What is Labour costs requiring particular treatment?Holiday together with opor-garai pay
Idle time When the workers produce non perform the operate but science they are to last paid the wages, such fourth dimension is called the idle time. Idle is the hard betwixt the fourth dimension for which they are truly pad together with t
The idle fourth dimension tin sack last divided into 2 types as given below:
a. Normal idle time: the idle fourth dimension that is caused due to the normal causes similar the nature of production, available of raw materials together with production procedure is called the normal idle time. The next are merely about of the illustration of normal idle time.
• The fourth dimension betwixt the mill gate together with normal idle time.
• The waiting fourth dimension earlier the operate is started.
• The waiting fourth dimension earlier the machine larn started.
• The fourth dimension betwixt the 2 works.
• The idle fourth dimension caused due to maintenance of machinery.
• For the fulfillment of personal needs similar tea taking, toileting etc.
b. Abnormal idle time: the idle fourth dimension that is the termination of merely about abnormal situations is called the abnormal idle time. Such idle fourth dimension is non the output of the production process. These types of idle fourth dimension emerge due to the next reasons.
• A really long maintenance of the machinery.
• Strike together with lockout past times workers.
• No furnish of electricity, H2O etc.
• No furnish of raw materials.
• No availability of tools together with equipment as required.
• No fourth dimension pedagogy past times the supervisors to the workers.
Accounting for Idle Time
The accounting of the normal together with abnormal idle fourth dimension are maintained differently.
a. Accounting for normal idle time: the means of maintaining the tape of normal idle fourth dimension is mentioned below:
Accounting for Idle Time
The accounting of the normal together with abnormal idle fourth dimension are maintained differently.
a. Accounting for normal idle time: the means of maintaining the tape of normal idle fourth dimension is mentioned below:
b. Accounting for abnormal idle time: the reward paid for the abnormal idle fourth dimension is regarded as abnormal loss together with debited to lucre together with loss account.
Control of idle time
• Development of proper production plan.
• Regular checking of the sources of water, electricity, fuels etc.
• Effective utilization of the idle fourth dimension card.
• Cordial human relationship amongst the suppliers together with repair together with antennae department.
Overtime
= normal fourth dimension x normal charge per unit of measurement + overtime x overtime rate
Treatment of overtime wages
Control of idle time
Generally, effective supervision together with direction assist to trim the normal idle time. To command the abnormal idle time. Proper attending has to last paid for material, equipment together with fuel/power. The next are merely about of the stair out that tin sack last taken for command the idle time.
• Discourage the tendencies of waiting fourth dimension through effective supervision together with direction.• Development of proper production plan.
• Regular checking of the sources of water, electricity, fuels etc.
• Effective utilization of the idle fourth dimension card.
• Cordial human relationship amongst the suppliers together with repair together with antennae department.
Overtime
Over together with to a higher house the normal working hours, if a worker spends to a greater extent than fourth dimension on the undertaking it is by together with large know as overtime. For example, inwards a mill the workers are required to operate for 8 hours a hateful solar daytime but if a worker is asked to operate 10 hours a day, the fourth dimension of 2 hours volition last treated as overtime. In Nepal, if a worker industrial plant to a greater extent than than ix hours inwards a or for to a greater extent than than 48 hours inwards a week, he is tread to last engaged inwards overtime. The reward charge per unit of measurement of overtime operate to last paid is double to a worker of his the world hourly rate. The overtime labour costs are treated as role of direct reward or indirect reward depending upon the nature of labour, i.e. direct or indirect.
