683 Views

Estimated reading time : 30 Minutes

Accounting for Labour

Arjun EP

Published on: June 26, 2020

What is accounting for labour?

Accounting theory of accounting for labour for the board exam.

State two functions of engineering department.

ENGINEERING DEPARTMENT

The engineering department maintains working condition.

It also maintains production methods for each job or department.

The functions of this department are:

To determine and provide for good working conditions,
To determine production method for each job,
To prepare design for each job,
To apply time and motion study,
To determine the rate of pay,
To apply research and development work,

Write in five sentences about the need of time and motion study while fixing-up wage rate.

Write in simple five sentences illustrate the meaning of time and motion study.

Write the meaning of time and motion study.

TIME AND MOTION STUDY

This study is based on scientific management.

Under scientific management, standard task of every worker is determined with careful study.

Here, standard means quantity produced by an average worker under standardized condition.

Time and motion study department carefully determines a standard task for every worker.

Motion study aims to eliminate the unnecessary work.

It helps to ascertain the easiest and best method for performing a job.

The object of motion study is to improve working capacity and reducing fatigue.

This study is the art of observing and recording the time to do each job.

It helps to fix a standard time for a job.

###########

Click on link for YouTube videos

SHARE (ACCOUNTING FOR SHARE) http://tiny.cc/889jkz

SHARE IN Nepali http://tiny.cc/k99jkz

DEBENTURES http://tiny.cc/yeakkz

FINAL ACCOUNT: CLASS 12 http://tiny.cc/e89jkz

FINAL ACCOUNT IN NEPALI http://tiny.cc/w89jkz

WORK SHEET http://tiny.cc/579jkz

RATIO ANALYSIS (ACCOUNTING RATIO) http://tiny.cc/4fakkz

FUND FLOW STATEMENT http://tiny.cc/wiakkz

CASH FLOW STATEMENT http://tiny.cc/8gakkz

THEORY ACCOUNTING XII http://tiny.cc/nfakkz

THEORY: COST ACCOUNTING http://tiny.cc/tfakkz

COST ACCOUNTING http://tiny.cc/p29jkz

LIFO−FIFO http://tiny.cc/dgakkz

COST SHEET, UNIT COSTING http://tiny.cc/w49jkz

COST RECONCILIATION STATEMENT http://tiny.cc/829jkz

###########

Write in short what do you know about payroll accounting?

PAYROLL ACCOUNTING

The payroll department is concerned with calculation and disbursement of wages to employees.

The main function of payroll department is to prepare wage sheet.

The wage sheet contains detailed information of the gross and net income of each worker.

It has following functions:

To record the job classification, department and wage rate for each employee.

To verify and to summarize the time of each worker as shown on the daily time cards.

To compute the wages of each employee and prepare the payroll.

To compute the payroll deductions.

To maintain a permanent payroll record of each employees.

To disburse wage or salary payments etc.

What are the different kinds of frauds in wage payment?

FRAUDS IN WAGE PAYMENT

There are more chances of fraud and manipulation in wage payment than any other transaction.

For avoiding frauds and manipulation, proper and systematic procedure should be adopted.

The following types of frauds are commonly seen:

Inclusion of dummy or ghost workers in the payroll.
Manipulating the hours worked in job cards.
Recording bogus over time.
Using wrong rate of pay in the payroll etc.

What are the steps to be taken to minimize the frauds in wage payment?

MINIMIZE FRAUDS IN WAGE PAYMENT

The following steps should be taken to avoid or minimize frauds
(a) The wages of workers should be paid in the presence of supervisor or departments head so that the worker can be identified.
(b) Each worker should be provided an identity card with photograph and necessary information to identify the worker.
(c) To avoid bogus entries in the payroll, it should be verified with time keeping and book-keeping.
(d) The payroll should be certified by the person who prepared it and get it signed from manager.
(e) To avoid the fraud, the cashier should not be associated with payroll section.
(f) Pay pocket must be prepared for each worker with his name and card number but amount is not written.

What is time rate system of wage payment?

What do you understand by time rate?

State the disadvantages of time rate system of wage payment.

Mention any four advantages of time rate system.

Give two disadvantages of time wage system.

Write any two disadvantages of time wage system.

TIME RATE SYSTEM, ADVANTAGE, DISADVANTAGE

This method is also called time rate system.

Under this system, wages are paid to workers on time basis.

It is not related to output.

It may be paid on hourly, daily, weekly or monthly basis.

This system is applied where:

· Quality of work is more important than the volume

· Measure of work is indirect labour basis.

· Work demands high degree of skill.

· Production involves delay and interruption due to another factor.

Advantage of time wage system

The main advantages of time rate system are:

· This process is simple and easy to understand.

· It is more useful where quality products are manufactured.

· It is useful to fresher or unskilled workers because minimum wages is allowed.

· This method is favoured by trade union because workers are paid equal wage.

Disadvantage of time rate system

The main disadvantages of time rate system are:

a. Production is low because there is no relation between input and output.

b. No differences between skilled and unskilled workers that frustrated skilled workers because wage is same.

c. Labour cost per unit is difficult to set in advance.

d. Workers are paid wages for idle time; it is not good for company.

Define piece rate system of wage payment and list out any two disadvantages of it.

What are the advantages of piece rate system?

Write any four merits of piece rate system of wage payment.

PIECE RATE SYSTEM, ADVANTAGE, DISADVANTAGE

Piece method is also called piece wage system.

Under this system, wages are fixed at a specific rate per unit.

Workers receive wages on the basis of their ability, energy and speed of work.

Wage rate are per meter, piece, kg, quintal, ton, square feet/meter, cubic feet/ meter etc.

Advantage (merits) of piece wage system

The main advantages of piece rate system are:

· It is improvement of time wage system.

· Unskilled, semi-skilled and skilled labour can earn according to their capacity.

· Increase in production reduces fixed cost per unit.

· Wages for idle time is not paid in this system.

Disadvantage (demerits) of piece wage system

The main disadvantages of piece rate system are:

· It is difficult to fix suitable piece work rate.

· Unskilled workers will be frustrated due to fewer wages.

· It is not suitable for quality product because ‘haste makes waste.’

· Increase production will not decrease cost.

Mention three differences between time rate and piece rate.

Distinction between time rate and piece rate system of wage payment.

Write about any three differences between time wages and piece wages system of wage payment.

Difference between Time Rate & Piece Rate System

Bases	Time rate system	Piece rate system
Base	Wages is based on the time worked.	Wages is based on unit produced.
Efficiency	Wages are not linked with the efficiency of the workers.	Wages are directly linked with the efficiency of the workers.
Supervision	Supervision for quality work is not needed.	Supervision is required for quality work.
Wastage	There is less chance of wastage of material.	There is a high chance of wastage of materials.