified into price, usage/efficiency, and mix categories and can be favorable or unfavorable depending on whether actual costs are lower or higher than standards.
Standard costs are developed using formulas, supplier lists, or time studies and compared to actual costs to calculate variances which should be investigated if significant, with variances for direct materials including price, quantity, mix and yield and variances for direct labor including rate, efficiency, mix, yield and idle time.
Cost-volume-profit (CVP) analysis examines how changes in volume, costs, and prices affect profits. It is used for managerial decisions like pricing, order acceptance, product promotion, and feasibility analysis. CVP analysis uses techniques like contribution margin analysis and break-even analysis under assumptions like linear revenues and expenses. Questions address profit levels at different volumes, the volume where costs equal revenues, and the effects of cost/price changes on profits.
The document summarizes financial statement analysis. It discusses the objectives of financial statements which are to provide information for economic decisions, about financial position, performance, and changes in financial position. It then defines financial statement analysis as studying relationships among factors disclosed in statements. Analysis allows evaluation of a firm's position and performance. Objectives of analysis include judging financial health, profitability, debt capacity, and solvency. Types of analysis include external, internal, horizontal, and vertical. Methods include common size statements, comparative statements, trend ratios, and ratio, funds flow, cash flow, break-even, and value added analysis.
Process costing is a method used by manufacturing industries to calculate the cost of production at each stage of converting raw materials into finished goods. It involves allocating total manufacturing costs to products based on normal production levels. Process costing is used in industries like chemicals, textiles, steel, and sugar that involve sequential production processes with continuous flow of goods. The method determines an average cost per equivalent unit and helps control costs, calculate inventory values, and assign product prices at each stage of multiple processes.
The document provides an overview of financial statement analysis. It discusses that financial analysis identifies the financial strengths and weaknesses of a firm by establishing relationships between balance sheet and profit/loss statement items. The key objectives of financial analysis are to evaluate a firm's profitability, debt servicing ability, business risk, and growth. Various techniques of financial analysis are also outlined, including comparative statements analysis, common-size analysis, trend analysis, and ratio analysis. The document aims to explain the concepts and applications of financial statement analysis.
The document discusses cost sheets, which break down the total costs of producing a product into various components. It explains that cost sheets are used to determine accurate product costs, fix selling prices, compare costs over time for cost control, and help with decision making. The document then defines different types of costs like fixed, variable, operating, and direct costs. It also outlines the components that make up total cost, such as prime cost, factory cost, office cost, and discusses how to calculate costs like material consumed. Finally, it provides an example of the information needed to prepare a cost sheet statement.
This document discusses transfer pricing, which refers to the price at which divisions within a company transact with each other. It provides definitions of transfer pricing and outlines some key issues like how transfer prices impact revenue and influence whether managers prefer customers or suppliers that are internal or external to the company. The document then describes several methods that can be used to determine transfer prices, such as using market rates, negotiated prices, or cost-plus models. It provides an example of calculating an optimal transfer price between wood and paper divisions of a company. The summary concludes by noting how transfer prices can be manipulated for tax purposes in multinational companies.
This document discusses receivables management. It defines receivables as money owed to a firm by customers from sales. Effective receivables management optimizes profits by balancing investment in receivables with sales levels and costs of maintaining receivables like capital costs and collection costs. Firms must determine appropriate credit policies including credit terms, credit limits, and collection efforts to maximize returns while minimizing bad debts and collection period. Tools like credit analysis, aging schedules, and ratio analysis help firms monitor receivables and collection performance.
The document discusses the importance and purpose of budgetary control for organizations. It explains that a budget is a financial planning tool that estimates income and expenses over a set period of time, usually a year. Budgets help organizations plan effectively, monitor spending, ensure transparency and accountability, and identify funding gaps. The document provides guidance on key aspects of developing a budget, including basing it on organizational goals and past financial data, categorizing income and expenses, addressing potential surpluses or deficits, and adjusting the budget as needed over the course of the year.
Operating costing is a method used to calculate costs for service organizations that provide standardized services rather than produce goods. It determines the cost of rendering services. Some key points:
- Operating costing is used by transportation, utilities, hospitals, schools and other service departments within organizations.
- Costs are classified into variable operating/running costs, semi-variable maintenance costs, and fixed standing costs.
- A double cost unit is often used, such as cost per passenger-kilometer.
- Transportation costing examples calculate costs per ton-kilometer based on factors like distance, loading time, fuel costs, and wages.
come and join AFTERSCHOOOL and change the world of millions of people. Raise your voice for truth, honesty, values and work to change the world - use fair means to become an entrepreneur
Marginal costing is a technique that uses the concept of marginal cost, which is the change in total cost from producing one additional unit. It involves separating total costs into fixed and variable costs. Contribution margin is the difference between selling price and variable cost per unit, and shows the amount available to cover fixed costs and generate profit. Cost-volume-profit (CVP) analysis examines how costs, revenue, and profit change with production volume. It can be used to determine the break-even point and plan production levels required to achieve profit targets. Managers use CVP to make decisions about pricing, production, investment, and financing.
1.1 identify the type of accounting
1.2 difference between Cost Accounting , Cost Accountancy and Costing
1.3 understand the Management information needs
1.4 identify the objectives of cost accounting
1.5 difference between Cost Accounting Vs. Financial Accounting
1.6 identify the role of cost accountant
The document discusses the components and computation of a cost sheet. It explains that a cost sheet tracks direct material costs, direct labor costs, direct expenses, factory/works overhead costs, office and administration overhead costs, and selling and distribution overhead costs. It provides a template for a cost sheet showing accounts for materials consumed, direct labor, prime costs, factory costs, production costs, cost of goods sold, and sales. It then provides an example cost sheet with specific costs to populate the template for a company.
Cost Volume Profit (CVP).
Introduction
Fixed costs
Variable costs
Semi variable costs
Contribution margin
Break even point
PV Ratio
BEP ANalysis.
break even point
Cost-volume-Profit.
Overhead refers to indirect costs that cannot be traced to a specific product or service. There are various types of overheads that must be classified. The major steps in overhead accounting are to collect overhead details, distribute overhead to cost centers, and reapportion service department costs to production departments. Common bases for apportioning overhead include direct allocation, direct labor hours, and direct wages. Methods of reapportionment include the direct redistribution and step methods. Absorbing overheads involves allocating overhead expenses to cost centers or cost units using absorption rates. Under or over absorption of overhead can occur depending on actual overhead costs versus absorbed costs.
The document discusses capital structure and its theories. It defines capital structure as the proportion of long-term debt and equity used to finance a company's assets. A company's capital structure determines its risk and cost of capital. There are several theories on capital structure including the net income, net operating income, traditional, and Modigliani-Miller approaches. The optimal capital structure balances minimum costs and risks. Factors like tax rates, control, flexibility, and legal requirements influence a company's choice of capital structure.
Accounting for Price Level Changes/ Inflation AccountingLucky
This document discusses accounting for price level changes and inflation accounting. It covers the concepts, methods, advantages, objectives, and important adjustments required. The main methods discussed are the current purchasing power method, replacement cost accounting method, current value accounting method, and current cost accounting method. The objectives of inflation accounting are to show true results and financial position in current values and ensure funds for asset replacement. Advantages include recognizing changes in money value and ensuring reported profits reflect economic reality.
Standard costing involves establishing predetermined estimates of the costs of products or services, collecting actual costs, and comparing actual costs to the estimates. Standards are set for materials, labor, overhead, and selling prices/margins based on historical data, task analysis, and production process analysis. Material and labor standards consider factors like supplier prices, wage rates, and efficiency levels. Overhead standards may be based on a rate per labor hour. Comparing actuals to standards highlights variances that need management attention to control costs.
Economic Value Added (EVA) is a metric developed by Stern Stewart & Co. in 1982 to evaluate business strategies and maximize long-term shareholder wealth. EVA is defined as net operating profit after taxes (NOPAT) minus the cost of capital. To calculate EVA, a company determines its NOPAT, weighted average cost of capital (WACC), and capital employed to see if it is generating returns above its cost of capital and creating economic value. EVA aims to align managerial decisions with shareholder interests.
The document defines various types of variances that can occur in cost accounting, including material, labor, and overhead variances. It provides formulas to calculate variance amounts and examples showing how to compute variances based on standard and actual costs. Variances are classified into price, usage/efficiency, and mix categories and can be favorable or unfavorable depending on whether actual costs are lower or higher than standards.
Standard costs are developed using formulas, supplier lists, or time studies and compared to actual costs to calculate variances which should be investigated if significant, with variances for direct materials including price, quantity, mix and yield and variances for direct labor including rate, efficiency, mix, yield and idle time.
Cost-volume-profit (CVP) analysis examines how changes in volume, costs, and prices affect profits. It is used for managerial decisions like pricing, order acceptance, product promotion, and feasibility analysis. CVP analysis uses techniques like contribution margin analysis and break-even analysis under assumptions like linear revenues and expenses. Questions address profit levels at different volumes, the volume where costs equal revenues, and the effects of cost/price changes on profits.
The document summarizes financial statement analysis. It discusses the objectives of financial statements which are to provide information for economic decisions, about financial position, performance, and changes in financial position. It then defines financial statement analysis as studying relationships among factors disclosed in statements. Analysis allows evaluation of a firm's position and performance. Objectives of analysis include judging financial health, profitability, debt capacity, and solvency. Types of analysis include external, internal, horizontal, and vertical. Methods include common size statements, comparative statements, trend ratios, and ratio, funds flow, cash flow, break-even, and value added analysis.
Process costing is a method used by manufacturing industries to calculate the cost of production at each stage of converting raw materials into finished goods. It involves allocating total manufacturing costs to products based on normal production levels. Process costing is used in industries like chemicals, textiles, steel, and sugar that involve sequential production processes with continuous flow of goods. The method determines an average cost per equivalent unit and helps control costs, calculate inventory values, and assign product prices at each stage of multiple processes.
The document provides an overview of financial statement analysis. It discusses that financial analysis identifies the financial strengths and weaknesses of a firm by establishing relationships between balance sheet and profit/loss statement items. The key objectives of financial analysis are to evaluate a firm's profitability, debt servicing ability, business risk, and growth. Various techniques of financial analysis are also outlined, including comparative statements analysis, common-size analysis, trend analysis, and ratio analysis. The document aims to explain the concepts and applications of financial statement analysis.
The document discusses cost sheets, which break down the total costs of producing a product into various components. It explains that cost sheets are used to determine accurate product costs, fix selling prices, compare costs over time for cost control, and help with decision making. The document then defines different types of costs like fixed, variable, operating, and direct costs. It also outlines the components that make up total cost, such as prime cost, factory cost, office cost, and discusses how to calculate costs like material consumed. Finally, it provides an example of the information needed to prepare a cost sheet statement.
This document discusses transfer pricing, which refers to the price at which divisions within a company transact with each other. It provides definitions of transfer pricing and outlines some key issues like how transfer prices impact revenue and influence whether managers prefer customers or suppliers that are internal or external to the company. The document then describes several methods that can be used to determine transfer prices, such as using market rates, negotiated prices, or cost-plus models. It provides an example of calculating an optimal transfer price between wood and paper divisions of a company. The summary concludes by noting how transfer prices can be manipulated for tax purposes in multinational companies.
This document discusses receivables management. It defines receivables as money owed to a firm by customers from sales. Effective receivables management optimizes profits by balancing investment in receivables with sales levels and costs of maintaining receivables like capital costs and collection costs. Firms must determine appropriate credit policies including credit terms, credit limits, and collection efforts to maximize returns while minimizing bad debts and collection period. Tools like credit analysis, aging schedules, and ratio analysis help firms monitor receivables and collection performance.
