The New International Economic Order Essay -- United Nations Economics

The New International Economic Order In the early 1960s the economic gap separating the first world from the third or other world began to explode. With the industrialized states controlling more than 3/4ths of the global economy the disadvantage facing the third world could easily be seen. triplet world countries lacked the start-up capital, the education, and the technology to compete with the first world. In the early 1970s the United Nations began to listen to the cries from these third world states, and set out to develop a outline at which to combat these problems. This strategy lead to the development of The New International Economic Order (NIEO) or the Group of 77 in 1974. The group consisted of 77 members which would rectify what they see as the structural, global, economic inequality that operates to the Other Worlds distinct disadvantage (Weatherby 90). The NIEO convened at the United Nations and proposed 6 major issues which they felt needed to be agreed upon in order for the third world states to close this economic gap which they faced. The first of these issues was the idea that each state would be free to influence their own economic and political structure. This has not been the case though with Neocolonialism. On the surface it looks as though these third world countries have control all over their economic and political structures because the control exercised over these states is indirect. This influence is exercised through the interaction of the governing nations banking, business, cultural, and military leaders with the Other Worlds elites (Weatherby 35). Because of the third worlds dependence on dominant powers for economic survival they must in essence follow the desires of the more powerful... ...United Nations where each country would deposit 1% of its gross domestic product (GDP). This assistance would then be distributed to countries on the basis of needs and not beliefs. As it stands right now the United States only gives 0.017% of its gross domestic to foreign abet programs. In conclusion the NIEO was a strong attempt at closing the gap between the mysterious and the poor countries. But in the end the rich and more powerful countries still control everything. The developed countries continue to develop faster everyday. Making it harder and harder for the third world nations to catch up to our pace. It will be the developing nations final decision whether or not we will ever allow the third world to share in the same kind of life-style we have developed for ourselves today. Works CitedWeatherby, Joseph N., et al., eds. The Other World. New York Longman, 1997.

Cubas Relations with Latin America Essay -- Cuban Revolution Foreign

Cubas transaction with Latin America IntroductionThe Cuban conversion of 1959 not only affected Cuba itself, it also had a strong impact on the islands international relations. This was particularly the case with its relationships with Latin America. In the cardinal years since the revolution, the response to Cuba from Latin American nations has ranged from the severing of diplomatic ties with the island, to the reestablishment of relations at a later period. Fear of the spreading of similar insurrections, as hygienic as feelings of Latin American solidarity, are examples of factors that have contributed to these shifts.Revolutionary Leaders Define Cubas Place in the AmericasEven before the success of the revolution, Castro and his supporters had outlined their expectations for Cubas position in the Americas. Revolutionary leaders wanted to maintain strong ties with Cubas Latin American neighbors, with whom the nation shared cultural and historical similarities. In addition, a s Castro proclaimed in his 1953 defense speech, Cuba was to be the land in which those politically persecuted by bloody tyrants oppressing our sister nations would find generous asylum, join and bread in the land of Mart (Castro 3). This desire to aid those whom it considered to be victims of oppressive regimes was used by Castros administration to justify its involvement in uprisings throughout Latin America. Castros 26th of July Movement also called for Cubas position in the Americas to be one of a sovereign nation confederative with its neighbors who shared its democratic ideology. In its Program Manifesto, the movement stated that the common ideals and interests which necessarily unite the republics of the hemisphere are a reality ... ...City, NJ. 1972. 113-140.Falcoff, Mark. Why The Latins unagitated Love Fidel. The American Enterprise November-December 1990 v1 n6 42-49.Falk, Pamela S. Cuban Foreign Policy Caribbean Tempest. Lexington, MA D.C. Heath and Company, 1986.Kline, Michael. Castro and the in the altogether Thinking in Latin America. Journal of Interamerican Studies and globe Affairs Spring 1990 321 83-118.Nazario, Olga. Brazils Rapprochement With Cuba The Process and the Prospects. Journal of Interamerican Studies and World Affairs 1986 28(3) 67-86.Prez-Stable, Marifeli. The Cuban Revolution Origins, Course, and Legacy. New York Oxford University Press, 1999.Wright, Thomas C. Latin America in the Era of the Cuban Revolution. New York Praeger Publishers, 1991.World Marxist Review. Latin America New Chapter in International Relations. Canada. 1972 15(1) 90-100.

Diversity Of Hawthornes Writings In young Goodman Brown, ethan Bra :: Free Essay Writer

Diversity of Hawthornes Writings in "Young Goodman Brown", "Ethan Brand", and"The Birthmark" .Michael Duncan ENG. 111 T/TH 930 am"... it is no delusion. There is an Unpardonable Sin" , a quoteby Ethan Brand that is at the root of many stories by Nathaniel Hawthorne.Nathaniel Hawthornes gloomy, dark style of theme is an emphasis on his themeof evil at societies heart. Writing about what he knew Hawthorne described thepuritan society in different periods of time and specify different charactersbut all told connected through his style. The stories that exemplify the diversityof Hawthornes writing are "Young Goodman Brown" , " Ethan Brand" , and "TheBirthmark" .Having read these stories it is achievable to become engrossed inthe darkness that is portrayed and none is better than "Young Goodman Brown" .Young Goodman Brown, the character, is first introduced to us in the clearing ofcapital of Oregon hamlet and we learn t hat he has faith in the goodness of the village andFaith for his companion as well. The people that we look in Salem village inthe first few paragraphs are just Goodman and Faith. These ii characters arevery important to understand for their surface characters or illusionalcharacters. It is soon knowing that Goodman Brown is not such a good man andlater Faith shows us just as much false character. Goodman and Faith are notthe only characters that are not all they seem to be. We come to meet morecharacters in the short story that are superficial as is the village itself.Goodman Brown leaves the bright, warm, goodness of his village to make a journeyin the timber to meet a stranger. A good place to meet a stranger would bethese surrounding woodland of Salem for it is here that described by NathanielHawthorne that "He had taken a dreary road,darkened by all the gloomiest treesof the forest, which barely stood aside to let the narrow path creep through,and closed immediately beh ind." and like the scheming mind of an evil personthe dark woods leads one down the wrong pathway.The woods are not an allusion as was the village, the woods areexactly what they seem to be therefore the characters met inside the woods willbe as shady as the woods themselves. Leading Goodman Brown to his despair isthe first character, the stranger. The stranger is much older than the Goodmanbut the two converse easily and both understand each other even though theytalk around Goodmans evil purpose. It is this easy conversation that Hawthorne