Total reward = normal reward + overtime wages= normal fourth dimension x normal charge per unit of measurement + overtime x overtime rate
Treatment of overtime wages
As pointed out, overtime is by together with large paid at a higher charge per unit of measurement than the normal time. The overtime reward consist of normal reward ' and' overtime premium'. The normal reward from the role of the direct wages, but the overtime failure premium should last treated inwards the next manner.
i. Where the overtime operate choke necessary to consummate a undertaking inside a specified engagement as required past times the customer, the overtime premium or overtime toll should last direct charged to the undertaking concerned past times means of direct wages.
ii. Where the overtime operate choke necessary as a termination of full general pull per unit of measurement area of work, the overtime premium should last treated as an item of overheads.
iii. Where the overtime operate becomes necessary on draw of piece of work organisation human relationship of error planning inwards a department, the overtime premium or toll should last treated as an item of subdivision overheads.
iv. Where overtime work is due to abnormal causes, i.e., flood, burn downwards etc., the overtime toll should last charged to the costing lucre together with loss account.
Holiday together with opor-garai pay
Employees are entailed for merely about holidays together with vacations inwards close all organizations. The catamenia of vocations together with holidays volition out last inwards a item proportion to production labour all to time. For this reason, vocation together with opor-garai pay calls for particular accounting treatment. Payment, which volition last due to an employee during vacations together with holidays, is conspired as overtime. It is spread over the production for the whole year, no unmarried role of a item catamenia should deport undue budge on this opor-garai per should to the undertaking directly.
Fringe benefits
Fringe benefits are service together with fiscal compensation given to employees but non direct related to employees' performance. Fringes items involve added labour toll to the employer but are non direct wage payments to employees. Fringes benefits included the following:
Accounting handling of fringes Benefits
There are iii methods of accounting of fringes benefits:
a. Treatment as manufacturing overheads.
b. Treatment as a separate class of overheads.
c. Part of the world reward of the employees.
The utilization of kickoff method (treating these costs similar other manufacturing toll items) has the advantages of simplicity, but the disadvantage of hiding these costs nether the maze of other manufacturing overhead items. If a charge per unit of measurement other than direct labour toll is used for resources allotment of fringe produce goodness cost, it may distort production cost. T rating fringes benefits toll as a separate class of overheads required additional efforts but volition termination inwards to a greater extent than accurate costing of products together with services.
Treating fringes benefits cost as additional to the the world wage is the most accurate method of charging these costs to production. This method correctly charges to production the toll of keeping employees including fringe benefits costs.
Profit sharing
The lucre sharing schemes of remuneration are gaining much popularity these days. In additional to the wages, which the workers commonly receive, a portion is given to the workers inwards the profits of the firm. This enable the workers to operate amongst tartar involvement together with enthusiasms inwards the mill because at that spot is a relation betwixt their operate together with higher production leading to higher profits to the management, which inwards plough shall pick out a greater portion to them to them as additional remuneration. Workers these days also lay their claim for a scheme of lucre sharing as they are witting of the fact that on draw of piece of work organisation human relationship of their efforts, the production is increased together with the reward of increment output goes exclusively to the pockets of management.
Workers' portion inwards the cyberspace lucre of the f theatre tin sack last calculated on whatsoever of the next basis:
i. A fixed percent of yearly cyberspace profits of the theatre may last allowed to workers employed inwards the mill at the cease of the accounting year. Interest on majuscule together with the transfer to full general together with other reserves tin sack last provided out of cyberspace profits earlier this percentage.
ii. The lucre earned past times the mill may last calculated department-wise together with the workers working inwards a item subdivision may last given a fixed percentages portion inwards the lucre earned past times that department.
iii. Profit may last computed per unit of measurement of output together with a role of lucre may last allowed to workers on this basis.
Advantages of lucre sharing
The advantages of lucre sharing are:
i. Increase inwards production due to to a greater extent than efforts of workers,
ii. Low labour turnover,
iii. Higher moral of the workers resulting inwards less employer-employee comfits,
iv. Greater attention inwards us of tools together with equipment,
v. Better squad operate together with greater co-operation,
vi. Better efficiency,
vii. A full general increment inwards welfare of monastic say as a whole.