The document discusses the importance and purpose of budgetary control for organizations. It explains that a budget is a financial planning tool that estimates income and expenses over a set period of time, usually a year. Budgets help organizations plan effectively, monitor spending, ensure transparency and accountability, and identify funding gaps. The document provides guidance on key aspects of developing a budget, including basing it on organizational goals and past financial data, categorizing income and expenses, addressing potential surpluses or deficits, and adjusting the budget as needed over the course of the year.
Operating costing is a method used to calculate costs for service organizations that provide standardized services rather than produce goods. It determines the cost of rendering services. Some key points:
- Operating costing is used by transportation, utilities, hospitals, schools and other service departments within organizations.
- Costs are classified into variable operating/running costs, semi-variable maintenance costs, and fixed standing costs.
- A double cost unit is often used, such as cost per passenger-kilometer.
- Transportation costing examples calculate costs per ton-kilometer based on factors like distance, loading time, fuel costs, and wages.
Origin of cost audit&financial statement of auditRajpal Saipogu
Cost audit verifies cost accounts and adherence to cost accounting plans, examining whether the cost of products were arrived at according to cost accounting principles. It is conducted by independent cost and management accountants. Financial audits examine financial statements to determine if they fairly represent the financial position in accordance with standards, increasing credibility. Both cost and financial audits originated in India in the 1920s to monitor pricing and costs.
The document compares the proposed Companies (Auditor's Report) Order, 2016 (CARO 2016) with the existing CARO 2015. Some key changes proposed in CARO 2016 include:
- Expanding the applicability to include foreign companies.
- Raising the thresholds for certain exempted companies.
- Requiring auditors to report on whether title deeds of immovable property are held in the company's name.
- Lowering the threshold for reporting overdue loans from Rs. 5 lacs to Rs. 1 lac.
- Clarifying reporting requirements on statutory dues and disputes.
- Specifying the commencement date as the date of publication in the official gazette.
1. Operating costing is used to calculate the cost of providing services rather than producing goods. It is used by transportation, utility, and hospitality industries like hotels and hospitals.
2. The document provides examples of cost units used in different service industries like per passenger-kilometer for transportation, per kilowatt-hour for electricity, and per room-day for hotels. It also outlines the classification of costs and cost sheet formats.
3. Transportation costing is discussed in detail including operating, ownership, and estimation of changes in costs from projects. Hotel costing is also summarized including cost centers like restaurant and laundry, and key cost elements like provisions, labor, and overheads.
This document is a project report submitted by a student to Mumbai University on strategies implemented by Skoda Auto India. It includes an introduction to Skoda's operations in India, the company's history, products offered in India. It discusses Skoda's levels of strategic management in India, focusing on business strategy as it competes with other luxury car brands. The report also includes a SWOT analysis and BCG matrix to analyze Skoda's strategies and product portfolio in India.
Job Costing - An Execution Guide for Operations NSCA Best Practices ConferenceJohn Graham
Job costing is typically thought of as an accounting function. Margins are only getting tighter so every point of margin possible must be achieved in the execution of projects. The project team’s understanding of the financial aspects can make the difference in having unprofitable or profitable projects and service contracts
This document is a project report submitted by a student on the topic of operating costing. It provides an introduction to operating costing and cost accounting. It defines operating costs and operating costing, and explains that operating costing is used to determine the cost of providing a service. The document outlines different costing methods and provides examples of operating costing for transport, hotels, and hospitals.
Security analysis and portfolio managementHimanshu Jain
Live Project was all about studying the company’s financial health through the movement of their stock price. This live project deals with the basic concepts of investment in securities such as bonds and stocks, and management of such assets. It discusses various aspects of portfolio management, ranging from analysis, selection, and revision to evaluation of portfolio, securities market and risk evaluation that help in understanding the trading system better and making quality investment decisions.
This live project helped to understand how the stock prices vary. It also helped to know and calculate several technical terms. In this project, I was given 5 stocks wherein I need to update opening price, closing price, % change, total shares traded etc. every day. Then it is required to find out the beta, average return etc. of these stocks separately and construct a portfolio with Rs. 50, 00,000 keeping in mind optimum return for the investment. We need to keep in mind beta, standard deviation, risk and return of these stocks and invest to get the optimum returns.
This project helps in knowing the expected return and risk for each stock. Under this project I got to know about portfolio management as well as expected return & risk associate with each company. Through this project my future investment will be better as it helps in knowing the inside depth of companies by analysis the financial details.
Topic 11 Cost Accounting And Managementguest441011
Cost accounting and management involves analyzing how costs behave with changes in business activity levels. There are three types of costs: variable costs that change with activity levels, fixed costs that remain constant, and mixed costs that have both fixed and variable components. It is important to identify costs as fixed or variable for business decisions around pricing, production methods, and sales levels needed to cover costs. Manufacturing costs consist of direct materials, direct labor, and manufacturing overhead like indirect labor and depreciation. Period costs are non-manufacturing expenses like selling and administrative costs.
Fundamental analysis involves analyzing macroeconomic conditions, industries, and individual companies. At the macroeconomic level, factors like GDP growth, inflation, interest rates, and fiscal/monetary policies are examined. Industry analysis evaluates the attractiveness of industries based on their growth stage, competitive environment, and sensitivity to economic cycles. Finally, company analysis assesses the financial statements, management quality, and competitive positioning of specific firms. Together, this three-tiered fundamental analysis helps investors evaluate investment opportunities.
The operating costing on hotel,hospital & transporthemant sonawane
This document is a project report submitted by Hemant Dhanraj Sonawane for his Masters in Commerce degree. It discusses operating costing in various service industries such as hotels, hospitals, and transport. The report covers topics like the meaning and definition of operating costing, its applications and cost units, the procedure for determining operating costs, limitations of operating costing, and provides examples of cost analysis for staff canteens, hotels, hospitals, and transport.
This document provides an outline for a project report on an unnamed project. It includes sections for an introduction, system study and analysis, system development, program list, table list, report list, system testing and conclusion, data entry forms, coding conventions, source code, screen layouts, report layouts, and references. It also lists several annexures that will provide additional details like the organization background, data dictionary, list of abbreviations, and soft copy of the project. The document gives the overall structure and expected contents for a complete project report to fulfill degree requirements.
Here are the Personal Accounts of Mr. H and Mr. R as per the transactions given:
Mr. H A/c
Amount Amount
Date Particulars (Rs) Date Particulars (Rs)
1-Apr By S A/c 20,000
5-Apr By S A/c 30,000
17-Apr By S A/c 15,000
19-Apr By S A/c 10,000
22-Apr By Discount A/c 100
22-Apr By S A/c 20,000
29-Apr By Balance c/d 5,000
75
This document provides information about a cost accounting course offered by Cost Academy. It includes contact information for the academy, a list of topics to be covered in the course, and the number of classes required for each topic. The total number of classes for the full course is 44. It also includes the syllabus for the Group II Paper 4 exam on Cost Accounting and Financial Management, which will cover cost accounting for 50 marks and financial management for 50 marks over three hours.
PepsiCo is a large, global food and beverage company with revenues of $27 billion annually. It was founded in 1965 through the merger of Pepsi-Cola and Frito-Lay. PepsiCo owns popular brands like Pepsi, Lay's, Gatorade, Tropicana, Quaker Foods and others. The company has over 143,000 employees worldwide and its brands are available in nearly 200 countries. PepsiCo's mission is to be the premier consumer products company focused on convenient foods and beverages by producing healthy financial returns and growth opportunities.
This document provides definitions and concepts related to security analysis and portfolio management. It discusses key topics such as the nature of investments, investment objectives and constraints, investment classification, capital markets, and various investment avenues and instruments. References are also provided at the beginning for further reading on the subject matter.
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This document provides an overview of bank auditing in India. It discusses the different types of audits conducted on banks, including statutory audit, concurrent audit, and RBI audit. The stages of auditing are outlined, including preliminary work, evaluation of internal controls, preparing an audit program, and submitting the audit report. Key acts governing bank auditing in India are also listed. The purpose of bank auditing is to provide a true and fair assessment of the bank's financial position and ensure compliance with regulatory requirements.
PepsiCo is a Fortune 500 company headquartered in New York that manufactures and markets beverages and snacks. Its main product is Pepsi Cola, which sells over 100 billion cans per year. PepsiCo was formed through mergers and acquisitions of brands like Frito-Lay, Quaker Oats, Gatorade, Tropicana, and others. It operates globally with products in nearly 200 countries and regions. Indra Nooyi has been CEO since 2006 and has focused on healthier products and sustainability. PepsiCo is organized into divisions for Americas Foods, Americas Beverages, and International markets.
CHAPTER 4 Estimating CostsIntroduction to managerial account.docxrobertad6
CHAPTER 4
Estimating Costs
Introduction to managerial accounting
Cost classifications
Fixed versus variable
Direct versus indirect (overhead)
Cost behavior
Cost allocation
Activity-based costing
Copyright 2009 Health Administration Press
4 - ‹#›
Managerial Accounting
There are two main areas of accounting:
Financial
Managerial
Financial accounting involves creating financial statements to report the financial status of the overall business. These statements are used primarily by outsiders.
Managerial accounting involves creating information for internal use in managerial decision making. This chapter focuses on managerial accounting.
Copyright 2009 Health Administration Press
4 - ‹#›
Cost Classifications
Cost measurement is a critical part of managerial accounting.
Unfortunately, there is no single definition of the term cost. Different costs are used for different purposes.
Costs are classified in two major ways:
By their relationship to volume
By their relationship to the sub-unit being analyzed
Copyright 2009 Health Administration Press
4 - ‹#›
Is there a difference between a cost and an expense?
Discussion Item
Copyright 2009 Health Administration Press
4 - ‹#›
Cost Behavior
The relationship between costs and the volume of services provided is called cost behavior or underlying cost structure.
If the underlying cost structure is known, managers can forecast costs at different levels of patient volume.
In this context, costs may be
fixed (independent of volume), or
variable (dependent on volume).
Copyright 2009 Health Administration Press
4 - ‹#›
Cost Behavior (cont.)
In the long-run, all costs are variable; hence, the fixed versus variable classification can hold only in the short-run—say, for one year.
Also, no costs are fixed throughout an infinite range of volumes. Thus, the concept of cost classifications according to volume must be applied within some relevant range of patient volume.
Copyright 2009 Health Administration Press
4 - ‹#›
What are some examples of fixed and variable costs for a hospital’s clinical laboratory?
Discussion Item
Copyright 2009 Health Administration Press
4 - ‹#›
Cost Behavior Example: Walk-In Clinic
Variable Costs Per Visit Fixed Costs Per Year
Clinical supplies $20 Facilities $30,000
Other supplies 5 Salaries 190,000
Variable cost rate $25 Overhead 80,000
$300,000
Total Fixed Variable Total Average
Volume Costs Costs Costs Cost
1 $300,000 $ 25 $300,025 $300,025
100 300,000 2,500 302,500 3,025
200 300,000 5,000 305,000 1,525
1,000 300,000 25,000 325,000 325
5,000 300,000 125,000 425,000 85
10,000 300,000 250,000 550,000 55
25,000 300,000 625,000 925,000 37
Note: The rele.
AssignmentSchool Engineering and Information TechnologyI.docxssuser562afc1
Assignment
School Engineering and Information Technology
ITECH1005-5005: Business Information Systems
Aims
To analyse a set of data (in Microsoft Excel), and write a brief report (in Microsoft Word), identifying and explaining your insights into the surgical operations of BestHealth Hospital.
Learning Objectives
In the process of this assessment task you will:
· plan, schedule and execute project tasks with a view to improving your personal productivity;
· gain awareness of some typical issues related to the operation of a small-to-medium size business;
· use the functionality of Microsoft Excel 2007/10/13 to manipulate data, analyse it and visualise it in tabular and chart form; and
· use the functionality of Microsoft Word to write a brief report of your business observations and recommendations.