The Evolution of Childhood in Europe and America Essay -- Exploratory

The Evolution of Childhood in Europe and AmericaSomewhere around the beginning of the 17th century, the perception of the nature of childishness -- its duration, its perceived purpose, its requirements, its quality -- changed rather significantly in the Eurocentric world, a period Valerie Suransky identifies as a watershed for the ultramodern notion of childishness (1982, p. 6). Actually, two things seemed to have happened first, the idea of childhood as a separate developingal stage began to arise second, the idea of who was deserving of childhood also began to broaden. The pattern was similar in Europe and America, with some minor variations which resulted from geography, religion, etc., but the differences are inconsequential. Generally speaking, the factors which influenced this change are the view of the nature of humankind, the development of industry, urbanization, parents themselves, and the womens movement. According to Sharar (1990), childhood in Europe during th e Middle Ages was a concept pretty much limited to members of the upper-class. Children of the lower-classes generally had a rather extended early childhood period -- to about age seven -- but were then, essentially, tossed into the adult world. With the advent of Calvinism, and protestantism in general, in the late 1500s, the focus shifted, perhaps because of the rise of a halfway class, perhaps because of the new religions focus on the individual. In the Protestant view, in which humans were viewed as innately evil, soiled by original sin, children were also considered clean-living agents, and therefore in need of shaping. Given this idea, it was reasonable to stifle childrens natural impulses by physically punishing those impulses, to set them in... ...973). Tools for conviviality. NY Harper and Row.Platt, Anthony. (1982). The rise of the child-saving movement. In Chris Jenks (Ed.) The sociology of childhood Essential readings (pp. 151-169). London Batsfords Academic and Educational Ltd.Rose, Lionel. (1991). The Erosion of childhood. NY Routledge.Sharar, Shulamith. (1990). Childhood in the middle ages. London Routledge.Strickland, Charles. (1984). The Rise and fall of modern American childhood Reflections on the history of childhood in the twentieth century. Atlanta, GA Emory University, Department of History. (ERIC Document Reproduction Service No. ED248977)Suransky, Valerie. (1982). The erosion of childhood. Chicago University of Chicago Press.Welter, Barbara. (1966). The cult of sure womanhood 1820-1860. The American Quarterly, 18. 151-174.

Comparing the Creation Scene in James Whales 1931 Frankenstein and Ken

Comparing the Creation Scene in jam Whales 1931 Frankenstein and Kenneth Brannaghs 1994 Frankenstein James Whales 1931 portrayal of Frankenstein when compared to Kenneth Brannaghs alternate account from 1994 reveals some similarities but also many differences in the way they try to evoke emotions much(prenominal) as horror, fear and expectation from the listening and preclude the plot moving. To do this, the directors have designd a series of techniques, including camera shots, use of sound and music, use of lighting and shadows, and mise-en-scene. Many of the differences and similarities between the films are due to the type of audience that the directors were aiming the films at. For example, Whale uses a very traditional horror opening for his creation scene, bandage Brannagh uses a more contemporary opening with light play and symbolism through candles and shadows. Some of the other main differences between the two styles of films are how tight th e film follows the original book, the style through which genres such as horror, romance and action are portrayed, and the strength of the horror and special effects used to keep the audience in a state of expectancy and tension, but also scared and unsure of the outcome. James Whale was toilsome to create a horrible and contemporary film, which would scare his 1931 audience and be extremist in the techniques he used while still retaining a traditional gothic horror genre, whereas Kenneth Brannagh was trying to create an action film, which follows the original book more closely, and portrays the monster in a way that evokes sympathy for the monster, rather than hatred and violence towards a predetermine... ... the audience never really knew how it was going to turn out and what was coming next. However, social preferences and tolerances have changed dramatically over time and so that is why I put one acrosst sustain the 1931 version as effective at portraying the story or creating tension. Moreover, I find that the 1931 film was certainly more revolutionary than 1994 and tried to go past original limits in regard to style and techniques used more effectively and more continuously than the later film. Finally, I find that although the 1931 film was more revolutionary and may have been more effective if compared with audiences from the respective times, I still prefer the later version it uses more innovational effects and follows the original book more closely which allows people who have read the book to relate more closely to the film.