Accounting handling of lucre sharing
Strictly speaking profit-sharing mans appropriation of lucre together with hence such amount should last excluded from toll accounts. However, inwards Nepal, the extra amount of profit-sharing may hateful payment of statures bonus i.e., 10% of cyberspace lucre to industrial plant (under the payment of Bonus Act). In such a illustration it tin sack last dealt inwards iii ways inwards toll accounts:
i. The minimum bonus payable to the indirect worked nether the payment of bonus deed may last treated as an item of overhead. However, the extra amount given inwards excess of he statuary minimum last excluded from toll accounts because this is an appropriation of profits.
ii. The statuary minimum bonus payable to direct workers may last taken as a direct accuse past times suitable inflating him reward rate. Any amount inwards excess of the minimum bonus to direct workers may last taken as a production overhead.
iii. The amount of minimum statutory bonus payable side past times side yr may last estimated inwards advance together with the amount payable to direct workers may last taken as a taken as a accuse past times inflating the reward rate. The balance of the amount (i.e., payable to indirect workers) may last taken as overhead. The deviation betwixt the amount actual paid together with estimated amount last adjusted into overheads. However, bonus over together with to a higher house the minimum bonus last excluded from toll draw of piece of work organisation human relationship inwards observe of all direct as good as indirect workers.
The whole amount of bonus may last taken as overhead.
1. Write whatsoever iii merits together with demerits of house reward systems.
The primary advantages of slice charge per unit of measurement scheme are as follows:
a. Simplicity: it is a elementary to operate together with like shooting fish in a barrel to understand.
b. Incentive to workers: This scheme provides an incentive to the workers to operate hard as the reward are paid on the the world of quantity of output non on the the world of time.
c. Ascertainment of accurate labour cost: since the reward are paid on the the world of output, the exact toll of labour per unit of measurement of output tin sack last ascertained.
This scheme has the next disadvantages:
i. Less attending to quality: as the payment of reward is made on the the world of output, the workers, inwards monastic say to maximum their output, operate amongst a feel of hurry, which may touching on the lineament of the output adversely.
ii. Inefficient utilization of machine together with materials: since the reward are paid on the the world of quantity of output, an excessive wastage of materials together with frequent breakdown of machine may last causes past times the workers due to their efforts to obtain maximum output.
iii. No grantee of minimum wages: since at that spot is direct human relationship betwixt quantity of output together with wages, the workers endure of they autumn to operate efficiently. There is no guarantee of minimum daily reward to workers.
2. Write whatsoever iii merits together with demerits of fourth dimension wage system.
A fourth dimension reward scheme has the next advantages:
A. Simplicity: it is really like shooting fish in a barrel to empathise together with elementary to calculate the earnings' of worker nether this method.
B. Guarantee of minimum workers: it guarantees a minimum reward to the workers.
C. Quality production: since the amount of reward is non linked amongst the lineament of output, this method ensures production of amend lineament due to the careful attending of the workers. This fourth dimension wage scheme has the next disadvantages:
i. No incentive to the efficient workers: this scheme lacks incentive to efficient workers since all workers are paid as together with no dictions are made betwixt efficient together with inefficient workers.
ii. Go-slow policy: The worker, inwards monastic say to earn higher reward for overtime work, may test to perform the operate like shooting fish in a barrel which leads to increment inwards labour toll per unit.
iii. Dissatisfaction amid the efficient works: the efficient workers are paid reward at the charge per unit of measurement equal to these payable to insufficient workers. Which creates dissatisfaction amid the efficient workers?
3. Mention the essential features of goods reward systems
The features of a skilful scheme of reward payment are mentioned below:
a. Suitable for both employer together with employees
b. Simple to empathise together with like shooting fish in a barrel to apply
c. Economical system
d. Guarantee minimum wages
e. Assure the equal reward for elementary job.
f. Encourage the competent workers.
g. Accepted the competent workers.
h. In accordance amongst the depression of country.
i. Flexible.