Due date:Week 11, Thursday, 5pm
Submit the individual work file, named 'a1-<Surname_ID>.doc', by Week 11, Thursday, 5pm via Moodle.Cutoff date:Week 12, Friday, Midnight
Any submission after the due date and time will receive a deduction of 10% per day, this includes weekends.Marks:This assignment has a total 30 marks for ITECH1005 students and 36 marks for ITECH 5005 students. It is worth 30% out of the total assessment.Extensions:
An extension will only be considered with supporting documentation from a health professional and if the problem/illness occurred within the week prior to the due date. If an extension is granted the extension will then equal the number of days specified on the doctor's certificate, with a maximum limit of one week.Authorship:
This assignment is an individual assignment and it shall be completed by the individual student only. The final submission must be identifiably the work of the individual. Breaches of this requirement will result in an assignment not being accepted for assessment and may result in the offending student or students being required to present before the Disciplinary Committee.
BestHealth Hospital : Analysing Surgical Services
Introduction
BestHealth Hospital specialises in providing a range of orthopaedic surgical services for both private and public patients from regional Victoria. The hospital currently has contracts with a number of surgeons and anaesthetists (who are essentially private professional contractors) using two surgical theatres that are available for use, on average, 8 hours a day, Monday to Friday, and only these basic operational hours are used by the government to assess the total available surgical time for calculating minimum time to be made for public patients.
The hospital is required to apply 25% of available surgical time in each quarter to public patients in order to receive the full amount of reimbursable fees from the government. If the minimum amount of surgical time is not applied to public patients in each quarter, then the government penalises the hospital by reducing the total reimbursable fees by 5% for that quarter.
The hospital receives scheduled fees for e ...
For evidence based decision making. helpfull for public health officials in planning in advance & reach desired goals . In era of health insurance acceptable levels of unit costing by bottom up approach . In addition comparing private to public also identifies the gaps that can be adddressed.
Rural Urgent Care Centers Business PlanI. Executive Summary.docxanhlodge
Rural Urgent Care Centers Business Plan
I. Executive Summary
II. Program Overview
Location
Services
Other Professional Offerings
Facility
Operating Model
III. Market Profile
Market Overview
Demand Forecasting
IV. Financial Analysis
Pro-Forma Income Statement for UCC
(A “Week 11 Business Plan Excel Template” has been provided in the assignment instructions and in the Learning Resources).
Year 1Year 2Year 3Year 4Year 5
Visits4,8825,1265,3825,6525,934
Revenue Per Visit$450$450$450$450$450
Gross Revenue
Patient Reveue
Gross Patient Revenue
Deductions from Patient Revenue
Contractual
Total Deductions from Revenue
Net Patient Revenue$0$0$0$0$0
Operating Expenses
Salaries and Wages
Employee Benefits
Utilities
Repair/Maintenance
Housekeeping
Telephone Service
Depreciation
Malpractice
Miscellaneous/Other
Variable Medical Supply Costs
Other Non-Personnel Costs
Total Operating Expenses
Excess of Rev over Exp. From Operations$0$0$0$0$0
Cummulative Income$0$0$0$0$0
Net Cash from Excess Rev (excl Depreciation)$0$0$0$0$0
Cummulative Income Net Cash$0$0$0$0$0
Pro Forma Income Statement
2
Executive Summary, Overview, and Financial Data for Investment
in the Rural Urgent Care Center
I. Executive Summary
Urgent care is the delivery of ambulatory care in a facility dedicated to the delivery of unscheduled, walk-in care outside of a hospital emergency department. Development of the Rural Urgent Care (RUC) facility in Sylacauga, Alabama will facilitate access to care providers through extended service hours within closer geographic proximity to patients, families, and caregivers. The Director of Emergency Services will provide clinical monitoring to ensure quality service provisions. The RUC facility will act to alleviate demand for emergency department (ED) services by shifting lower acute patients to a less resource-intensive environment.
II. Program Overview: Market Opportunities and Utilization Patterns
The RUC will provide treatment to patients suffering from non-life-threatening conditions that require quick attention, including bone fractures, pneumonia and flu, and minor lacerations. Since the late 1980s and early 1990s, hospitals have looked to facilities such as RUCs as a means to reduce rates of inappropriate ED utilization by triaging non-emergent patients to less acute settings. The ED is not the most appropriate care setting for many patients. Non-urgent patients account for well over 10 percent of the average ED’s caseload, and semi-urgent cases account for another 20 percent (refer to Figure 1)
. At the other end of the acuity spectrum, most emergent patients would be better served in an inpatient unit, but many are forced to board in the ED because beds are unavailable.
Year4,8825,1265,3825,6525,934
Month407427449471495
Week9499104109114
Day1314151616
Visit volume will increase by 5% each year
Service AreaVisitsYear 1Year 2Year 3Year 4Year 5
Figure 1
Triaging patients to an appropriate site of care.
Donna jennings 2015 ga partnership meeting telemedicine roi & quality outcomesSamantha Haas
This document discusses the potential financial and clinical benefits of implementing telemedicine services at hospitals. It provides two case studies showing significant projected revenue from retaining patients and reducing transfers through telemedicine consultations. For a 150-bed acute care hospital, teleintensivist services could result in $2.2 million in additional annual revenue. For a 25-bed critical access hospital, stroke and critical care telemedicine could yield $723,800 in annual revenue with costs of $300,000, providing a first year return on investment of $423,800. The document also lists other potential benefits including improved outcomes, staff efficiencies, expanded services, and improved satisfaction.
Pro Forma StatementPro Forma Income StatementYear 1Year 2Year 3Yea.docxsleeperharwell
Pro Forma StatementPro Forma Income StatementYear 1Year 2Year 3Year 4Year 5Visits4,8825,1265,3825,6525,934Revenue Per Visit$450$450$450$450$450Gross RevenuePatient Reveue Gross Patient RevenueDeductions from Patient RevenueContractual Total Deductions from Revenue Net Patient Revenue$0$0$0$0$0Operating ExpensesSalaries and WagesEmployee BenefitsUtilitiesRepair/MaintenanceHousekeepingTelephone ServiceDepreciationMalpracticeMiscellaneous/OtherVariable Medical Supply CostsOther Non-Personnel Costs Total Operating ExpensesExcess of Rev over Exp. From Operations$0$0$0$0$0Cummulative Income$0$0$0$0$0Net Cash from Excess Rev (excl Depreciation)$0$0$0$0$0Cummulative Income Net Cash$0$0$0$0$0
Executive Summary, Overview, and Financial Data for Investment
in the Rural Urgent Care Center
I. Executive Summary
Urgent care is the delivery of ambulatory care in a facility dedicated to the delivery of unscheduled, walk-in care outside of a hospital emergency department. Development of the Rural Urgent Care (RUC) facility in Sylacauga, Alabama will facilitate access to care providers through extended service hours within closer geographic proximity to patients, families, and caregivers. The Director of Emergency Services will provide clinical monitoring to ensure quality service provisions. The RUC facility will act to alleviate demand for emergency department (ED) services by shifting lower acute patients to a less resource-intensive environment.
II. Program Overview: Market Opportunities and Utilization Patterns
The RUC will provide treatment to patients suffering from non-life-threatening conditions that require quick attention, including bone fractures, pneumonia and flu, and minor lacerations. Since the late 1980s and early 1990s, hospitals have looked to facilities such as RUCs as a means to reduce rates of inappropriate ED utilization by triaging non-emergent patients to less acute settings. The ED is not the most appropriate care setting for many patients. Non-urgent patients account for well over 10 percent of the average ED’s caseload, and semi-urgent cases account for another 20 percent (refer to Figure 1)
. At the other end of the acuity spectrum, most emergent patients would be better served in an inpatient unit, but many are forced to board in the ED because beds are unavailable.
Year4,8825,1265,3825,6525,934
Month407427449471495
Week9499104109114
Day1314151616
Visit volume will increase by 5% each year
Service AreaVisitsYear 1Year 2Year 3Year 4Year 5
Figure 1
Triaging patients to an appropriate site of care properly allocates resources to meet patient acuity and results in better clinical outcomes. RUC staffing and treatment approaches are fundamentally different from those in an ED; patients get more abbreviated and pointed clinical work-ups, which provides care more efficiently by clinicians who are oriented to less intense discovery and intervention.
The RUC will also address community needs for convenient, reliab.
This document provides an overview of economic evaluation of health interventions. It defines economic evaluation as the comparative analysis of costs and consequences of at least two health care interventions. Resources are limited, so economic evaluations are conducted to help with optimal resource allocation. The document outlines different types of economic evaluations including cost-minimization analysis, cost-effectiveness analysis, cost-utility analysis, and cost-benefit analysis. It also discusses key components of economic evaluations like costs, outcomes, and methods of comparing alternatives.
Part II Record Financial Operations CHAPTER 5 EXPEtwilacrt6k5
Part II: Record Financial
Operations
CHAPTER 5: EXPENSES: (OUTFLOW)
Overview: The Distinction Between
Expense and Cost
• Expenses are expired costs that have been
used up, or consumed, while carrying on
business.
• Expense in the broadest sense includes every
expired (used up) cost that is deductible from
revenue.
Overview: The Distinction Between
Expense and Cost
• “Cost” is the amount of cash expended* in
consideration of goods or services received (or
to be received).
*(or property transferred, services performed,
or liability incurred)
• Costs can either be expired or unexpired.
• Expired costs are used up in the current
period and are matched against current
revenues.
• Unexpired costs are not yet used up and will
be matched against future revenues.
Overview: The Distinction Between
Expense and Cost
• Confusion also exists over the term “cost”
versus the term “charges”.
• Charges are revenue, or inflow
• Costs are expenses, or outflows
• Charges add; costs take away.
Overview: Confusion Over Other
Terminology
Disbursements for Services
• Disbursements for services represent an
expense stream (an outflow)
• Disbursements for services can trigger
payment either:
– when the expense is incurred; or
– after the expense is incurred.
Disbursements for Services
• Payment when the expense is incurred does
not require the expense to enter the Accounts
Payable account.
• Payment after the expense is incurred requires
the expense to be recorded in the Accounts
Payable account.
• It is then cleared from Accounts Payable when
payment is made.
Grouping Expenses for Planning and
Control
• Grouping by Cost Center
• One form of responsibility center.
• Study examples in Exhibits 5-1 and 5-2.
Exhibit 5–2
General
Services and
Support
Services Cost
Centers
Grouping by Diagnoses and Procedure
• Beneficial because is matched costs and
common classifications of revenues
• Study examples in Exhibits 5-3, 5-4, 5-5 &
Table 5-1
Exhibit 5–5 Example of Hospital
Departmental Costs Classified by
Diagnoses, MDC, and DRG
Table 5–1 Example of Radiology Department
Costs Classified by Procedure Code
• By care settings recognizes different sites
where service is delivered
• Care settings were discussed in the previous
chapter.
Grouping by Care Settings
• By service lines would be used for grouping
costs if revenues were divided by service line.
• Service lines were discussed in the previous
chapter.
Grouping by Service Lines
• Distinguishes projects that posses their own
objectives, funding, and indicators.
• Study the example in Exhibit 5-6.
Grouping by Programs
Exhibit 5–6 Program Cost Center:
Southside Homeless Intake Center
Cost Reports As Influencers Of
Expense Formats
• Since the mid-1960s Annual Cost Reports are
required by the Medicare Program and the
Medicaid Program.
Cost Reports As Influencers Of
Expense Formats
• The arrangement of c ...