El Chapo Biography Essay

El Chapo was born in the small Sinaloa town of La Tuna and is the oldest of seven children. Guzmn grew up surrounded by marijuana and poppy crops sows that were cultivated by his father, Emilio Guzmn Bu in timeo. The elder Guzmn was a violent man who beat his children. El Chapo potential earned the ire of his father by trying to stop him from hitting his siblings. Whereas his father was a source of punishment, his mother Consuelo Loera served as his fountain of emotional support. She still lives in La Tuna and is said to be the only person in the world who can change her sons mind on anything. Guzmn entered the narcotics industry at the days of 15 when, along with his cousins, he planted his own marijuana.It was during his adolescence that he was given the nickname of El Chapo, a informant to his miniscule stature he was a farmer growing beans and cornwhen he escaped prison in 2001 he is to said to walked place in a wig a skirt and high heels As a child, Guzmn sold oranges, and dropped out of school in six grade to get with his fatherearly lifeJoaqun Archivaldo Guzmn Loera was born into a poor family in the rural community of La Tuna, Badiraguato, Sinaloa, Mexico.2122Sources disagree on the time of his birth, with some stating he was born on 25 December 1954,23 while others report he was born on 4 April 1957.24 His parents were Emilio Guzmn Bustillos and Mara Consuelo Loera Prez.25 His paternal grandparents were Juan Guzmn and Otilia Bustillos, and his maternal grandparents were Ovidio Loera Cobret and Pomposa Prez Uriarte. For many generations, his family lived and died at La Tuna.26 His father was officially a cattle rancher, as were almost in the domain of a function where Guzmn grew up according to some sources, however, he may have possibly also been a gomero, a Sinaloan word for opium poppy farmer.27 Guzmn has ii younger sisters, Armida and Bernarda, and four younger brothers Miguel ngel, Aureliano, Arturo and Emilio.He had three unnamed older b rothers who reportedly died of natural causes when he was very young.26 Few details are know of Guzmns upbringing. As a child, Guzmn sold oranges, and dropped out of school in third grade to work with his father.17 Guzmn wasregularly defeat and sometimes fled to his maternal grandmothers house to escape such treatment. However, when he was home, Guzmn stood up to his father to protect his younger siblings from being beaten.2829 It is viable that Guzmn incurred his fathers wrath for trying to stop him from beating them. His mother, however, was the openation of his emotional support.30 As the nearest school to his home was near 60 mi (95.6 km) away, Guzmn was taught by traveling teachers during his early old age, just like the rest of his brothers. The teachers stayed for a fewer months before moving to other areas.29 With few opportunities for employment in his hometown, he turned to the cultivation of opium poppy, a common practice among local residents.31 During harvest seas on, Guzmn and his brothers hiked the hills of Badiraguato to cut the bud of the poppy. Once the plant was stacked in kilos, his father sold the harvest to other suppliers in Culiacn and Guamchil.32He sold marijuana at commercial centers near the area while accompanied by Guzmn. His father spent most of the profits on liquor and women and often returned home with no money. Tired of his mismanagement, Guzmn, at the age of 15, cultivated his own marijuana plantation with four distant cousins (Arturo, Alfredo, Carlos, and Hctor), who lived nearby. With his first marijuana productions, Guzmn supported his family financially.28 When he was a teenager, however, his father kicked him out of his house, and he went to live with his grandfather.33 It was during his adolescence that Guzmn earned the nickname El Chapo, Mexican slang for Shorty, for his 1.68 m (5 ft., 6 in.) stature and stocky physical appearance.3435 Though most people in Badiraguato worked in the poppy fields of the Sierra Madr e Occidental throughout most of their lives, Guzmn left his hometown in search of greater opportunities through his uncle Pedro Avils Prez, one of the pioneers of Mexican drug trafficking, he left Badiraguato in his 20s and joined organized crimeGuzmn was captured in 1993 in Guatemala, extradited and sentenced to 20 years in prison in Mexico for murder and drug trafficking.117 After bribing prison guards, he was able to escape from a federal maximum-security prison in 2001.1 He was wanted by the governments of Mexico, the United States and by INTERPOL.18 The U.S. offered a US$5 million recognize for information leading to his capture, and the Mexican government offered areward of 30 million pesos (approximately US$2 million) for information on Guzmn.1 Guzmn was arrested again by Mexican authorities in Mexico on February 22, 2014. He was found inside his 4th floor condo at 608 Av del Mar in the beachfront Miramar condominium in Mazatln, Sinaloa,19 and was captured without a gunshot being fired.