4. What is meant past times preventive together with replacement toll of labour turnover? How are they treated?
Preventive costs announce the costs, which are incurred to foreclose excessive labour turnover past times keeping a satisfied labour force. These are the costs which are incurred inwards monastic say to choke on the worker satisfied together with thus to deed as a discouragement against leaving employment.
Replacement costs refer to the costs of the recruitment, preparation together with absorption of novel workers.
Preventive costs should last charged as a industrial plant overhead item together with apportioned to dissimilar departments on the the world of lay out of workers engaged inwards each department. Replacement toll should also last treated on the same the world if they arise on draw of piece of work organisation human relationship of curt sighted policy of the management. However, if they arise on draw of piece of work organisation human relationship of the error of it item department, they should last alter direct to that department.
5. Give whatsoever 4 examples of preventive toll together with replacement cost.
Preventive costs:
• Cost of personnel administration.
• Cost of medical services.
• Cost of welfare activities.
• Cost of gratuity together with pension schemes.
Replacement costs:
• Cost of recruitment cease preparation of novel workers.
• Loss of output due to interruption together with inefficiency of novel workers.
• Cost of wastage, fighting together with defective work.
• Compensation due to frequent accidents.
6. What produce you lot hateful past times idle time? How it is treated?
When the workers produce non perform the operate but notwithstanding they are to last paid the wages, such fourth dimension is called the idle time. Idle fourth dimension is the deviation betwixt the times for which they are truly paid the fourth dimension they truly work. For example, it is workers is hours only, the deviation of 1 lx minutes is termed as idle time. Idle fourth dimension arises due to the shortage of material, breakdown of machinery, strikes etc. the ways of treating the idle fourth dimension are mentioned below:
First method (Assume as Direct Labour)
Influenza A virus subtype H5N1 separate tape is non maintained rather the charge per unit of measurement of reward is increased. For example, a worker gets Rs 120 past times workers for 8 hours inwards a day. If he industrial plant for half-dozen hours only, the idle fourth dimension is 2 hours, at nowadays the previous charge per unit of measurement i.e. Rs 120÷ 6= Rs twenty together with the records is maintained accordingly.
Second method (Assume mill Examples)
Under this, the reward for the production fourth dimension is regarded as direct reward together with the reward paid for the idle fourth dimension is regulated as mill expenses. For example, a worker larn Rs120 per hateful solar daytime for 8 hours i.e. Rs120 ÷ 8 = Rs xv per hour. Now, half-dozen x Rs15= Rs90 is regarded as direct reward together with 2xRs xv = Rs30 is regarded as mill expenses.
The primary advantages of slice charge per unit of measurement scheme are as follows:
a. Simplicity: it is a elementary to operate together with like shooting fish in a barrel to understand.
b. Incentive to workers: This scheme provides an incentive to the workers to operate hard as the reward are paid on the the world of quantity of output non on the the world of time.
c. Ascertainment of accurate labour cost: since the reward are paid on the the world of output, the exact toll of labour per unit of measurement of output tin sack last ascertained.
This scheme has the next disadvantages:
i. Less attending to quality: as the payment of reward is made on the the world of output, the workers, inwards monastic say to maximum their output, operate amongst a feel of hurry, which may touching on the lineament of the output adversely.
ii. Inefficient utilization of machine together with materials: since the reward are paid on the the world of quantity of output, an excessive wastage of materials together with frequent breakdown of machine may last causes past times the workers due to their efforts to obtain maximum output.
iii. No grantee of minimum wages: since at that spot is direct human relationship betwixt quantity of output together with wages, the workers endure of they autumn to operate efficiently. There is no guarantee of minimum daily reward to workers.
2. Write whatsoever iii merits together with demerits of fourth dimension wage system.
A fourth dimension reward scheme has the next advantages:
A. Simplicity: it is really like shooting fish in a barrel to empathise together with elementary to calculate the earnings' of worker nether this method.
