NAME : S RESHMA

22017023227
CMA
ASSIGNMENT
B.COM C.A
ND
2 YEAR
ASSIGNMENTS _1

1.what are the advantage & Disadvantages of Management

Account

Management Accounting is concerned with the accounting to management.

Management accounting aids managers in a company make decisions.
Management accounting is the application of professional skills and knowledge in
the preparation of financial and accounting information in a way in which it will
help internal management in the formulation of policies, planning, and control of
the operations of the firm
The result of management accounting is periodic reports for the company’s
department managers and CEO. Management accounting reports usually include
details of the company’s
available cash, recent generation of sales revenues, the current state of the
organisation’s accounts payable and receivable, and more.

Advantages of Management Accounting

Increases Efficiency of the company

Businesses choose Management accounting because it improves the efficiency of
the company in performing operations. It contributes in striving for better
performance by evaluating and comparing.

Management accounting makes it simpler to achieve various results. This ultimately

motivates the employees to focus on better performance. Because of this, they
receive rewards in the form of promotions. Thus, management accounting
indirectly increases the efficiency of the organization.

Better Decision Making

Management accounting helps in effective decision making for a business. It
provides all necessary information in the form of charts, tables, and forecasts to the
management professionals. All this information helps managers in carrying out
comprehensive analysis and taking correct decisions.

Identifying Problem Areas

If some product is not performing well, or some division is experiencing unexpected
losses, etc. management accounting can help to identify the main cause.

Actually, if the management is diligent and their data and reports are regular,
they’re able to identify the problem very early on. This will certainly enable the
management to get ahead of the problem.

Cost transparency
In a business, the majority of the costs come from the Information Technology (IT).
The job of management accounting in the firm is to work with the IT department
closely. This step ensures within budget actions and offers cost transparency to the
organization.

Motivates Employees
Management accounting functions as a tool for motivating workforce. It prepares
and provides regular reports regarding operations of the business to the
management personnel. Managers are easily able to study the performance of
workers and take decisions pertaining to promoting or demoting them accordingly.

Assists in goal completion

The aim of the report presented by the management accountant is to help in
achieving a long-term goal. It becomes possible to achieve the goal because of the
comprehensive information of the management accountant, which shows the
strong and weak points of the corporation. Furthermore, this information helps to
discover the weakness and takes measures to overcome them.
Improved Communication
Two-way communication is followed in a company if management accounting
system is adopted. Improved accounting information and reports regarding
performance are delivered to top management for decision making. In another way,
assignment of work and responsibilities over employees are communicated to
lower level executives.

ASSIGNMENT_2

1.Discuss Different methods of wages & Bonus payment

labourers

Wage is the compensation paid for the services rendered by an employee to

another person or entity. Simply put, all the people employed by any organization
mostly work for a monetary reward. This monetary reward is termed as wages if it
meets certain conditions. Usually, the term wages concerns the low-level
employees or front-line workers appointed for a specific task.
Definition
Wages may be defined as,

The lump sum amount paid by an employer to his employee under a contract, as a
compensation of the work done by him for a specific period.

The point to note here is the ‘specific period’. This clause makes a great difference
to the definition of wages. Wage-based employees are usually those who work on
an hourly basis i.e. their rate is specified per hour or sometimes per day. Ultimately,
they are paid based on the number of hours or days served. As the wages are
calculated by the time spent during that task, so these workers are also called
hourly workers.

Example:

ABC (Pvt.) Ltd. is a soap manufacturing company. It has more than 200 workers
employed at the factory site. These workers assemble the soap making machines
daily, add in raw materials in the set quantity, oversee the manufacturing process
and finally pack the soaps into cartons after wrapping.
All these workers receive wages for their services. each worker works for 8 hours
daily and is employed at the rate of $7/per hour. Each worker is required to log in
their time of arrival and departure in the log book. At the day end, the hours
worked by each worker are totaled and the workers are paid accordingly. Each
worker is paid $280/week (8 hours * $7 * 40 days) , if he spends complete 8 hours
at the work site and takes no leave.
Characteristics of Wages
There exist several modes of payment to employees. An easy way to identify wages
is to check for the existence of the following characteristics of payments made to
employees.