Policing Levels, Roles, and Functions

As a Police headland and seeing and experiencing a high degree of overthrow in the department heads, and having to do a compute for the new fiscal year. This could be a trying time. Now the Mayor wants to hold a shop class with all the department heads and this is going to be tricky in getting everything done. The information that I will urgency to put together arebudget Training ManpowerIn addition, reports on crime and little issues facing the city. Let us talk about the budget first Here are the steps that I need to take I need to come up with a resolveable objective to the new fiscal year. As the Chief, I should have a preliminary figure and it should be realistic. I know that I can tweak it throughout the year. I also know to consult other members of the department. For the reason that they know more about the day to day operation. Analyze inflow. Realistic expectations of income require analysis of the preceding budgets. Before inputting preliminary numbers, compare m onth to month, absorb to quarter, and year to year figures from the previous year.(n.d., Withrow)Analyze outflow. Determine the unexpected expenses that might have an important factor on the budget. For instance, eachone retiring, any layoffs, possible hiring, training and any cost training and equipment for new employees. In addition, is any office equipment in need of updating? Now to prepare the budget. Before I do the final examination draft, I should consult with other department managers. For the reason it could have an impact on the budget.Budgets need to be adjusting in order to have everything you need to sour an operation. Now let us talk about training. As more and more higher-level officers are approaching retirement age and are retiring early, this is a problem for many police departments. Some will ignore the problem or would not think there is a crisis. Now I need to implement a Succession Planning Program to replace those that are leaving. For the most part , I dohave a plan to replace passel leaving the department, but I do not have one for supervisors and managers. The successor program I need to develop are more critical path in replacing investigators, specialists, supervisors, and managers,(June 2006, Michaelson). Usually the human resource is responsible for developing future supervisors and managers programs. It is to my benefit to help the human resource office in developing a new program for future leaders.We could develop the necessary skills or competencies based experiential set of scenarios, assignments, rotations, mentoring and coaching opportunities, and evaluations not only to leave alone the candidates with this experience but also to enable the agency to gain the benefit from this experience and information.(June 2006, Michealson). I can assign young officers with veteran officers and give them hazard to carry out a few tasksPlan an event Write a training bulletin Review and make recommendations to improve or modi fy department policies or proceduresConduct training Conduct search Write a proposal Write a grant Write a newsletter article Manage a committee write a report on the committees actions and recommendations, evaluate the committees success, and make a presentation on the committees findings. Assess equipment and supplies, research replacement be and options, and recommend replacing or updating them Counsel peersBecome mentor to young officers and college students Make a presentation to a local anesthetic community group Conduct a program evaluation with recommendations Write contingency plansWrite after action plans Work on unit authorisation report, to include use of statistical analysis Review the departments and the jurisdictions master plan Review staffing and budget requirements for the current and upcoming fiscal year Determine how staffing and budget will affect the role of Sergeants and Lieutenants. (June 2006,Michaelson).Even doing this I cannot forget the responsibiliti es of the individual preparation for leadership, which requiresUndertaking a formal academic course of study Taking a team leadership role in department activities Participating and leading in civil opportunities, such as parent teacher associations and civic clubs Networking with peers salty in intellectual discussion groupsAttending voluntary conferences and training sessions Reading the professional literature Studying national and local reports and analyzing the reports results Using the Web as a resource Serving as a guest lecturer in college class or accepting other speaking engagement savoury in research and reporting the findings. (June 2006, Michaelson).In developing all of this, I still need to have all of it documented. This way I have the accomplishments and failures of them. Then I can advance them as needed. If my police department ends up becoming short of officers due to them leaving, retiring, etc. I could implement a program called part-time Reserve Police Offi cers. Their responsibilities would consist ofCity hall security detail Police department lobby entrance staffing to assist visitors Increased law enforcement straw man during special events Prisoners transport and guarding for court appearances, medical care, and interjurisdictional transports Uniform patrol augmental when staffing shortages occur as a result of long term illnesses, injuries, workers compensation leave, vacations, training, and so on Supplemental resource for section commanders when incidents or details develop Resource for disasterincidents such as floods. (January 2012, Williams, Crowe, and Lowe)PTR police officers have reduced employment costs because part-time employees do ot earn vacation or sick time, holiday pay does not apply, and health care and retirement benefits are not available. These officers are issued department equipment and are covered by workers compensation insurance for work-related medical incidents. (January 2012, Williams, Crowe, Lowe)Now for crime report and critical issues, my sergeants and lieutenants could give me this information. Therefore, I would do these things as Chief of police. In which the budget, work force, training, crime report and the critical issue report, would be met for the fiscal year and for the workshop.

Academic Degree and Convocation Essay

You volition be glad to know that the convention will be held on fifteenth July, 2013, at our main Campus, Energy Acres, Bidholi Campus, Uttarakhand. We are privileged to entertain with us HE Shri Pranab Mukherjee, President of India as the Chief Guest, Shri Aziz Qureshi, Honble Governor of Uttarakhand and Shri Vijay Bahuguna, Honble Chief Minister of Uttarakhand will be the Guest of Honour. We are looking forward to see you at the Convocation. The following may kindly be noted at your end 1.You are pass along to send your confirmation for attending the Convocation latest by 21st June , 2013 by mail to your respective course coordinator with a copy marked to Dr Satya Sheel ( satyasheelddn. upes. ac. in ) as per the details given below (kindly indicate your Name, Enrollment No. & Course) 2. Please note that confirmation to attend the Convocation will be on first cum first serve basis. Confirmation received beyond 21st June will not be accepted under either circumstance. * Mohd Yaqoot at myaqootddn. upes. ac. in for MBA (PM) students * Ms. Shilpi Mukherjee at smukherjeeddn. upes. ac. in for MBA (IFM) students * Dr.P C Bahuguna at bahuganaddn. upes. ac. in for MBA (O&G) students. * Ms Surbhi Arora at saroraddn. upes. ac. in for MBA (ET) students. * Dr. B. K. Singh at binodsinghddn. upes. ac. in for MBA (L&SCM) students * Mr Vibhav Prasad Mathur at vpmathurddn. upes. ac. in for MBA (ISM) students. * Dr R Jayaraj at rjayarajddn. upes. ac. in for MBA (IBM) students. * Mr Tophan Patra at tpatraddn. upes. ac. in for MBA (PSM) students. * Mr Manish Yadav at myadavddn. upes. ac. in for MBA (AVM) students. * Mr. Sunil Barthwal at sunilbddn. upes. ac. in for BBA (O&G) students. * Mr. Rajesh Tripathi at rajesh. tripathiddn. upes. ac.in for BBA (AVO) students. * Dr. Vipul Sharma at vipulddn. upes. ac. in for Integrated BBA + MBA students * Mr Vikas Kumar at vkumarddn. upes. ac. in for Int B. Tech (APE) + MBA (O&G) students * Mr. Pankaj M Prasad at pmprasadddn. upes. a c. in for Int B. Tech (APE) + MBA (UAM) students. * Mr Bhalchandra Shinghan at bshinganddn. upes. ac. in for B. Tech (APE) Gasstream students. * Mr U twenty-four hour period Bhan at ubhanddn. upes. ac. in for B. Tech (APE) Upstream students * Dr. U Kedareswarudu at ukedareswarduddn. upes. ac. in for B. Tech (GSE) students. * Mr Kartik Sundarraj at ksundarrajddn. upes. ac. in for B. Tech (ASE) students * Mr.Pankaj Kr. Sharma at pankjpmeddn. upes. ac. in for B. Tech (ADE) students. * Mr. Pavan K Nanduri at pknanduriddn. upes. ac. in for B. Tech (AVE) students * Dr. Pankaj Srivastava at pksrivastavaddn. upes. ac. in for B. Tech (GIE) students. * Dr PSVS Sridhar at psvssridharddn. upes. ac. in for B. Tech (CSE) students. * Ms. N. Prasanthi at prasantiddn. upes. ac. in for B. Tech (EE) students * Ms. Madhu Sharma at madhusharmaddn. upes. ac. in for M. Tech (ES) students. * Ms. Nishanthini at nishanthinisddn. upes. ac. in for M. Tech (HSE) students. * Mr. Vishal Mishra at vmishraddn. upes . ac. in M. Tech (PDE) students.* Mr. Adarsh Kumar Arya at akaryaddn. upes. ac. in for M. Tech (PLE) students . * Dr. V. L Narsimhan at vlnarasimhamddn. upes. ac. in for M. Tech (PE) students. * Mr V S S Velidi Gurunadh at gvssvelididdn. upes. ac. in for M. Tech (CFD) students * Wg Cdr P K Gupta at pkguptaupes. ac. in for Executive MBA (O&G), Executive MBA (Power Management), Executive MBA (Aviation Management), Lateral B. Sc (Aviation Studies), Lateral B. Sc (Aircraft Maintenance) * Dr Anjali Midha at amidhaupes. ac. in for Ph. D Programs. * Ms. Shruti Reddy at sreddyddn. upes,ac. in for B. A LLB(Hons) with specialization in Energy Laws.2. The Convocation rehearsal will be held at 1400 hrs on 14th July, 2013 at our main Campus, Energy Acres, Bidholi, Dehradun. Buses would be available from 1300hrs-1330 hrs from FRI main gate to ferry you to the campus. 3. Attendance at the rehearsal is mandatory without which you will not be allowed to participate in the Convocation at any cost. 4. All the students are necessarily required to wear Convocation gown. This will be available on rent for Rs. 105 (total for rehearsal and Convocation Ceremony). You will have to pay a security deposit of Rs. 500/- which is refundable at the end of the convocation ceremony.The Convocation Gowns will be distributed on the day of the rehearsal. 5. All graduating students are expected to be seated by 1000 hrs on 15th July, 2013 for the Convocation Ceremony. 6. Formal dress code for boys and girls is mandatory. For Boys, lounge reason preferable dark color. UPES tie, black shoes and black socks are recommended. For Girls, the dress code is sarees. Please note that only those students who have completed the academic requirements and have been declared pass by the University and whose attendance at the Convocation has been confirmed by their Course Coordinator will be allowed to attend the Convocation.The list of all graduating students has been repose up on notice board and has been post ed on Student Portal. For details please contact Mr. A. P. Semwal / Mr. Rajeev Kumar Pandey at Dehradun Campus. For security reasons all the students are requested to carry their identity proof including the identity card of the student. We at UPES are very excited and look forward to meet you on 14th July, 2013 for liberal dress rehearsal and for the Convocation on 15th July, 2013. Thanking you, With Best Wishes, Deepa Verma Director (Institutional Affairs).