B. Guarantee of minimum workers: it guarantees a minimum reward to the workers.
C. Quality production: since the amount of reward is non linked amongst the lineament of output, this method ensures production of amend lineament due to the careful attending of the workers. This fourth dimension wage scheme has the next disadvantages:
i. No incentive to the efficient workers: this scheme lacks incentive to efficient workers since all workers are paid as together with no dictions are made betwixt efficient together with inefficient workers.
ii. Go-slow policy: The worker, inwards monastic say to earn higher reward for overtime work, may test to perform the operate like shooting fish in a barrel which leads to increment inwards labour toll per unit.
iii. Dissatisfaction amid the efficient works: the efficient workers are paid reward at the charge per unit of measurement equal to these payable to insufficient workers. Which creates dissatisfaction amid the efficient workers?
3. Mention the essential features of goods reward systems
The features of a skilful scheme of reward payment are mentioned below:
a. Suitable for both employer together with employees
b. Simple to empathise together with like shooting fish in a barrel to apply
c. Economical system
d. Guarantee minimum wages
e. Assure the equal reward for elementary job.
f. Encourage the competent workers.
g. Accepted the competent workers.
h. In accordance amongst the depression of country.
i. Flexible.
4. What is meant past times preventive together with replacement toll of labour turnover? How are they treated?
Preventive costs announce the costs, which are incurred to foreclose excessive labour turnover past times keeping a satisfied labour force. These are the costs which are incurred inwards monastic say to choke on the worker satisfied together with thus to deed as a discouragement against leaving employment.
Replacement costs refer to the costs of the recruitment, preparation together with absorption of novel workers.
Preventive costs should last charged as a industrial plant overhead item together with apportioned to dissimilar departments on the the world of lay out of workers engaged inwards each department. Replacement toll should also last treated on the same the world if they arise on draw of piece of work organisation human relationship of curt sighted policy of the management. However, if they arise on draw of piece of work organisation human relationship of the error of it item department, they should last alter direct to that department.
5. Give whatsoever 4 examples of preventive toll together with replacement cost.
Preventive costs:
• Cost of personnel administration.
• Cost of medical services.
• Cost of welfare activities.
• Cost of gratuity together with pension schemes.
Replacement costs:
• Cost of recruitment cease preparation of novel workers.
• Loss of output due to interruption together with inefficiency of novel workers.
• Cost of wastage, fighting together with defective work.
• Compensation due to frequent accidents.
6. What produce you lot hateful past times idle time? How it is treated?
When the workers produce non perform the operate but notwithstanding they are to last paid the wages, such fourth dimension is called the idle time. Idle fourth dimension is the deviation betwixt the times for which they are truly paid the fourth dimension they truly work. For example, it is workers is hours only, the deviation of 1 lx minutes is termed as idle time. Idle fourth dimension arises due to the shortage of material, breakdown of machinery, strikes etc. the ways of treating the idle fourth dimension are mentioned below:
First method (Assume as Direct Labour)
Influenza A virus subtype H5N1 separate tape is non maintained rather the charge per unit of measurement of reward is increased. For example, a worker gets Rs 120 past times workers for 8 hours inwards a day. If he industrial plant for half-dozen hours only, the idle fourth dimension is 2 hours, at nowadays the previous charge per unit of measurement i.e. Rs 120÷ 6= Rs twenty together with the records is maintained accordingly.
Second method (Assume mill Examples)
Under this, the reward for the production fourth dimension is regarded as direct reward together with the reward paid for the idle fourth dimension is regulated as mill expenses. For example, a worker larn Rs120 per hateful solar daytime for 8 hours i.e. Rs120 ÷ 8 = Rs xv per hour. Now, half-dozen x Rs15= Rs90 is regarded as direct reward together with 2xRs xv = Rs30 is regarded as mill expenses.
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