The document discusses how to create a budget for a hospital or educational institution. It outlines 10 steps for developing a hospital budget, including determining revenue sources, calculating expenses for facilities, equipment, personnel, and medical costs. Revenue comes from payments, taxes, donations, and insurance. Expenses include maintaining buildings, departments, equipment, beds, and staffing costs. The budget process requires estimating these factors. For an educational institution, the budget has revenue, expenditure, and capital sections. Recurring costs include fees, salaries, supplies while non-recurring includes endowments, deposits, and certifications. The samples budgets showed revenue exceeding expenses.
Economic analysis on art task shifting ppp (for athens conference)Naod Mekonnen
This study analyzed the economic impact of task shifting for antiretroviral treatment (ART) in Ethiopia using an econometric model. The study found that nurses and health officers spent 16% less time per patient visit and had 16% lower labor costs compared to physicians. However, there were no significant differences found between health center and hospital visit costs or between initial and follow-up visits. The results support task shifting as a cost-effective strategy for expanding ART access in Ethiopia. Future research could analyze additional factors like quality of care and incorporate more variables into the economic model.
Costing for Hospitals - How to arrive at service level cost ?Manivannan S
Costing hospital Services poses serious challenges in identifying the basis of allocation of costs and the allocation itself. This PPT gives you the entire methodology
Cost-benefit analysis (CBA) is a technique used to evaluate the costs and benefits of projects or interventions. It involves identifying and assigning monetary values to all relevant costs and benefits, including both direct and indirect effects. These costs and benefits are then discounted to present values and compared to determine if the net benefit is positive. If multiple alternatives exist, CBA can be used to select the alternative with the highest net benefit. Sensitivity analysis is also conducted to account for uncertainty in the estimates.
Dear student, Warm Greetings of the Day!!! We are a qualified team of consultants and writers who provide support and assistance to students with their Assignments, Essays and Dissertation. If you are having difficulties writing your work, finding it stressful in completing your work or have no time to complete your work yourself, then look no further. We have assisted many students with their projects. Our aim is to help and support students when they need it the most. We oversee your work to be completed from start to end. We specialize in a number of subject areas including, Business, Accounting, Economic, Nursing, Health and Social Care, Criminology, Sociology, English, Law, IT, History, Religious Studies, Social Sciences, Biology, Physic, Chemistry, Psychology and many more. Our consultants are highly qualified in providing the highest quality of work to students. Each work will be unique and not copied like others. You can count on us as we are committed to assist you in producing work of the highest quality. Waiting for your quick response and want to start healthy long term relationship with you. Regards http://www.cheapassignmenthelp.com/ http://www.cheapassignmenthelp.co.uk/
The document discusses product costing methods including job-order costing, process costing, standard costing, and microcosting. It provides examples of applying each method to calculate costs for medical services like x-rays and lab tests. The document also includes a homework problem asking to calculate the cost per x-ray using process and job-order costing for a hospital radiology department.
This document discusses product costing methods including job-order costing, process costing, standard costing, and microcosting. It provides examples of applying each method to calculate costs for medical services like x-rays and lab tests. The document concludes with an assignment problem asking to calculate costs per x-ray using both process and job-order costing for a hospital radiology department.
This document discusses product costing methods including job-order costing, process costing, standard costing, and microcosting. It provides examples of applying each method to calculate costs for medical services like x-rays and lab tests. The document concludes with an assignment problem asking the reader to calculate costs per x-ray using both process and job-order costing for a hospital radiology department.
Operating costs are expenses associated with maintaining and running a business on a daily basis. They include costs like administration, maintenance, repairs and wages. Operating costs are classified as fixed, variable or semi-variable. Fixed costs remain constant regardless of the level of production or sales like depreciation. Variable costs change in relation to activity like materials. Semi-variable costs have both fixed and variable elements like insurance. Operating costing is used to calculate the costs of providing services and is applied by organizations like transport, utilities and hospitals. It involves classifying and collecting costs to determine a cost per unit of service.
A study of Cost Comparison of Outsourcing vs Inbuilt facility for Biomedical ...Dr. Varun Goyal
This document summarizes a study comparing the cost of outsourcing biomedical waste management versus establishing an in-house facility at a government hospital in Chandigarh, India. The study found that establishing an in-house facility would cost approximately Rs. 8.6 per bed per day to operate, compared to Rs. 10.90 per bed per day for outsourcing, resulting in a net annual savings of over Rs. 500,000. Additional savings could be achieved by expanding the in-house facility's capacity or by generating revenue from other hospitals. The upfront installation costs of the in-house facility would pay for itself within 12-13 years of operation. In conclusion, an in-house biomedical waste
This document summarizes the results of a retrospective audit assessing the financial implications of breast reconstruction procedures. It analyzed 274 patients who underwent 278 primary breast reconstructions and 366 secondary procedures between 2000-2007. DIEP flap reconstruction had the longest average length of stay but also the highest costs. Implant reconstruction had fewer secondary procedures on average but costs were still substantial due to additional procedures needed. The document concludes that while autologous reconstruction provides better long-term symmetry, the current tariff system financially discourages immediate and bilateral breast reconstruction procedures.
The document describes a supplemental medical insurance plan called Solutions Plus+ Gap that covers deductibles, co-payments, and co-insurance for employees. It provides value to employees by reducing out-of-pocket costs, employers by immediately lowering healthcare benefit costs and providing a multi-year strategy to control costs, and brokers by offering a unique solution to obtain new clients and increase revenue. The plan includes hospital confinement and outpatient benefits with examples of covered expenses. Claims examples show how the plan reduces individuals' costs to zero. It guarantees issue, has no medical underwriting, and can be bundled with accident and critical illness plans to address other client insurance needs.
India - targeted stimulus continues (Tranche 2)Rutuja Chudnaik
In the latest stimulus package announced by the Finance Minister, priority was given to migrant labourers, farmers, and small businesses. Measures included free food grains and portability of ration cards for migrants, interest subvention and credit boosts for farmers and small businesses, and affordable housing schemes. The total stimulus package amounted to INR 3.16 trillion, although the actual fiscal cost will be lower, estimated at INR 35 billion for food grains for migrants and INR 15 billion for interest subvention on small loans. The targeted support aims to provide relief to those most impacted by the pandemic.
Future forward - COVID 19 Government Stimulus (Tranche 1)Rutuja Chudnaik
details of the Rs 20 lakh crore economic stimulusKey Takeaways:Tranche has about 15 different measures -
six of them for MSMEs
two for Employee provident funds
two for NBFCs
two for MFIs
one to discoms
three tax related
Classified as Others -
one to real estate
one contractors
A bank guarantee is a commercial instrument in the nature of a contract, intended between two parties, to secure compliance with the contract. It is an off-shoot of the main contract between two parties. It is a guarantee made by a bank on behalf of a customer. There are three parties to guarantee, i.e., surety, principal debtor (bank’s customer) and creditor.
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We Lounge
Mr. Ranjeet Mudholkar (Chairman & CEO FPSB– Financial Planning Standards Board of India)
Mr. Prasanth Nair - Global Head – HR – Cipla
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Newswire
5 Reasons Sustainability Drives Innovation
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Amazon India Gets RBI Nod For Mobile Wallet
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India Ranks As Second-largest Market For LinkedIn
BREXIT
Brexit 1
What is Brexit? 1
What are the main arguments for Brexit? 1
What are the arguments against Brexit? 2
Why Britain voted to leave the EU 2
What could the prospect of Brexit mean for India? 2
Brexit And Indian Corporates In The Long Run 3
Brexit And Indian Corporates In The Short Run 4
Brexit and IT Corporates 4
Brexit and Pharmaceutical Industry 5
Brexit and Auto Component Manufacturers 5
Strategies to survive the BREXIT impact for Indian Corporates 5
Way Forward 8
AUDIT ASSIGNMENT- M.COM PART II – SEMESTER IV, AUDIT REPORT, CARO 2015, AUDIT REPORT OF JINDAL STEEL & POWER LIMITED, SA 230 AUDIT DOCUMENTATION (REVISED), SA 500: AUDIT EVIDENCE.
The document is a project report submitted by Rutuja Deepak Chudnaik for their M.Com degree. The report focuses on comparing the Payback Method and Internal Rate of Return (IRR) Method for capital budgeting and investment decisions. The report includes an introduction to capital budgeting, the objectives and basic principles. It also provides details on the calculation of payback period for projects with constant and uneven cash flows. The report is submitted to the University of Mumbai under the guidance of their project guide, Prof. Dhiren Kanabar.
This document provides instructions for handling accounts with incomplete records or single entry bookkeeping systems. It discusses two approaches - 1) converting the incomplete records into final accounts and 2) calculating profit. For the conversion approach, it outlines seven rules, including gathering all information, preparing necessary accounts like debtors/creditors, old and new balance sheets, trading and profit & loss accounts. It notes the use of gross profit ratios to calculate missing sales or cost values. The rules also cover handling missing cash/bank values and tallied accounts. It emphasizes using all given information and ratios to calculate missing values.
This document contains a schedule of subjects, dates, and chapters for various courses including Audit, Advanced Accounting, Costing, Financial Management, Direct Taxation, Law, Accounting, and Information Technology & Systems Management. For each date listed, there is an associated subject and chapter. The schedule spans from September 15 to November 15 and covers a range of accounting, finance, taxation, law and IT topics.
Research methodology mcom part II sem IV assignmentRutuja Chudnaik
This document appears to be a research project report on diabetes mellitus and its treatment trends submitted by a student, Rutuja Deepak Chudnaik, to the University of Mumbai. The report includes an acknowledgement section thanking those who assisted with the project, a declaration by the student, and a table of contents outlining the various sections of the report such as an introduction on diabetes, prevention, methodology, data collection and analysis procedures, findings on perceived blood glucose control, diet and medication, and conclusions. The student conducted the research under the guidance of a professor for a degree program in research methodology.
• Finance Minister Arun Jaitley presented the Union Budget for fiscal 2015-16 in the Lok Sabha.
Budget 2015
• A legendary budget catering to people belonging to all categories of society, with Insurance for poor at Rs. 12 premium as well as reduction of corporate tax.
The budget highlights the following key points:
1) Corporate tax rates will be reduced from 30% to 25% over the next 4 years. Service tax will increase from 12.36% to 14% and excise duty will increase slightly. Wealth tax will be abolished and a 2% surcharge will be added for high-income individuals.
2) Several deductions will be increased, including the health insurance deduction from Rs. 15,000 to Rs. 20,000 and the transport allowance exemption. Limits for health insurance premium deductions and senior citizen health expenses will also be raised.
3) Implementation of the Goods and Services Tax (GST) is targeted for April 2016.
PROVISIONS RELATING TO CO-OPERATIVE SOCIETIES IN MAHARASHTRARutuja Chudnaik
PROVISIONS RELATING TO CO-OPERATIVE SOCIETIES IN MAHARASHTRA, The Maharashtra Co-operative Societies Act, 1960 (MCS Act) and The Maharashtra Co-operative Societies Rules, 1961 are applicable to any co-operative society registered in Maharashtra and having no branches outside Maharashtra. If any state does not have its own State Act, the Co-operative Societies Act, 1912 and Rules become applicable. However, if a society has operations beyond one State, it is governed by a Central Act viz. the Multi-State Co-operative Societies Act, 2002 (MSCS) and its Rules.
The income earned by a co-operative society is subject to income tax under the Income-tax Act, 1961 and its Rules. It may be noted the income of a co-operative society is eligible for deduction u/s 80P of the Income-tax Act and not an exemption u/s 10. Hence, it is mandatory for all co-operative societies to file income tax return.
Co-operative societies are also governed by circulars, notifications and directives issued from time to time by the various departments of co-operation. A society is also bound by its bye-laws. It has also to follow various accounting and assurance standards issued by the Institute of Chartered Accountants of India.