Wages are paid to front-line workers only. E.g. laborers working at a construction
site or factory workers contributing in the manufacturing process at a factory.
Employees serving at a higher post are usually entitled to salaries and other fixed
remunerations.
Wages are time-based. Worker entitled to wage payments are employed at a fixed
rate per hour or per day. This rate is then multiplied with the hours or days worked
by each employee. The resultant amount is then paid to the wage-based workers.
Wage payments are made on a daily or weekly basis. Unlike the salary payments
that are cleared monthly, wages are paid by the day end or by the week end.
Differences between Wages and Salary
Another well-known term used for the monetary compensation paid to employees
is salary. Wages differ from salary on various grounds. Let us dive deeper into the
concept of wages in comparison to salaries.

Fixed Remuneration: Wage is the remuneration that is paid to the workers for the
hourly work done. Whereas, salary is the fixed amount of return that an employee
gets semi-monthly or monthly. The amount of salary is decided in the light of an
employment contract and doesn’t vary with the number of hours or days worked.
However, deductions based on unpaid leaves or additional bonus payments for a
good performance may be incorporated.
Skills & Qualification: Wages are associated with unskilled or semi-skilled persons,
whereas salary is associated with skilled and qualified employees.
Varying Rates: The wage rate may change from task to task, whereas salary is once
fixed in the beginning and remains unchanged.
Remuneration Parameters: Wages are paid daily for the number of hours spent on a
task, whereas salary is decided on the employee’s performance, qualification and
skill set.
Overtime: Wage holders get the extra working hours’ bonus, whereas salaried
employees receive an overtime payment if they work for more than 40 hours per
week. Salaried persons more often enjoy a bonus payment for their extra-ordinary
performances.

Example:

Looking at the following example can help us understand the computation of salary
and wages better.

Strong Constructors Inc. has recently won a contract to build a 15-storey building
for the head office of a new company. To manage the work load, 4 teams have been
formed. Within each team there are 5 laborers and a supervisor. To oversee the
performance of all the teams, a deputy manager is also allocated to the project
who reports to the senior management.
Each laborer is employed at the rate of $5 per hour and is supposed to work for 7
hours per day for 5 days a week. The supervisors, however, receive a semi-monthly
salary of $500 and a bonus payment of $200 in case of excellent performance by
their team. The deputy manager is employed at a monthly salary of $2650.
Modes of payment for Wages
Wages are mostly paid in a monetary form. however, depending upon the
employment contract, there may also be other modes of payments. The two most
common modes of wages’ payments are as follows,

Cash Wages: The most common mode of remuneration payment is cash. Majority
workers and employers prefer this mode of payment.
Non-Monetary Wages: Sometimes wages are not paid in monetary form. Instead,
these may be in the form of some goods, food, shelter or other utilities. This
payment mode is pretty common in rural areas.
Different Wage Systems
Several wage systems prevail in the world today. The following three systems are,
however, the most commonly used.
Pros & Cons of Piece Wage System
A piece wage system is a perfect option when a standard production is required,
and quality is the foremost priority. Also, it encourages the employees to work
speedier to make more units and earn more. In addition to the above mentioned,
the following are some pros and cons of the piece wage system.

Pros:

Incentives for workers: In this system, workers are encouraged to do more work as
they are being paid for what they are producing. It increases the production to the
maximum level.
Enhanced production: This piece wage system enhances the quantity of production
as the workers will be paid for what they produce.
Cost-effective: The maximum production in minimum time reduces the cost of
production. This method is very cost-effective as you don’t need to supervise the
workers for their tasks. They work speedily to produce more maintaining the
standard quality.
Proper efficiency measurements: In this system, the employer can better gauge the
efficiency of each worker based on the quality and speed of his production.
Cons:

Lack of unity: In the piece wage system, every worker attempts to produce more
and more units. In this production race, he may feel that every co-worker is his
competitor, which leads to a lack of unity among workers. However, it is good for
the employer to have a unified atmosphere for all.
Bad for artistic work: This system is not good for artistic work. Workers can not
focus on quality as they are running for the number of units. Setting a quality
standard is necessary to fetch quality results in this system.
3. Incentive Wage System
An incentive wage system is also known as a progressive wage system or a bonus
scheme. This system encourages all three aspects of production i.e. quality,
quantity, and speed. This system focuses on providing solutions for the demerits of
the other two systems.