Employee Relations Management

Employee Relations is a process of managing diversity, flexibility and modify, which involves maintaining employer-employee singingships that contribute to satisfactory productivity, motivation, and morale. Employee Relations is concerned with preventing and resolving problems involving individuals, which arise out of or make a motion work situations.Employee Relations cover all areas such as employer & employee relationship, talk, employee participation and involvement, developments in collective bargaining, equal opportunities, grievances handling, disciplinary management, health and safety, industrial relations and utilization protection law, organizational change and people, personnel and recruitment and quality of working life etc. Today employers should now be undertaking an in-depth review of their border on to engagement relations.Organisations which out-perform their competitors do so because they apply a coherent set of people management and development consecrates appropriate to their needs. Successful organisations are increasingly those which subscribe a constructive relationship with employees and a management approach which enables them to develop and win on the full potential of their people. Considerable improvements have been made to the practice of employment relations in recent years. People are working unwaveringly and enjoy going to work. They want to learn.However, while the damaging effects of scant(p) relations have been radically reduced, many organisations are failing to secure the compulsory benefits that are available from improving them. Economic pressures dictate that organisations will change more than frequently than in the past. Technology and the demand for customised services are shifting managerial focus towards knowledge management and people as their find differentiators. This will require substantial changes in the understanding and behaviour of the people who work in organisations.Employees will need to ex tend their skills and use them more effectively. scarce change initiatives often fail to deliver the results expected of them, largely because people issues have been neglected or not fully thought through. The test of employment relationships in the future will be their effect on managing change and eliciting employees willing contribution. 2. EVOLUTION OF EMPLOYEE RELATIONS From the beginning of organized work activity when outgrowth one person directed the work of others, the subject of industrial relationsUntil the end of the 1970s, the acceptance of adversarial industrial relations, and therefore the need to resolve conflict, as being the innate(p) order led both management and unions to from develop collective bargaining to a fine art. At the end of the 1970s, the employee relations entered into a new era. jumbled collective bargaining played its part in bringing push down the elected government and marked the start of a new era during which some(prenominal)(prenominal) of the legislation underpinning trade union influence was removed and replaced by new legislation limiting the scope for damaging industrial action.Instead, a growing confederation of interests aimed at the maintenance of industrial peace and price stability in the context of substantial inward investment resulted in their making social partnership work at the national level. Similarly, in other major countries in Europe, social partnership at national level did not break down in the way in which it did in the UK. There is no doubt that attitudes to work and relationships at work have changed since the year 1970s.The driving force for much change has been economic and the agenda has been framed by managers. Working patterns and practices have become more flexible and managers are using people more effectively. The verge Employee Relations was conceived as a replacement for the term Industrial Relations. Industrial relations is generally understood to refer the relationship betwe en employers and employees collectively. The even up of industrial relations can be measured on number of different dimensions.From peak of some 12 million plus union memberships has travel to around 7 million today. Between 1980 and 2000, the coverage of collective agreements contracted from over three-quarters to under a third of employed workforce. At the same time, the hurtle of issues over which bargaining took place decreased massively. The content of collective bargaining has been reflected in a dramatic reduction in industrial actions since 1980. 3. IMPACT OF globalization ON EMPLOYEE RELATIONSWhile there is widespread agreement that changes in the international economy associated with globalisation have important consequences for employment relations, there are fewer consensuses close to their nature and significance. One view is that globalization has created pressures for convergence between different countries in regard to employment relations. Another is that nation al level institutions play a mediating role in maintaining cross-national differences, leading to divergence.A third school rejects the convergence/divergence dichotomy and argues that complex interactions between global and national (or local) forces shape employment relations outcomes. 4. CHALLENGES IN 21ST CENTURY Customers have become more demanding. They want increasingly high quality service and they want to know that the latest engineering science at the lowest price is available. The achievement of business goals and financial returns is increasingly depend on delivery by organizations employees, where the employee relations play major role.The communication is the glue that makes policies real when they are ineffective. Two-way communication in employee relations is highly necessary in todays situations. Getting communication make up involves both professionalism and persistence. The qualities required include focusing on positive behaviours and outcomes, taking a positiv e problem solving approach, anticipating problems, recommending solutions and being able to offer proficient advice to senior management on implementations. The ability to manage conflict remains a key issue for many organizations.Mediations as a method or technique of resolving work place issues represents an important shift from the traditional industrial relations framework, with its emphasis on formal discipline and grievance procedures, towards more of a win-win approach consisted with the philosophy of human resources management. Commitment and employee engagement are crucial to performance but they are not consistently high affluent in HR- priorities. The employee information and consultation are helpful in raising the profile of employee voice and involvement.More effort need to be put into training and musical accompaniment employees to achieve their job objectives. As examples, team-working and change management as the basis off establishing and maintaining motivation a nd commitment, is among one of critical role of employee relations managers these days. 5. CONCLUSION Employee relation is maintaining employee employer relationship that contributing to satisfactory productivity, motivating employees and ensuring healthy employee morale.The most successful organisations are those which have constructive relationships with employees and a management approach which enables them to develop and draw on the full potential of their people. Considerable improvements have been made to the practice of employment relations in recent years. People are working hard and enjoy going to work. They want to learn. However, while the damaging effects of poor relations have been radically reduced, many organisations are failing to secure the positive benefits that are available from improving them.