As 22 final,AS 22 has become applicable to all listed companies with effect from 01/04/2001. The AS will also be applicable to all non-listed corporates with effect from 01/04/2002 and all other non-corporate entities with effect from 01/04/2003. Hence, now in financial statements two taxes will be accounted for (a) current income tax and (b) deferred income tax. AS 22 is a measurement standard meaning thereby that it involves accounting along with disclosure requirement in financial statements.
Trends and challenges of BOP of India,Balance Of Payments Position in India,Balance Of Payments – Introduction
Components Of A BOP Statement
Balance Of Payment in India
Bop Crisis In India
Developments In India’s Bop During April-June 2014
Measures of Correcting Balance of Payment
Challenges and Perspective of Disaster ManagementRutuja Chudnaik
Challenges and Perspective of Disaster Management,Disaster- An Introduction,The cost and consequences of disasters, Development and natural disasters, Disaster Risk Reduction, Disaster Management Cycle, Disaster management in India, Natural Disaster – Droughts, Drought: causes and effects, Impact of drought: Indian scenario, Drought disaster challenges and mitigation in India, Drought assessment: tools and techniques, Drought management and challenges, Drought management framework in India, Conclusion.
The assessee claimed credit for TDS that was denied by the AO because the entries did not match Form 26AS. The CIT(A) said credit should be given to the extent shown in the department's system. The tribunal referred to court precedents that said credit must be given even without a TDS certificate, based on evidence. It directed the department to give credit based on original challans, system details, or evidence of TDS, even if the deductor did not issue a certificate. It also allowed the assessee's claim for interest on delayed payment of interest.
The Central Board of Direct Taxes (CBDT) issued a draft circular clarifying that no interest under section 234A of the Income Tax Act should be charged on self-assessment tax paid before the due date for filing a tax return. Previously, interest was charged on self-assessment tax even if paid before the due date. The CBDT reviewed this after the Supreme Court ruled that interest under section 234A should only apply to tax amounts unpaid before the due date. Therefore, the CBDT decided that no interest will be charged under section 234A on self-assessment tax paid before the due date for filing a return.
The document discusses the need for implementing GST in India. It outlines several issues with the current indirect tax structure, including a lack of input tax credits between central and state taxes, definitional issues, and different compliance mechanisms across states. Implementing GST would help rationalize these issues by introducing a single, comprehensive indirect tax on both goods and services with input tax credits. The document then discusses three models for implementing GST - Central GST, State GST, and Dual GST (concurrent or non-concurrent), concluding that a concurrent dual GST model seems most feasible given India's present tax structure.
Monthly Market Risk Update: June 2024 [SlideShare]Commonwealth
Markets rallied in May, with all three major U.S. equity indices up for the month, said Sam Millette, director of fixed income, in his latest Market Risk Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
13 Jun 24 ILC Retirement Income Summit - slides.pptxILC- UK
ILC's Retirement Income Summit was hosted by M&G and supported by Canada Life. The event brought together key policymakers, influencers and experts to help identify policy priorities for the next Government and ensure more of us have access to a decent income in retirement.
Contributors included:
Jo Blanden, Professor in Economics, University of Surrey
Clive Bolton, CEO, Life Insurance M&G Plc
Jim Boyd, CEO, Equity Release Council
Molly Broome, Economist, Resolution Foundation
Nida Broughton, Co-Director of Economic Policy, Behavioural Insights Team
Jonathan Cribb, Associate Director and Head of Retirement, Savings, and Ageing, Institute for Fiscal Studies
Joanna Elson CBE, Chief Executive Officer, Independent Age
Tom Evans, Managing Director of Retirement, Canada Life
Steve Groves, Chair, Key Retirement Group
Tish Hanifan, Founder and Joint Chair of the Society of Later life Advisers
Sue Lewis, ILC Trustee
Siobhan Lough, Senior Consultant, Hymans Robertson
Mick McAteer, Co-Director, The Financial Inclusion Centre
Stuart McDonald MBE, Head of Longevity and Democratic Insights, LCP
Anusha Mittal, Managing Director, Individual Life and Pensions, M&G Life
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Cryptocurrency is digital money that operates independently of a central authority, utilizing cryptography for security. Unlike traditional currencies issued by governments (fiat currencies), cryptocurrencies are decentralized and typically operate on a technology called blockchain. Each cryptocurrency transaction is recorded on a public ledger, ensuring transparency and security.
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An accounting information system (AIS) refers to tools and systems designed for the collection and display of accounting information so accountants and executives can make informed decisions.
1. Question 01. With help of two suitable example, Explain following concept under operating
costing in case of a transporter (Hotel / Hospital)
Solution:-
1. Fixed Cost / Standing Cost
Fixed costs are those costs that do not change based on production levels, while variable
costs increase or decrease based on production.
Fixed costs can be assets like buildings and equipment. For example, a beverage company
that bottles water is going to need a physical building and an assembly line that includes
specialized equipment. If we assume the building and equipment are leased, there is a
monthly payment for each of them. The company is responsible for paying 100% of the
monthly payments whether they produce one case of bottled water or 10,000 cases of
bottled water.
It is important to note that fixed costs are NOT always the same. Like the price of
anything, they can change - sometimes unpredictably and sometimes on a regular
schedule, but they do so based on some other factor, NOT the level of production.
Fixed costs are one part of the total cost formula. The formula used to calculate costs is
FC + VC(Q) = TC, where FC is fixed costs, VC is variable costs, Q is quantity, and TC is
total cost
It is important to understand that variable costs, as opposed to fixed costs, are those costs
that change based on the amount of product being produced. For example, our bottled
water company has a variable cost in bottles. The more bottled water they produce, the
higher their cost associated with bottles will be.
2. Variable Cost/ Running Cost:
1 | P a g e
2. Variable costs are expenses that fluctuate proportionally with the quantity of output.
Variable costs are directly tied to the activities of producing volume, which rises when
these activities increase and falls when activities decrease. This effect can be related to
materials, labor, and sales commissions.
For example, if you produce spark plugs, the copper used in production is a variable cost.
This means if you stop producing spark plugs, you would no longer have the cost of
copper. Additionally, regardless of how many spark plugs you produce, the price of
copper for one spark plug remains unchanged.
Formula - Variable Cost
The formula to calculate variable cost is:
Total Variable Cost = Total Quantity of Output X Variable Cost Per Unit of Output.
Example :- HOSPITAL COSTING:
A concern of most countries is health sector resources: the sources of finance for health
services, the ability to maintain past funding levels, resource allocation patterns, and the
efficiency of health services delivery. In aggregate terms,
• hospitals utilize nearly half of the total national expenditure for the health sector;
• hospitals commonly account for 50 to 80 percent of government recurrent health sector
expenditure:
• hospitals use a large proportion of the most highly trained health personnel
A hospital is engaged in providing various types of medical services to the patients.
Hospital costing is applied to decide the cost of these services. A hospital may have following
departments for providing various types of services:
1
2 | P a g e
3. . Outdoor Patient Dept. (O.P.D)
2. Indoor Patient Department (Medical Wards).
3. Medical Services Department:
• X – Ray Department,
• Scanning Centre,
• Pathology Laboratory,
• Sonography Department.
4. General Services Departments:
• Bolier House,
• Power House,
• Catering department,
• Laundry Room,
• Administrative Department,
5. Miscellaneous Services Departments:
• Transport Department,
• Dispensary Department,
• General Porting Department.
UNIT OF COST:
The common units of costs of various departments in a hospital are as follows:
Department Unit of Cost
1. Outdoor Patient Department Per out-patient
2. Indoor Patient Department per Room-day
3. X – Ray Department Per 100 units
4. Scanning centre Per case
5. Pathology Laboratory Per 100 Requests
6. Laundry Department Per 100 items laundered
7. Catering Department Per Patient per week
The cost of hospital is divided into fixed and variable costs. Fixed costs include
staff salaries, depreciations of building, rent of building whereas variable cost
3 | P a g e
4. include light and power, water, laundry charges, food supplied to patients etc.
COST SHEET FOR MONTH/YEAR
A.
B
C.
D.
E.
FIXED STANDING COSTS
Salaries to staff ………….
Premises Rent ………….
Repairs and maintenance ………….
General administration Expenses .…………
Cost of Oxygen, X-Ray, etc. .…………
Depreciation .………..
RUNNING OR VARIABLE COSTS
Doctor’s fees …………
Food …………
Medicines …………
Diagnostic Services …………
Laundry .………..
Hire charges for Extra Beds .……….
TOTAL OPERATING COST
NO. OF PATIENTS DAYS
COST PER PATIENT DAY (C)+(D)
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
XX
XX
XX
XX
XX
Illustration 1:
Apollo Hospital runs an Intensive Care Unit in a hired building at a rent of Rs.
7500 p.m. The Hospital has undertaken to bear the cost of repairs and
maintenance.
The Intensive Care Unit consists of 35 beds and 5 more beds can be conveniently
accommodated whenever required. The permanent staff attached to the unit is as
follows:
2 Supervisors, each at a salary of Rs. 2500 p.m., 4 Nurses each at a salary of Rs.
2000 p.m., 4 Ward boys each at a salary of Rs.500 p.m.
Though the unit was open for the patients all the 365 days in a year but it was
found that only 150 days in a year, the unit has the full capacity of 35 patients
4 | P a g e
5. per day and for another 80 days it had on an average 25 beds only occupied per
day. But there were occasions when the beds were full, extra beds were hired
from outside at a charge of Rs. 10 per bed per day. This did not come to more
than 5 beds extra above the normal capacity any one day. The total hire charges
for the extra beds incurred for the whole year amounted to Rs. 7500.
The unit engaged expert doctors from outside to attend on the patients and fees
were paid on the basis of the number of patients attended and time spent by them
on an average worked out to Rs.25000 per month in the year 2013.
The other expenses for the year were as under:
Repairs and Maintenance (Fixed) Rs. 8100
Food supplied to patients (Variable) Rs. 88000
Janitor and Others Services for patients (Variable) Rs. 30000
Laundry Charges for their bed linen (Variable) Rs.60000
Medicines supplied (Variable) Rs. 75000
Cost Oxygen, X – Ray, etc., other
Then directly borne for treatment of patients (Fixed) Rs. 108000.
General Administration Charges allocated
To the unit (Fixed) Rs. 100000
1. Calculate the profit per patient day made by the unit in the year 2003 if the
unit recovered on the overall amount of Rs. 200 per day on an average from each
patient.
5 | P a g e
6. 2. The unit wants to work on a budget for the year 2004, but the number of
patients requiring intensive care is a very uncertain factory.
Solutions:
Calculation of No. of Patients days:
35 beds * 150 days = 5250
25 beds * 80 days = 2000
Extra bed days 7500 / 10 = 750
8000
STATEMENT OF COST
Particulars Rs Rs
1. Income Received (Rs. 200 * 8000 Patient days)
1600000
2. Variable Costs (Marginal Costs) Per Annum:
Food 88000
Janitor charges 30000
Laundry Charges 60000
Medicines supplied 75000
Doctors Fees (25000 *12) 300000
Hire Charges for extra beds 7500 560500
Contribution 1039500
3. Fixed costs
a. Salaries:
Supervisors (2 * 2500 * 12)
Nurses (4 * 2000 *12)
Ward Boys (4 * 500 * 12)
60000
96000
24000
b. Rent (7500 *12) 90000
c. Repairs and Maintenance 8100
d. Cost and oxygen etc. 108000
e. General Administration 100000 486100
553400
Profit per Patient-day = 553400 / 8000 patients’ days
= Rs. 69.175
6 | P a g e
7. Illustration:
Care Hospital operates a fitness center to provide counseling on nutrition,
exercise and health care for major surgery patients after their release from the
hospital. Average patient will make three visits to the center. Each visit lasts 40
minutes.
