A2zNotes.com -Best Bcom BBA Bed Study Material

BBA Costing Accounting Topic Wise Short Notes of Direct Labour Accounting And Control

BBA Costing Accounting Topic Wise Short Notes of Direct Labour Accounting And Control : BBA Cost Accounting 1st Semester Notes Study Material in English PDF Download.

BBA Costing Accounting Topic Wise Short Notes of Direct Labour Accounting And Control : Page 1

BBA Costing Accounting Topic Wise Short Notes : Page 2

BBA Costing Accounting Topic Wise Short Notes Study Material : Page 3

BBA Costing Accounting Topic Wise Short Notes of Direct Labour Accounting And Control
BBA Costing Accounting Topic Wise Short Notes of Direct Labour Accounting And Control

Learning objectives

  • Payroll Accounting And Labour Cost Accounting
  • Labour Cost Records
  • Time Keeping And Time Booking
  • Measurement Of Labour Turnover
  • Causes Of Labor Turnover
  • Steps To Reduce Labour Turnover
  • Cost Of Labour Turnover
  • Treatment Of Cost Of Labour Turnover
  • Idle Time – Causes And Accounting
  • Overtime Premium
  • Measures To Control Overtime
  • Meaning Of Casual And Out Worker
  • Incentive To Indirect Workers

Bba Costing Accounting Topic Wise Short Notes of Direct Labour Accounting And Control

Bba Cost Accounting Topic is ‘Labour Record’ Shorts Notes

Labour Records

The important labour records are explained below:

Clock card –

At the time of coming in or leaving the factory premises, the employee will use a card called ‘clock card’ at the factory gate for recording the starting and finishing time. A clack card is a document on which starting and finishing time of an employee is recorded e.g., by insertion into a time recording device, for ascertaining total actual attendance time.

Daily or Weekly Time Sheet –

A daily or weekly time sheet is a document on which the employee records how his time has time has been spent. The total time on the time sheet should correspond with the time shown on the clock card or attendance record. The daily or weekly time sheet will analyse his movement and when signed by the foreman, an analysis of the labour cost is made for various jobs and operations. The time sheet should be designed to show the other information like over – time ,idle time, travelling time etc.

Job Cards –

Unlike time sheets which relate to individual employees and may contain bookings relating to numerous jobs. A job card relates to a single job or batch and is likely to contain entries relating to numerous employees. On completion of the job it will contain a full record of the times and quantities involved in the job or batch. The use of job cards, particularly for jobs which stretch over several weeks, makes reconciliation of work time and attendance time a difficult task. These cards are difficult to incorporate directly into the wage calculation procedures.

Piece Work Cards –

Some companies pay their workers on the basis of production but on the time spent in the factory. The payment is based on number of pieces processed or manufactured. For the workers under piece work system the time sheet is inappropriate and it should be replaced with the piece work card showing the number of units processed or produced each day, on the basis of which wages are, payable.

The time sheets and / or piece work cards should be reconciled with the payroll which contains details of wages paid to workers.

Bba Costing Accounting Topic Wise Short Notes of Direct Labour Accounting And Control

Bba Cost Accounting Topic is ‘Payroll Accounting and Labour Cost Accounting’ Shorts Notes

Payroll Accounting and Labour Cost Accounting

Payroll Accounting –  

It is concerned with the maintenance of records for the amounts due to the employees like salaries, wages , allowances, contributions to provident fund and E.S.I. etc and the deduction to be made from the employees earnings. Payroll accounting requires the information relating to employee’s attendance, leaves, rates of pay, amounts to be deducted etc.

Labour Cost Accounting –  

It is concerned with identifying the amount of labour cost to be charged to individual jobs and overhead accounts. For this purpose, information relating to the time spent on each job or process or number of units produced is obtained from the job cards, piece work tickets etc. the idle time analysis is also necessary for labour cost accounting. The main objective of it is to record the times spent by all workers on each activity on a separate job card or time sheet and then apply the appropriate hourly rate. The labour costs are then charged to each of these activities. The job cards, time sheets, idle time cards are the important documents for analyzing production labour costs to various jobs and overhead account.