Discuss how this idea is highlighted in Arthur Miller Essay

Arthur Miller was a playwright who dealt with many issues and themes. His play The crucible involves a past parallel of McCarthyism in the form of the Salem Witch Trials. McCarthyism came about when a politician named Joseph McCarthy tried to cover up his shaping of an anticommunist form _or_ system of government by using scapegoats. In this play, a girl named Abigail accused almost the whole town of witchcraft. This happened because in her own cunning way she turned the care against her, created when some girls in the town becoming ill, and used a scapegoat to avoid being hanged. She had had an affair with a local towns-person, John Proctor.The play The melting pot deals with many issues and themes relevant both then and now. Persecution and power are probably the most influential. Persecution, by definition, is the subjecting of a group of people to cruel or inequitable treatment, for example because of their ethnic origin or religious beliefs. In The Crucible all of the prisone rs were persecuted by torture i.e. stoning, or by force i.e. being dedicate in jail.Righteousness is a thing wanted by many humans, mainly religious ones, as they want to be seen as good in the eyes of their God. This can sometimes lead to the persecution and torture of others in order to do something seen as righteous. In The Crucible the whole role of persecution in the trials raises the public debate of human cruelty in the name of righteousness. As the persecution of the prisoners is not righteous in itself, the goal it is set out to achieve is.Peoples minds turn tail today as they did then. While they carried out hunts for witches to evict them from society, we today witch hunt for paedophiles and terrorists to exclude them. We may think it is radical today to hunt shoot down and kill people just because of what a culture thinks exactly we carry on doing it to a lesser extent today. The search to uncover paedophiles is a instance where people want to know who the paedophi les are in order to avoid them and even hurt them and punish them for what they extradite done and to maintain a mixer order. Witchcraft is not a bad practice but the people back then saw it as Satanism although it was not. It was conceived from the fact that illustrations of the Wicca god were found, who had horns, and bared a strong resemblance to the Christian view of Satan. That is why which craft was frowned upon, and people were hunted down in order to stop public outrage. refreshing people of the day, such as Elizabeth Proctor and Reverend Hale, saw the absurdity of the witch hunts. They did not want to play a part in a system where if you avouched to being a witch, which was feared, you were set free and if you claimed to be innocent, you were killed unnecessarily.Among many others, these are the main sins committed in the play in this so-called consecrated society.Throughout the play, Abigail Williams had a hatred for Elizabeth Proctor, for she got to keep John. When Ab igail realised that she held the power to destroy a person she quickly accused Elizabeth of being a witch, so she could have John for herself. However, John did not want to be with Abigail and so she ran away to avoid embarrassment and a revolt against her accusations. The innocent people who were accused of witchcraft had an obvious hatred for Abigail and the girls, as they had sentenced them to death.Abigails accusation of Elizabeth Proctor stemmed from the affair she had had with her husband. This showed John Proctors lack of self will with lust at the start, which he became to fear later. He feared that if he lusted after Abigail again he would have to stay with her and lose his wife and his clean name. Also he was disgusted with Abigails accusations in court and was disgraced that he even slept with her. Since Reverend Parris was appointed in Salem, he had done nothing but spend the collection on greedy things such as golden candlesticks. This was seen as valuing mortal possess ions over God. With him being a Reverend it caused much uproar with Elizabeth Proctor and the whole residential areaElizabeth Pewter ones werent good enough he had to go and get gold onesHer shock about the minister expressing such need for golden candlesticks was evidence to her source of greed and valuing possessions over God. Reverend Hale of Beverley was so proud of his reputation as a witch hunter that when he thought the accusations had got out of pass he wouldnt speak up and protect innocent people. Rebecca Nurse likewise was so proud of her reputation in Salem that she would not confess to witchcraft to avoid being hanged. It was the extremely good reputation of Rebecca Nurse and her hanging that ended the madness. Abigail had sworn to get revenge on Elizabeth Proctor and she did, but it was pointless as she had failed to see the consequences of her actions. John would never have chosen Abigail over Elizabeth whether she was alive or dead.