The hospital has estimated the following costs of operating the center:
Particulars Amt
Occupancy costs per month
Clerical costs per month
Other costs per month
Medication charges per patient
Records charge per patient
Staffing cost per visit
Computer record update per visit
18000
12000
4000
44
16
9
3
Hospital expects to have an average of 500 visits per month. What should be the
amount charged to each patient in order to cover the above costs?
Solution:
Particulars Amt
7 | P a g e
8. Indirect cost per month
Occupancy
Clerical
Other costs
A. Indirect costs per visit ( 34000/500)
Staffing cost per visit
Computer record update per visit
Total costs per visit
Visits per patient
B. Total cost per patient
Records charge per patient
Medication change per patient
C. Total average cost per patient
C. Or per patient (60+80) per visit
18000
12000
4000
3400
68
9
3____
80
3____
240
16
44____
300
3. Absolute Tonne – Km.
Absolute ton-kms is standard unit of measuring absolute units. Absolute
(weighted average) units are calculated by the total of tone-kms (or
quintal-kms, tone-mile etc), arrived by multiplying the distance with the
respective weight carried.
Absolute tone-km = Distance x Respective weight
4. Commercial Tonne – Km.
Commercial ton-kms is standard unit of measuring Commercial units.
Commercial (simple average) units are calculated by multiplying average
weight carried with the total distance travelled.
8 | P a g e
9. Commercial tone-km = Average weight x Total distance
Example:
A truck starts with a load of 10 tonnes of goods from station P. It unloads 4
tonnes at station Q and rest of the goods at station R. It reaches back directly
to station P after getting reloaded with 8 tonnes of goods at station R. The
distance between P to Q to R and then R to P is 40 Kms, 60 Kms and 80
Kms respectively. Compute Absolute Tonnes-Kilometers and Commercial
Tonnes- Kilometer.
Absolute Tonnes-Kilometers
= (10 tonnes*40km) + (6 tonnes*60km) + (8
tonnes*80 kms)
= 1400
Commercial Tonnes-Kms = Average Load × Total Kms Travelled
= 10+6+8/3 Tonnes×180 Kms.
= 1,440 Tonnes-Kms
Example
A lorry starts with a load of 20 tonnes of goods from station A. It unloads 8
tonnes at station B and rest of goods at station C. It reaches back directly to
station A after getting reloaded with 16 tonnes of goods at station C. The
distance between A to B, B to C and then from C to A are 80 kms, 120 kms.,
and 160 kms., respectively. Compute ‘Absolute tonnes-kms.,’ and
‘Commercial tonnes-kms.
9 | P a g e
10. Solution:
Absolute tonnes-kms. = 20 tonnes × 80 kms + 12 tonnes × 120 kms +16
tonnes × 160 kms.
= 5,600 tonnes-kms.
Commercial Tonnes-kms. = Average load × total kilometres travelled16
tonnes
=(20+12+16)/3) × 360 kms.
= 5,760 tonnes-kms.
5. Effective Passengers Kms:
Effective Kms = Run × Load = (One way trip (Km.) × Trip per day × Days
operated) × (Carriage capacity × Usage rate)
In case of passenger transport, Carriage capacity is in terms of seats; and
Cost unit is Effective Kilometers Per Passenger.
In case of goods transport, Carriage capacity is in terms of Tonnes; and Cost unit
is Effective Kilometers Per Tonne.
6. Cost Per Passenger Kms:
Cost Per Passenger Kms = Operating Cost ÷ Effective Kilometres
Example
From the following information calculate total kms and total passengers
Kms
No. of Buses=6
Days Operated in the month=25
Trips mage by each bus = 4
10 | P a g e
11. Distance of route 20 Kms (one way)
Capacity of Bus = 40 passengers
Normal passenger travelling 90% of capacity.
11 | P a g e
12. Solution:
Total Kms covered = Run
Distance * Two ways * No. of trips * No. of days * No. of buses
20 Kms * 2 * 4 *25 * 6 = 24000 Kms
Total passenger-Kms. Covered = Run * Load
Load = Maximum capacity* Used capacity = 40 * 90% = 36
Total Passenger Kms Covered = 24000*36
= 864000
Question 02. We help of suitable example. Explain how the decisions are made by
management under following situation.
1. Decision regarding optimum product mix.
When a factory manufactures more than one product, a problem is faced by management as to
which product mix will give maximum profits. The best product mix is that which yields the
maximum contribution. The products which give the maximum contribution are to be retained
and their production should be increased. The products, which give comparatively less
contribution, should be reduced or closed down altogether. The effect of sales mix can also be
seen by comparing the P/V ratio and breakeven point. The new sales mix will be favourable if it
increases P/V ratio and reduced the breakeven point.
Illustration: A manufacturer with an overall capacity of one lakh machine hours
(interchangeable among products) has so far been producing a standard mix of 15,000 units of
product A, 10,000 units of Product B and C each. The total expenditure exclusive of fixed
charges is Rs. 2.09 lakhs and variable cost ratio among the products approximates
1:1.5:1.75respectively per unit. The fixed charges came to Rs. 2.00 per unit. When the unit
11 | P a g e
13. selling prices are Rs. 6.25 for A, Rs 7.50 for B and Rs. 10.50 for C, he incurs a loss. He desires to
change the product mix as under:
Mix 1 Mix 2 Mix 3
A 18,000 15,000 22,000
B 12,000 6,000 8,000
C 7,000 13,000 8,000
As an accountant what mix will you recommend ?
Solution:
(i) Computation of variable cost per unit
Total variable cost of Rs. 2,09,000 will be apportioned among the three products in the following
ratio:
A 15,000 x 1= Rs.15000: B 10,000 x 1.5 = Rs. 15000 C 10,000 x 1.75 = Rs. 17,500
or 6:6:7
Hence, total variable cost of each product will be
A: 2,09,000 x 6/19 = Rs.66,000
B: 2,09,000 x 6/19 = Rs.66,000
C: 2,09,000 x 7/19 = Rs.77,000
And per unit variable cost of each product:
A: 66,000/15000= Rs. 4.40 per unit
B: 66,000/10,000 = Rs.6.60 per unit
C: 77,000/ 10,000 = Rs. 7.70 per unit
(ii) Computation of contribution per unit of each product:
Product A Product B Product C
Selling Price 6.25 7.50 10.50
Variable Cost 4.40 6.60 7.70
Contribution 1.85 0.90 7.80
12 | P a g e
14. (iii) It is assumed that the fixed cost of Rs. 70,000 (35,000 unit of present mix at Rs. 2) remains
constant for all proposed mixes.
Comparative profitability statement to evaluate here product mixes.
Product Contribut
ion rate
per unit
Mix 1 Mix 2 Mix 3
Units Total
Contributio
n
Units Total
Contributio
n
Units Total
Contribution
A
B
C
1.85
0.90
2.80
18000
12000
7000
33300
10800
19600
15000
6000
13000
27750
5400
36400
22000
8000
8000
40700
7200
22400
Contribution 63700 69550 70300
Less: Fixed
Charges
70000 70000 70000
Profit/(Loss) (6300) (450) 300
Note: It is evident from the above statement that Mix 3 gives the maximum total contribution
and gives a net profit of Rs.300 after recovering fixed cost hence Mix 3 is recommended.
2. Decision regarding Make or Buy
Make-or-Buy Business Decision or Make or buy decisions arise in business when a company
must decide whether to produce goods internally or to purchase them externally. This typically is
an issue when a company has the ability to manufacture material inputs required for its
production operations that are also available for purchase in the marketplace. For example, a
computer company may need to decide whether to manufacture circuit boards internally or
purchase them from a supplier.
When analyzing a make or buy business decision, it is necessary to look at several factors. The
analysis must examine thoroughly all of the costs related to manufacturing the product as well as
13 | P a g e
15. all the costs related to purchasing the product.Such analysis must include quantitative factors and
qualitative factors. The analysis must also separate relevant costs from irrelevant costs and look
only at the relevant costs. The analysis must also consider the availability of the product and the
quality of the product under each of the two scenarios.
A concern can utilize its idle capacity by making component parts instead of buying them from
market. In arriving at such a make or buy decision, the price asked by the outside suppliers
should be compared with the marginal cost of producing the component parts. If the marginal
cost is lower than the price demanded by the outside suppliers, the component parts should be
manufactured in the factory itself to utilize unused capacity. Fixed expenses are not taken in the
cost of manufacturing component parts on the assumption that have been already incurred, the
additional cost involved is only variable cost.
Factors that influence Make or Buy Decision
In make or buy decision the following cost and non‐cost factors must be considered:
1. Cost Factors:
(1) Availability of plant facility
(2) The space required for production
of item.
(3) Any special machinery or
equipment required.
(4) Cost of acquiring special know
how required for the item
(5) Any transportation involved due
to location of production
(6) As to labour factors like
availability of required labour, sheet
required and other must be kept in
14 | P a g e
16. view.
(7) As to overhead expenses,
adoption of lease for apportioning
them must be taken into
consideration including other factors.
15 | P a g e
17. 2. Non‐Cost Factors:
(1) In favour of making, the factors
like:
Secrecy of company
production
Ideal facility available
Tax considerations
Quality and stability of
market supply
(2) In favour of buying factors:
Lack of capital required
Wide selection
Passing know how to
suppliers or not
Uneven production of end
product.
(3) The outside supplier should not
be competitor.
(4) In case there are large fluctuation
in demand, it is better to purchase
from outside, but if demand is likely
to increase substantially own
production may lead to lower cost
latter.
18. Illustration: (Make or Buy Decision) Auto Parts Ltd. has an annual production of 90,000
units for a motor component. The component cost structure is as below:
Materials Rs. 270 per unit
Labour (25% fixed) 180 per unit
Expenses:
Variable 90 per unit
Fixed 135 per unit
Total 675 per unit
(a) The purchase manager has an offer from a supplier who is willing to supply the
component at Rs.540. Should the component be purchased and production stopped?
(b) Assume the resources now used for this component's manufacture are to be used to
produce another new product for which the selling price is Rs.485.In the latter case the
material price will be Rs.200 per unit. 90,000 units of this product can be produced at the
same cost basis as above for labour and expenses. Discuss whether it would be advisable to
divert the resources to manufacture that new product, on the footing that the component
presently being produced would, instead of being produced, be purchased from the market.
Solution: Rs.
Material 270
Labour (75% of Rs.180) 135
Variable expenses 90 .
Total variable cost when component is produced 495
Suppliers price 540
Excess of purchase price over variable cost = 540 – 495 = Rs.45 (a) Fixed expenses are not
affected whether the component is made or purchased. Thus company should make the
component itself because if purchased from outside it will have to pay Rs.45 per unit more
and on 90,000 units @ Rs.45 it comes to Rs.40,50,000.
(b) Cost implications of proposal to divert available production facilities for a new product:
Rs.
Selling price of per unit of new product 485
23 | P a g e
19. Less: Variable costs
Material 200
Labour 135
Expenses 90 425
Contribution per unit 60
Loss if present component is purchased = 540 – 495 = Rs.45.
If company diverts the resources for the production of a new product, it will benefit by Rs.15
(i.e. Rs.60 – 45) per unit. On 90,000 units it will save @ Rs.15 i.e. Rs.13,50,000. Thus, it is
advisable to divert the production facilities in the manufacture of the new product and the
component presently being manufactured should be bought from outside. This will result in
additional profit of Rs.13,50,000.