Formula:

Under this system, the workers are paid based on the number of units produced by
them. However, these units must be of the standard quality set. A worker shall not
be paid for any defective or inferior-quality unit produced. Here is how it is
calculated:

3-Apr-24-2022-02-07-58-59-AM

Example:
A factory has 10 workers with an incentive wage system implemented. For each
quality unit produced, $2 is paid to each worker. However, for any defective units
produced, nothing is paid to the workers. A worker produced 10 units; upon
inspection 3 out of those 10 units were below the set standard while the others
were of the standard quality. How much did the worker earn?

7 standard units produced * $2 per unit = $14

3 defective units produced * $0 per unit = $0

Total Wages = $14

ASSIGNMENT_3

Different between job costing & batch costing

Job costing:
A job is any assignment, contract, or piece of work that must be completed in
accordance with the requirements and expectations of the client. You can use this
costing method to figure out how much any of these things will set you back.
Operating a business is expensive because expenses pile up over time. Job costing
refers to the procedure through which a company calculates the amount of money
needed to produce a product or deliver a service. The smooth running of the
business depends on this procedure.
Batch costing:
To calculate the cost per unit of production, it is necessary to keep track of all costs,
categorize those costs, and assign both indirect and direct costs to individual
products. A product's or process's cost per unit can be calculated in this way. It is
possible to calculate the price of a service or an item by using either job costing or
batch costing.

What is Job Costing?

A job is any assignment, contract, or piece of work that must be completed in
accordance with the requirements and expectations of the client. You can use this
costing method to figure out how much any of these things will set you back.

It necessitates taking into account the following −

Direct materials − It does this by ascribing such costs to the project or product for
which they were incurred.

Direct labor − On the basis of labor expenses, certain amounts of time spent on
jobs are allotted to those jobs.

Overheads − The costs of overhead are tallied up and distributed among the various
occupations.

The following are some of the many advantages of using job costing −

Expenses for completed jobs are itemized and analyzed to see whether they may be
reduced for future initiatives.

Collecting the additional costs and billing the client for them.
It would be particularly useful in industries like shipbuilding, painting, interior
design, furniture, and press printing. Also, it works well for industries that tailor
their products to meet specific customer needs.

What is Batch Costing?

It's a way to figure out how much something should cost by making a bunch of
identical ones at once and then labeling each batch with a number, the total
number of items made in that batch, and the unit price. The batch pricing approach
is used in this system.

The price of a single item may be determined by dividing the entire cost of the
batch by the total number of items in the batch. You may use this to find out how
much anything costs. After then, the batch's price is marked up by the company's
profit margin.

Businesses that make their products in batches, including those in the textile,
engineering, and fast-moving consumer goods industries, might benefit greatly
from the batch costing approach.

Differences − Job Costing and Batch Costing

Operating a business is expensive because expenses pile up over time. Job costing
refers to the procedure through which a company calculates the amount of money
needed to produce a product or deliver a service. The smooth running of the
business depends on this procedure.

To calculate the cost per unit of production, it is necessary to keep track of all costs,
categorize those costs, and assign both indirect and direct costs to individual
products. A product's or process's cost per unit can be calculated in this way. It is
possible to calculate the price of a service or an item by using either job costing or
batch costing.

It necessitates taking into account the following −

Direct materials − It does this by ascribing such costs to the project or product for
which they were incurred.

Direct labor − On the basis of labor expenses, certain amounts of time spent on
jobs are allotted to those jobs.

Overheads − The costs of overhead are tallied up and distributed among the
various occupations.

The following are some of the many advantages of using job costing −

Expenses for completed jobs are itemized and analyzed to see whether they may be
reduced for future initiatives.

Collecting the additional costs and billing the client for them.

It would be particularly useful in industries like shipbuilding, painting, interior

design, furniture, and press printing. Also, it works well for industries that tailor
their products to meet specific customer needs.

It's a way to figure out how much something should cost by making a bunch of
identical ones at once and then labeling each batch with a number, the total
number of items made in that batch, and the unit price. The batch pricing approach
is used in this system.

The price of a single item may be determined by dividing the entire cost of the
batch by the total number of items in the batch. You may use this to find out how
much anything costs. After then, the batch's price is marked up by the company's
profit margin.
Businesses that make their products in batches, including those in the textile,
engineering, and fast-moving consumer goods industries, might benefit greatly
from the batch costing approach.