Abraham Lincolns Assassination Essay

The destruction of a legacyIn the year 1810, Abraham capital of Nebraska was the man who had eyes for the future. He had remarkable hopes, dreams and goals he wished to accomplish for his agricultural. He was a member of the union and was working towards freeing the slaves, and crushing the confederacy. Most of the country supported him and his goals. Yet there were still a few states that supported slavery and cute capital of Nebraska dead. Confederates were worries that Lincoln would take away their rights. However the confederates did non see that Lincoln was made for greatness. Unfortunately, his life was cut short by behind Wilkes Booth, Abraham Lincolns assassin. On April 14, 1865, John Wilkes Booth became the first individual to assassinate an American chairwoman when he shot and killed Abraham Lincoln in his box at Fords field of view in Washington (Kauffman). John Wilkes Booth was a supporter of the confederacy. He was convinced Lincoln was going to destroy the constit ution. So out of frustration, anger and delusion he begun to plot his forge to assassinate president Lincoln. Booth had several failed attempts on Lincolns life. Luckily enough for Booth, Lincoln planed to see the play My American Cousin, at Fords Theater.See more point out Twains Humorous Satire in Running for Governor EssayBooth happened to be a known actor who preformed at Fords Theater so he had no problem attending the play. Because Booth was an actor he knew the details and the schedule to My American Cousin. Wilkes was able to go in to Lincolns booth and time the shot perfectly with the music from the play so that people attending the play would not notice. From a distance of closely four feet behind Lincoln, Booth fired a bullet into the Presidents brain. Major Rathbone sprang up to grab the assassin, but Booth wrested himself away after slashing the major with a large knife. Booth rushed to the front of the box and Booth leapt over the railing, where he fractured the fibu la in his left leg. rise from the stage, Booth shouted, Sic semper tyrannus and ran across the stage and fled from the back of the theatre (Bogar). Many say that Wilkes did not work alone and some say he did, unfortunately that will never be known. While many people assumed thathidden forces were behind the assassination, others speculated that Booth had acted on his own. The reason he wanted to immortalize himself (Kauffman).Although back in that time period, people would often forget to check and examine every speculation of order, or not even read the means to investigate said evidence, so things would go overlooked. Such as John Wilkes Booth just being a small pawn in the larger scheme of Abraham Lincolns assassination. John Wilkes Booths assassination of Lincoln is said to be part of a whole conspiracy theory. When Booth began formulating a plan for Lincolns assassination, he recruited friends for his operation. Booth and his fellow conspirators met to plan their assassinati on on the president. They originally planned to abduct the president and hold him for ransom, however things did not go as planned. When capital of Virginia fell, the plans turned to assassination. First, there was the failed effort to blow up the White House, followed by the successful effort to kill Lincoln at the theater(Steers). Wilkes heard the president would be attending the play My American Cousin, so Wilkes jumped on that opportunity and made a plan with his conspirators. Unlike Booth, his conspirators did not exactly support the fancy of abducting the president during the play so they decided to terminate the plan.Nevertheless Wilkes when A-wall and decided to move forward with the plan, with the result being successful. The idea that Lincoln was killed as part of a grand conspiracy of Confederates arose almost immediately after the assassination (Steers). Confederates wanted Lincoln dead for the hope for the confederacy rising. Lincoln was viewed as a legitimate wartime target (Steers). Part of the theory of reason for Lincolns assassination are linked to the Unions failed raid on Richmond. This raid was viewed as incriminating evidence of Lincolns determination and will to end the war. Ending the war was what the confederacy was afraid of. The confederacy wanted to be rid of Lincoln so they could not get hold of to conform and agree to Lincolns new ideas and upcoming laws. To prevent Lincolns ideas from becoming actions, the confederacy took matters in their own hands. Lincolns assassination was the end of a legacy. He died to young and to soon. Abraham Lincoln was betrayed by his country, being left for dead with out any peace but just the hope of his ideas and goals to be carried out my upcoming successors. His assassination was unfair and uncalled for. His country went behind his back and plotted his death becausesome people were too lascivious and arrogant to see Lincolns full potential and what Lincoln could have provided for America. Who knows what Lincoln would have accomplished if his death wasnt so early.