3. Decision regarding accept/reject a special order
One issue likely to be appropriate to all managers at some time in their careers is whether to
accept what we will refer to as a special order. By this we mean, ‘Are there circumstances in
which it might make sense in financial terms to sell products or services at a lower price than
normal, or alternatively, to provide a service internally at less than its full cost?’
In considering such decisions, it is most important to be quite clear about the meaning of the
term full cost. In many organisations external and internal prices for products and services are
generated with reference to the full or total cost of its provision plus a percentage margin, a
practice known as cost-plus pricing. Within the full cost, there will usually be allocated and
apportioned fixed overheads required to be covered, irrespective of whether a special order is
accepted. Such non-relevant costs must be ignored since the criteria for accepting a special
order must only consider whether the direct benefits which result, exceed those costs that
could be avoided by not taking it.
24 | P a g e
20. Such evidence, as exists from surveys of pricing, reveals that some organisations do accept
special orders using some form of the contribution analysis, although the bias towards its use
is not as significant as many textbooks would imply.
You should be aware that the acceptance of a special order with reference to direct costs and
benefits can be problematic if it generates a special order ‘culture’. If all orders are priced as
special, how will fixed overheads ever be recovered!
There are also other considerations to be taken into account that may have financial
consequences. For example, if it became widely known that special orders were negotiable
then the subsequent marketing and selling of products, or services, may be far more difficult,
and require a good deal more effort to be expended than currently.
Generally speaking, a special contract should not be accepted if it will affect consumer
behavior adversely within the same marketplace. General knowledge of the availability of
special orders may well lead to "consumer games" with the supplier. Special orders might
relate to Government contracts or customers in a separate market segment; possibly in an
overseas market.
4. Decisions regarding Key or Limiting Factor – Raw Material
A key factor is that factor which puts a limit on production and profit of a business. Usually
the limiting factor is sales. A concern may not be able to sell as much as it can produce. But
sometimes a concern can sell all it produces but production is limited due to shortage of
materials, labour, plant capacity or capital. In such a case, a decision has to be taken
regarding the choice of the product whose production is to be increased, reduced or stopped.
When there is no limiting factor the choice of the product will be on the basis of the highest
25 | P a g e
21. P/V ratio. But when there are scarce or limited resources, selection of the product will be on
the basis of contribution per unit of scarce factor of production.
Illustration:
A company manufactures and markets three products A, B and C. All the three products are
made from the same set of machines. Production is limited by machine capacity. From data
given below indicate priorities for products A, B and C with a view to maximizing profits.
Product A Product B Product C
Raw Material Cost per unit Rs.2.25 Rs.3.25 Rs. 4.25
Direct Labour cost per unit Re.0.50 Re.0.50 Re 0.50
Other variable cost per unit Re. 0.30 Re.0.45 Re.0.71
Selling price per unit Rs.5.00 Rs.6.00 Rs.7.00
Standard machine time required per unit 39 minutes 20 minutes 28 minutes
In the following year the company faces extreme shortage of raw materials. It is noted
that 3kg, 4kg and 5 kg of raw materials are required to produce one unit of A, B and C
respectively. How would products priorities change?
Solution
Products
Current Year A B C
Selling price per unit 5.00 6.00 7.00
Less Marginal cost per unit
Raw materials cost 2.25 3.25 4.25
Direct labour cost 0.50 0.50 0.50
Other variable cost 0.30
3.05
0.45
4.20
0.71
5.46
Contribution per unit 1.95 1.80 1.54
Standard machine time
required per unit (minutes)
39 20 28
Contribution per machine
Minute
5 paise 9 paise 5 ½ paise
Priorities for products III I II
Following year
Raw materials required to
produce one unit
3 kg 4 kg 5 kg
Contribution per kg of raw 65 paise 45 paise 30.80 paise
26 | P a g e
22. Material
Priorities for products I II III
5. Decisions regarding Limiting factor and key factor- Labour
Example:
Sausage makes two products, the Mash and the Sauce. Unit variable costs are as follows.
Mash Sauce
Rs. Rs.
Direct materials 1 3
Direct labour (Rs.3 per hour) 6 3
Variable overhead 1 1
8 7
The sales price per unit is Rs.14 per Mash and Rs.11 per Sauce. During July the available
direct labour is limited to 8,000 hours. Sales demand in July is expected to be as follows.
Mash 3,000 units
Sauce 5,000 units
Required:
Determine the production budget that will maximize profit, assuming that fixed costs per
month are Rs.20,000 and that there is no opening inventory of finished goods or work in
progress.
Solution:
1. Determine the limiting factor
Mash Sauces Total
Labour hours per unit 2 hrs 1 hr
Sales demand 3,000 units 5,000 units
Labour hours needed 6,000 hrs 5,000 hrs 11,000 hrs
Labour hours available 8,000 hrs
Shortfall 3,000 hrs
27 | P a g e
23. Labour is the limiting factor on production.
2. Identify the contribution earned by each product per unit of scarce resource, that is, per
labour hour worked.
Mash Sauce
Rs. Rs.
Sales price 14 11
Variable cost 8 7
Unit contribution 6 4
Labour hour per unit 2 hrs 1 hr
Contribution per labour hour (= per unit of limiting factor) Rs.3 Rs.4
Ranking 2 1
3. Determine the budgeted production and sales.
Product Units Hours needed Contribution per unit Total
Rs. Rs.
Sauces 5,000 5,000 4 20,000
Mashes (Bal.) 1,500 3,000 6 9,000
8,000 29,000
Less: fixed costs 20,000
Profit 9,000
Conclusion:
(1) Unit contribution is not the correct way to decide priorities.
(2) Labour hours are the scarce resource, therefore contribution per labour hour is the correct
way to decide priorities.
(3) The Sauce earns Rs.4 contribution per labour hour, and the Mash earns Rs.3 contribution
per labour hour. Sauces therefore make more profitable use of the scarce resource, and should
be manufactured first.
6. Decisions regarding Limiting factor and key factor- Machine Hours
In the examples which we have examined so far, the selection of alternative courses of action
has been made on the basis of seeking the most profitable result. Business enterprises are
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24. limited in the pursuit of profit by the fact that they have limited resources at their disposal, so
that quite apart from the limitation on the quantities of any product which the market will buy
at a given price, the firm has its own constraints on the volume of output. Hence at a given
price, which may be well above costs of production, the firm may be unable to increase its
overall profit simply due to its inability to increase its output.
The limiting factors which affect the level of production may arise out of shortages of labour,
material, equipment and factory space to mention but a few obvious examples. Faced with
limiting factors of whatever nature, the firm will wish to obtain the maximum profit from the
use of the resources available, and in making decisions about the allocation of its resources
between competing alternatives, management will be guided by the relative contribution
margins which they offer. Since the firm will be faced with limiting factors, however, the
contribution margins must be calculated not in terms of units of product sold which fail to
reflect constraints on the total volume of output, but should be related to the unit of quantity
of the most limited factor. A simple example will serve to explain this point.
Example
Multiproduct Ltd manufactures three products about which is derived the following data:
Product Machine hours required per unit - Margin per unit - Margin per mac. hour
A 3 hours Rs.9.0 Rs.3.0
B 2 hours Rs.7.00 Rs.3.5
C 1 hour Rs.5.00 Rs.5.0
The three products can be made by the same machine, and on the basis of this information, it
is evident that product C is the most profitable product yielding a contribution of Rs.5 per
machine hour, as against product A, which shows the smallest contribution per machine hour.
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25. Hence, in deciding how to use the limiting factor the firm should concentrate on the
production of product C, rather than products A and B. If there were no limits to the market
demand for product C, there would be no problem in deciding which product to produce-it
would be product C alone.
Firms undertake the manufacture of different products because the market demand for any
one product is limited, so that firms seek to find that product-mix which will be the most
profitable. Let us assume that the maximum weekly demand for the three products and the
total machine capacity necessary to meet this demand is as follows:
Product Maximum demand in Machine hours - Product units equivalents
A 100 300
B 100 200
C 100 100
This product-mix reflects the order of priority in allocating machine use to the products with
the highest contribution margin per hour. Product C receives the highest priority, then product
B, and lastly product A. If machine hours were further limited to 300 hours, the firm would
cease to make product A.
For example, if raw material is the limiting factor, the profitability of each product is
determined by contribution per Kg of raw material. If machine capacity is a limiting factor
then contribution per machine hour is calculated. It electricity is the limiting factor, then
contribution per unit of electricity of each product is calculated.
Question 03. Differentiate between Non- integral accounting system and Integral
accounting system on the basis of following points-
a) Nature and Features
b) Advantages of each system of Accounts
c) Books to be maintained in each system of accounts.
Solution:-
I. Nature and Features
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26. A. Non-Integrated Accounting System
It is a system of accounting under which separate ledgers are maintained for cost and
financial accounts by Accountants. This system is also referred to as cost ledger accounting
system. Under such a system the cost accounts restricts itself to recording only those
transactions which relate to the product or service being provided. Hence items of expenses
which have a bearing with sales or, production or for that matter any other items which are
under the factory management are the ones dealt with in such accounts. This leads to the
exclusion of certain expenses like interest, bad debts and revenue/income from ‘other than the
sale of product or service’.
A special feature of the non-integrated system of accounts is its ability to deal with
notional expenses like rent or interest on capital tied up in the stock. The accounting of
notional rent facilitates comparisons amongst factories (some owned and some rented).
Non-Integrated Accounting Systems contain fewer accounts when compared with financial
accounting because of the exclusion of purchases, expenses and also Balance Sheet items like
fixed assets, debtors and creditors. Items of accounts which are excluded are represented by
an account known as Cost ledger control account.
B. Integrated (or Integral) Accounting System
Integrated Accounts is the name given to a system of accounting, whereby cost and financial
accounts are kept in the same set of books. Obviously, then there will be no separate sets of
books for Costing and Financial records. Integrated accounts provide or meet out fully the
information requirement for Costing as well as for Financial Accounts. For Costing it
provides information useful for ascertaining the Cost of each product, job, process, operation
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27. of any other identifiable activity and for carrying necessary analysis. Integrated accounts
provide relevant information which is necessary for preparing profit and loss account and the
balance sheets as per the requirement of law and also helps in exercising effective control
over the liabilities and assets of its business.
The following are the essential features of an integral an accounting system:
1. This system records financial transitions not normally required for cost accounting be sided
recording internal costing transaction prepayments and accruals are opened.
2. Stores transactions are recorded in the stores control account.
This account is debited with the cost of stores purchased corresponding credit being given to
cash or sundry creditors depending whether the purchase is made for cash or on credit.
3. Wages control account is debited with the wages paid, contra credit is taken in cash or bank
account
4. Overhead expenses are debited to the overhead control account, corresponding credit being
given to cash or band account or the sundry creditors.
5. Transactions relating to material, labour cost overheads are posted in the stores wages and
overhead control account after making suitable cost analysis and tat the end of the period
transfer of the totals is made to the work in progress accounts by crediting various control
accounts. The day to day cost analysis made for this purpose is known as making third etc.
These entries do not mean entries in the same sense a entry of transaction in the ledger but
such entries are simply a sort of cash analysis.
6. All advance payments are credited and accruals debited to the respective control account
by contra entries in the prepayments and accrual accounts.
7. Capital asset account is debited and respective control accounts are credited in the process
of cost analysis of capital expenditure.
II. Advantages of each system of Accounts
A. Non-Integrated Accounting System
The following are some of the advantages of interlocking accounting system:
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28. a) When separate set of costing books are maintained it facilitates ready accomplishment of
its objectives’ If avoids the complications or recording the entries if it is integrated with
financial accounts.
b) It can be maintained according to convenience as it need not be statutorily maintained
The following are some of the limitations
a) When cost accounts are independently maintained, it amounts to duplication of expenses
along with financial accounts.
b) The profit shown by cost books may vary with that shown by financial accounts. This
requires reconciliation which involves time and effort.