Differences − Job Costing and Batch Costing

The following table highlights how Job Costing is different from Batch Costing −

Characteristics of Job Costing & Batch Costing

Definition

Job costing is a method of costing used to determine how much it will cost to
complete a particular job such as a contract, a specific work, or an assignment that
must be carried out in line with the specified requirements and preferences of the
customer. The term "job costing" describes a technique for doing so.

Batch costing is a method of determining costs based on batches of identically

produced items. In this system, the quantity produced in each batch is tracked
together with its unit cost.
Ideal Industries

The most productive industries for job costing are those that generate items in
response to particular requests and needs from customers such as shipbuilding,
decorating, interior design, furniture production, and press printing.

Industries that manufacture products in batches, such as the textile, engineering,

and fast-moving consumer goods sectors, benefit the most from using batch
costing. However, batch costing may also be used in sectors where products are
made one at a time.
Terms of production

Using job costing, you can keep track of how much it costs to produce goods that
are tailored to individual orders.

Accounting for mass-produced goods may be done using a process called "batch
costing."

Cost unit

The completed task is the basic unit of cost analysis in any work context.

A batch is used as the cost unit in batch costing.

Cost derivation

In job costing, the price per unit is determined once all work is completed.

By dividing the total cost of the batch by the total number of products in the batch,
the cost of each individual product can be calculated using batch costing. The result
is the unit price.

ASSIGNMENT_4
Explain the Financial statement needs & objectives

Meaning of Financial Statements

Financial statements are basically reports that depict financial and accounting
information relating to businesses. A company’s management uses it to
communicate with external stakeholders. These include shareholders, tax
authorities, regulatory bodies, investors, creditors, etc.

These statements basically include the following reports:

Balance sheet
Profit and Loss statement
Statement of cash flow
Income sheet
Objectives of Financial Statements

Nature of Financial Statements

Financial statements are prepared using facts relating to events, which are recorded
chronologically. Thus, we have to first record all these facts in monetary terms.
Then, we have to process them using all applicable rules and procedures. Finally, we
can now use all this data to generate financial statements.

Based on this understanding, the nature of financial statements depends on the

following points:

Recorded facts: We need to first record facts in monetary form to create the
statements. For this, we need to account for figures of accounts like fixed assets,
cash, trade receivables, etc.
Accounting conventions: Accounting Standards prescribe certain conventions
applicable in the process of accounting. We have to apply these conventions while
preparing these statements. For example, the valuation of inventory at cost price or
market price, depending on whichever is lower.
Postulates: Apart from conventions, even postulates play a big role in the
preparation of these statements. Postulates are basically presumptions that we
must make in accounting. For example, the going concern postulate presumes a
business will exist for a long time. Hence, we have to treat assets on a historical cost
basis.
Personal judgments: Even personal opinions and judgments play a big role in the
preparation of these statements. Thus, we have to rely on our own estimates while
calculating things like depreciation.

Objectives of Financial Statements

Stakeholders of a company heavily rely on financial statements to understand its
functioning. They portray the true state of affairs of the company. Here are some
objectives of financial statements:

These statements show an accurate state of a company’s economic assets and

liabilities. External stakeholders like investors and authorities generally do not
possess this information otherwise.
They help in predicting the extent of a company’s capacity to earn profits.
Shareholders and investors can use this data to make their financial decisions.
These statements depict the effectiveness of a company’s management. How well a
company is performing depends on its profitability, which these statements show.
They even help readers of these statements know the accounting policies used in
them. This helps in understanding statements more comprehensively.
These statements also provide information relating to the company’s cash flows.
Investors and creditors can use this data to predict the company’s liquidity and cash
requirements.
Finally, they explain the social impact of businesses. This is because it shows how
the company’s external factors affect its functioning.
ASSIGNMENT_5

defined Marginal costing Explain the advantage of the marginal

costing

The marginal cost refers to the increase in production costs generated by the
production of additional product units. It is also known as the marginal cost of
production. Calculating the marginal cost allows companies to see how volume
output influences cost and hence, ultimately, profits.
Benefits of Marginal Cost
When a company knows both its marginal cost and marginal revenue for various
product lines, it can concentrate resources towards items where the difference is
the greatest. Instead of investing in minimally successful goods, it can focus on
making individual units that maximum returns.