Bba Costing Accounting Topic Wise Short Notes of Direct Labour Accounting And Control

Bba Cost Accounting Topic is ‘Time Keeping and Time Booking’ Shorts Notes

Time Keeping and Time Booking

Time Keeping –

It is the marking of the attendance of a worker when he comes to and leaves the factory. It is recording of time of arrival and departure at the factory gate. No. of methods are used in time keeping and with the advancement of technology; the computers are also being used for time recording and analysis. The person who look after time keeping is called ‘time keeper’ and his place of work is called ‘time office’. The time records are the basic data used for calculation of salaries and wages, overtime premiums etc.

Time Booking –

It is the recording of times spent within the working day upon different jobs. It is the keeping record of particulars of working done, or time spent on each job, process operation etc. the time booking is the marking of in and out time on each job attended by the worker. The workers will mark the time in the designated document and it is countersigned by the supervisor.  It is used to ascertain the labour time spent on each job, analysis of idle time, labour cost of various jobs and products. The time booked is used to evaluate the performance of labour by comparing actual time booked with standard or budgeted time.

Bba Costing Accounting Topic Wise Short Notes of Direct Labour Accounting And Control

Bba Cost Accounting Topic is ‘Labour Turnover’ Shorts Notes

Labour Turnover

Labour turnover is the movement of people into and out of the organisation. It is usually convenient to measure it by recording movements out of the firm on the assumption that a leave is eventually replaced by a new employee. The term separation is used to denote an employee who leaves for any reason; labour turnover is the rate of change in the number of employees of a concern during a definite period. Labour turnover studies are helpful in manpower planning. Just as the high reading on a clinical thermometer is a sign to the physician that something is seriously wrong with the human organism, so is a high index of labour turnover rate a warning to management that something is wrong with the health of the organisation. A high turnover rate may mean poor personnel policies, poor supervisory practices or poor company policies. Too lower a rate of turnover can also be danger signal.

Measurement of Labour Turnover

The following formulae are in common use for measuring labour turn over:

Causes of Labour Turnover

High labour turnover may be traced to the following causes which may be broadly classified under avoidable and unavoidable causes:

Avoidable Causes

  • Dissatisfaction with wages and rewards Low pay and allowances and no opportunity to move to a higher paying job.
  • Dissatisfaction with working conditions Noise , heat, humidity, unsanitary conditions of employment, dangerous process, poor lighting, night shift working , insufficient tooling etc. cause some workers to leave the organisation.
  • Dissatisfaction with personnel policies – Autocratic method of labour administration refused. Company may be too shortsighted to provide for an annual vacation.
  • Lack of transport facilities, Accommodation, medical and other facilities and lack of amenities like recreational centers, schools etc.
  • Bad relation with co – Workers, superiors and unsatisfactory personnel management, union disputes.
  • Dissatisfaction with the job – The workers may find the job too hard. Sometimes jobs include to much of constant lifting heavy, materials or the manipulation of heavy machinery. The routines in the job may be very fatiguing involving undue strain upon the nerves, eyes and attention.

The above causes should attract the attention of the management most. After examining the exact cause or causes of the increasing turnover, the cost of reducing the labour turnover rate should be compared with anticipatory benefits in order to determine the final remedial measures to be adopted.

Unavoidable Causes

  • Personal betterment
  • Family circumstances
  • Community conditions
  • Health conditions
  • Marriage (in case of women)
  • Retirement and death
  • Migratory nature of workers
  • Dismissal or discharge due to incompetence, inefficiency, insubordination, indifferent attitude towards work.
  • Redundancy due to seasonal changes, shortage of materials and other resources, slack of business, lack of planning and foresight of higher management.

Management can do little control over labour turnover in the above cases.

Leave a Reply