B. Integrated Accounting System
The following are the main advantages of integral accounting:
a. There is no need to reconcile the profit ascertained by the cost accounts with that of
financial accounts since only one profit and loss account is prepared from the information
recorded in the cost accounts.
b. There is no duplication of recording and effort as in non integral system and as such this
system is simple and economical.
c. This system tends to coordinate the functions of different selections of the accounts
department since all efforts are integrated and directed towards achievement of one aim that
is providing a high level of efficiency.
d. The accounting procedures can be simplified and the system can be centralised with the
object of achieving a greater control over the organization.
e. The system creates conditions which are eminently suitable for the introduction of
mechanized accounting.
f. There is no possibility of overlooking any expense under the system .
g. As cost accounts are posted straight from the books of original entry, there is no delay in
obtaining the data.
h. There is automatic check on the correctness of the cost data. It ensures that all legitimate
expenditure is included in Cost accounts and reliable and proved data is provided to the
management for its decisions’.
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29. i. Integrated accounting widens the outlook of the accountant and his staff ad they can take
broader view of things.
III. Books to be maintained
A. Non-Integrated Accounting System
Subsidiary books maintained under interlocking system of accounting:
The following are some of the subsidiary books maintained under interlocking system of
accounting:
1) Stores ledger; this ledger is used to record both the quantity and amount of receipts, issues
and balance of materials and supplies. The basis for recording the transactions are (a)
Materials received note (b) Material transfer note, and (d) Material returned note.
2) Payroll and wage analysis book; this ledger is used to record the wages. The basis for
recording the transactions are (a) clock cards,(b)time tickets, and (c)piece work tickets
3) Job ledger: this ledger is used to record the material cost, wages, and overheads incurred in
respect of a job.
4) Finished goods stock ledger: This ledger is used to record the receipt of finished goods
from production department, the sale and stock of finished goods both in terms of quantity
and value.
The basis for recording the transactions is delivery note issued by the production
departments, sales returns note and sales order requisitions.
5) Standing order ledger: This ledger is used to record overheads incurred.
Accounts Maintained Under Cost Books
The following important accounts are maintained under cost books:
1) General ledger adjustment account: This ledger is also known as cost ledger control
account or nominal ledger control account. In this accounts transactions with only one entry
is recorded and contra appears in financial book. On the credit side of this account are
recorded
(a) Opening Balance of materials, work in progress and finished stock, (b) expenses of
material, wages and overheads on the credit side, (c) on the debit side returns of materials to
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30. the supplier, (d) sales income: and (e) on the debit side balancing entries of P&L accountant
closing stock.
2) Stores ledger control account: the total of stores ledger is entered in this account.
3) Wages control account: In this account the wages accrued and paid and allocation of wages
in this account are recorded.
4) Work in progress control account: This account represents cost ledger in summary form.
5) Finished goods stock ledger control account: This account represents finished goods stock
ledger transactions in total form.
6) Selling, distribution, and administration overhead control account:”This account represents
selling, distribution and administration overheads
B. Integrated Accounting System
In non-integral system, a cost control account or general ledger adjustment account is used in
cost ledger. In this system, general ledger adjustment account is eliminated and detailed
accounts for assets and liabilities are maintained. In other words, following accounts are used
for “General Ledger Adjustment Account” of non-integrated system:
(a) Bank account
(b) Debtors account
(c) Creditors account
(d) Provision for depreciation account etc.
In integrated system, all accounts necessary for showing classification of cost will be used
but the general ledger adjustment account of non-integrated accounting is replaced by use of
following accounts:
(a) Bank account
(b) Debtors account
(c) Creditors account
(d) Provision for depreciation
account
(e) Fixed assets account
(f) Share capital account
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31. Accounts to be opened in the Integral Accounting System are as
follows:-
1. Store ledger control
account
2. Wages control account
3. Factory Overheads
Control Account
4. Work in Progress
Control Account
5. Office and
Administrative
Overheads Control
Account
6. Finished Goods Control
Account
7. Selling and Distribution
Overheads Control
Account
8. Cost of Sales Account
9. Sales Account
10. Costing Profit and Loss
Account
11. All remaining accounts.
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32. Question 04 :- With the help of example, prepare journal and various ledger accounts under
Integral Accounting System and Non- Integral Accounting System.
Solution:-
I. Integral Accounting System
Following transactions took place in Lovely & Co. during the month of March, 2013 :
1. Raw material purchased on credit 40,000
2. Direct material issued to production 30,000
3. Wage paid (30% indirect) 24,000
4. Manufacturing expenses incurred (cash) 16,800
5. Manufacturing overhead charged to production 16,000
6. Selling and distribution cost (cash) 4,000
7. Finished goods at cost 40,000
8. Sales 58,000
9. Receipts from debtors 13,800
10. Payments to creditors 22,000
You are required to journalise the above transactions.
Solution:-
Lovely & Co.
Journal (Integral Accounting System)
Dr. Cr.
1. Stores Control A/c Dr. 40,000
To Creditors A/c 40,000
(Being the raw material purchased on credit)
2. Work-in-progress A/c Dr. 30,000
To Stores Control A/c 30,000
(Being the material issued to jobs)
3. (a) Wages Control A/c Dr. 24,000
To Cash 24,000
(Being the entry for direct and indirect wages paid)
3. (b) Work-in-progress A/c Dr. 16,800
Production overhead A/c Dr. 7,200
To Wages Control A/c 24,000
(Being the entry for direct and indirect wages)
4. Production overhead A/c Dr. 16,800
To Cash 16,800
(Being the production overhead incurred)
5. Work-in-progress A/c Dr. 16,000
To Production overhead A/c 16,000
(Being the overhead charged to production)
6. Selling and Distribution overhead A/c Dr. 4,000
33. To Cash 4,000
(Being the selling and distribution expenses Incurred)
7. Finished goods A/c Dr. 40,000
To work-in-progress A/c 40,000
(Being the cost of production of finished goods)
8. Debtors A/c Dr. 58,000
To Sale A/c 58,000
(Being the amount of sale)
9. Bank A/c Dr. 13,800
To Debtors A/c 13,800
(Being the receipt from debtors)
10. Sundry Creditors A/c Dr. 22,000
To Cash 22,000
(Being the amount paid to creditors)
II. Non- Integral Accounting System or Cost Ledger Accounting System
From the following balances and transactions extracted from the books of East-West
Company Ltd., journalize and write up the accounts in the cost ledger and prepare a trial
balance as at 31st December 2014. Also show the profit or loss for the month:
Dr. Cr.
Balances as on 1.12.2014:
Work-in-progress a/c 5,200
Finished goods a/c 2,300
Factory overhead suspense a/c 50
Office overhead suspense a/c 30
Stores ledger control a/c 1,150
General ledger adjustment a/c 8,730
8,730 8,730
Transactions for the month were: Rs.
Direct wages 7,500
Indirect wages 500
Works overhead absorbed in production 2,200
Office overhead absorbed in production 1,200
Stores issued to production 4,900
Goods finished during the month 18,000
Finished goods sold 21,000
Stores purchased 5,000
Stores issued to factory repair orders 200
34. Carriage inwards on stores issued for production 80
Factory expenses 1,450
Office expenses 1,170
Solution:
JOURNAL ENTRIES
1. Work-in-progress ledger control a/c Dr. 5,200
Finished goods ledger control a/c Dr. 2,300
Factory overhead suspense a/c Dr. 50
Office overhead suspense a/c Dr. 30
Stores ledger control a/c Dr. 1,150
To general ledger adjustment a/c 8,730
(Being the opening entries for the balances)
2. Stores ledger control a/c Dr. 5,000
To general ledger adjustment a/c 5,000
(Being stores purchased)
3. Work-in-progress ledger control a/c Dr. 4,980
To stores ledger control a/c 4,980
(Being the stores issued to production Rs. 4,900 and
carriage inward on stores issued Rs. 80)
4. Factory overhead control a/c Dr. 200
To stores ledger control a/c 200
(Being stores issued to factory repairs)
5. Work-in-progress ledger control a/c Dr. 7,500
To wages control a/c 7,500
(Being direct wages charged to production)
6. Factory overhead control a/c Dr. 500
To wages control a/c 500
(Being indirect wages charged to factory overhead)
7. Wages control a/c Dr. 8,000
To general ledger adjustment a/c 8,000
(Being the total wages brought into costing book from
financial books)
8. Factory overhead control a/c Dr. 50
To factory overhead suspense a/c 50
(Being the latter transferred to former a/c)
9. Factory overhead control a/c Dr. 1,450
To general ledger adjustment a/c 1,450
(Being the actual factory expenses brought into costing books)
35. 10. Work-in-progress ledger control a/c Dr. 2,200
To factory overhead control a/c 2,200
(Being the overheads charged to production)
11. Office overhead control a/c Dr. 30
To office overhead suspense a/c 30
(Being suspense a/c transferred to former a/c
12. Office overhead control a/c Dr. 1,170
To general ledger adjustment a/c 1,170
(Being the actual office overheads brought into costing
books)
13. Work-in-progress ledger control a/c Dr. 1,200
To office overhead control a/c 1,200
(Being the office overheads charged to production)
14. Finished goods control a/c Dr. 18,000
To work-in-progress ledger control a/c 18,000
(Being the work-in-progress transferred to former a/c)
15. Cost of sales a/c Dr. 20,300
To finished goods control a/c 20,300
(Being the finished stock transferred to former a/c)
16. Costing profit & loss a/c Dr. 20,300
To cost of sales a/c 20,300
(Being cost of sales transferred to profit & loss a/c)
17. General ledger adjustment a/c Dr. 21,000
To costing profit & loss a/c 21,000
(Being the amount of sales brought into costing
profit & loss a/c)
18. Costing profit & loss a/c Dr. 700
To general ledger adjustment a/c 700
(Being the amount of profit)
COST LEDGER
GENERAL LEDGER ADJUSTMENT A/C
To costing P & L a/c 21,000 By balance b/d 8,730
To balance c/d 4,050 By stores ledger control a/c 5,000
By wages control a/c 8,000
By factory overhead control a/c 1,450
By office overhead control a/c 1,170
By costing P & L a/c 700
25,050 25,050
36. STORES LEDGER CONTROLACCOUNT
To balance b/d 1,150 By WIP ledger control a/c 4,980
To general ledger adjustment a/c 5,000 By factory overhead control a/c 200
By balance c/d 970
6,150 6,150
WAGES CONTROLACCOUNT
To general ledger adjustment a/c 8,000 By WIP ledger control a/c 7,500
By factory overhead control a/c 500
8,000 8,000
FACTORY OVERHEAD CONTROLACCOUNT
To stores ledger control a/c 200 By WIP ledger control a/c 2,200
To wages control a/c 500
To factory overhead suspense a/c 50
To general ledger adjustment a/c 1,450
2,200 2,200
OFFICE OVERHEAD CONTROLACCOUNT
To office overhead suspense a/c 30 By WIP ledger control a/c 1,200
To general ledger adjustment a/c 1,170
1,200 1,200
WORK-IN-PROGRESS LEDGER CONTROLACCOUNT
To balance b/d 5,200 By finished goods control a/c 18,000
To stores ledger control a/c 4,900 By balance c/d 3,080
To wages control a/c 7,500
To factory overhead control a/c 2,200
To office overhead control a/c 1,200
21,080 21,080
FINISHED GOODS CONTROLACCOUNT
To balance b/d 2,300 By cost of sales a/c 20,300
To WIP ledger control a/c 18,000
20,300 20,300
COST OF SALES ACCOUNT
To finished goods control a/c 20,300 By costing P & L a/c 20,300