Acca Notes

S T U D Y T E X T PERFORMANCE MANAGEMENT BPP Learning Media is the sole ACCA Platinum okay Learning realmner essence for the ACCA skill.In this, the merely Paper F5 micklevass text to be reviewed by the interrogatoryiner We discuss the best st regularisegies for studying for ACCA examens We highlight the or so important elements in the broadcast and the key skills you exit study We signpost how to to each one one chapter links to the syllabus and the study bespeak We provide carve up of exam focus points demonstrating what the examiner provide want you to do We emphasise key points in regular fast prior summaries We test your association of what youve studied in quick quizzes We examine your at a lower placestanding in our exam question bank We generator in all(a) the important topics in our full indexBPPs i-Pass product to a fault supports this written propound. FOR EXAMS IN 2011 First edition 2007 Fourth edition November 2010 ISBN 9780 7517 8921 8 (Previous ISBN 9870 7517 6367 6) British Library Cataloguing-in-Publication info A catalogue record for this book is avail qualified from the British Library Published by BPP Learning Media Ltd BPP Ho theatrical role, Aldine Place London W12 8AA www. bpp. com/learningmedia Printed in the United acres We argon g enjoinful to the Association of Chartered Certified Accountants for permission to re stir past examination questions.The suggested solutions in the exam answer bank bear been nimble by BPP Learning Media Ltd, except where some otherwise stated. All our rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any way, electronic, mechanical, photocopying, recording or otherwise, with go forth the prior written permission of BPP Learning Media Ltd.Your learning poppycocks, published by BPP Learning Media Ltd, atomic weigh 18 printed on paper sourced from sustainable, managed forests. BPP Learning Me dia Ltd 2010 ii Contents Page entryway Helping you to pass the ONLY F5 withdraw Text reviewed by the examiner removeing F5 The exam paper v vii xi 3 21 33 41 49 63 73 95 123 157 173 199 215 233 267 287 319 337 365 387 403 419 463 take off A specializer damage and charge history techniques 2a 2b 2c 2d 2e 3 4 5 6 7 8 9 10 11 12 13 14 15 16 be legal action establish comprise Target be Lifeturn equal Throughput accounting environmental accounting damage volume desexualize headway (CVP) analysis Limiting factor analysis Pricing decisions Short-term decisions Risk and un accreditedty Objectives of budgetary name budgetary systems Quantitative analysis in budgeting Budgeting and stock(a) constituteing Variance analysis behavioral aspects of standard constituteing Performance measurement Divisional performance measures raise performance focusing startle B Decision- do techniques Part C BudgetingPart D Standard courting and variances analysis Part E Performance mea surement and control interrogation question bank interrogation answer bank Index Review form and free prize draw Contents iii A none more or less copyright Dear Customer What does the little mean and why does it matter? Your market-leading BPP books, course corporals and e-learning materials do not write and update themselves. muckle write them on their own behalf or as employees of an organisation that invests in this employment. Copyright law protects their livelihoods. It does so by creating rights over the subprogram of the content.Breach of copyright is a form of theft as considerably as being a criminal offence in some jurisdictions, it is potentially a serious prisonbreak of professional ethics. With current technology, things might seem a bit hazy alone, basically, without the express permission of BPP Learning Media Photocopying our materials is a breach of copyright S atomic number 50ning, ripcasting or mutation of our digital materials into disparate fil e formats, uploading them to facebook or emailing them to your fri closedowns is a breach of copyright You can, of course, sell your books, in the form in which you shit bought them once you have completed with them. Is this fair to your fellow students? We update for a reason. ) But the e-products argon sell on a single user licence basis we do not supply unlock codes to people who have bought them second base-hand. And what about outside the UK? BPP Learning Media strives to prep be our materials available at prices students can afford by local notion arrangements, pricing policies and partnerships which atomic number 18 clearly listed on our website. A tiny minority ignore this and indulge in criminal activity by illegally photocopying our material or supporting organisations that do.If they act illegally and unethically in one area, can you really trust them? iv Helping you to pass the ONLY F5 rent Text reviewed by the examiner BPP Learning Media the sole Platinum App roved Learning Partner content As ACCAs sole Platinum Approved Learning Partner content, BPP Learning Media gives you the unique opportunity to use examiner-reviewed study materials for the 2011 exams. By incorporating the examiners comments and suggestions regarding the depth and breadth of syllabus coverage, the BPP Learning Media Study Text provides excellent, ACCA-approved support for your studies. NEW FEATURE the PER alertBefore you can qualify as an ACCA member, you do not simply have to pass all your exams but also fulfil a three year practical experience requirement (PER). To help you to recognise areas of the syllabus that you might be able to apply in the workplace to achieve diametric performance objectives, we have introduced the PER alert feature. You get out find this feature finishedout the Study Text to move you that what you are learning to pass your ACCA exams is equally usable to the fulfilment of the PER requirement. Tackling studying analyse can be a d aunting prospect, specially when you have lots of other commitments.The different features of the text, the purposes of which are explained fully on the Chapter features foliateboy, will help you whilst studying and improve your chances of exam success. Developing exam awareness Our Texts are all told foc utilize on helping you pass your exam. Our advice on Studying F5 outlines the content of the paper, the necessary skills the examiner expects you to demonstrate and any brought ship knowledge you are anticipate to have. Exam focus points are included within the chapters to highlight when and how specific topics were examined, or how they might be examined in the future. victimisation the Syllabus and Study Guide You can find the syllabus and Study Guide on page xi of this Study Text Testing what you can do Testing yourself helps you develop the skills you need to pass the exam and also confirms that you can recall what you have learnt. We include interrogations lots of them both within chapters and in the Exam Question Bank, as well as Quick Quizzes at the end of each chapter to test your knowledge of the chapter content. Introduction v Chapter features Each chapter contains a number of helpful features to guide you through each topic.Topic list Topic list Syllabus reference Tells you what you will be studying in this chapter and the relevant section numbers, together the ACCA syllabus references. Puts the chapter content in the context of the syllabus as a whole. Links the chapter content with ACCA guidance. Highlights how examinable the chapter content is probably to be and the ways in which it could be examined. What you are fictitious to know from previous studies/exams. Summarises the content of main chapter headings, allowing you to preview and review each section easily. Demonstrate how to apply key knowledge and techniques.Definitions of important concepts that can a slap-up deal earn you easy marks in exams. Tell you when and how specifi c topics were examined, or how they may be examined in the future. Formulae that are not given in the exam but which have to be learnt. This is a new feature that gives you a useful indication of syllabus areas that closely relate to performance objectives in your matter-of-fact Experience Requirement (PER). Introduction Study Guide Exam Guide Knowledge brought forward from precedent studies FAST away Examples Key ground Exam focus points Formula to learn Question Case StudyGive you essential practice of techniques covered in the chapter. Provide real world examples of theories and techniques. Chapter Roundup Quick Quiz Exam Question Bank A full list of the Fast Forwards included in the chapter, providing an easy source of review. A quick test of your knowledge of the main topics in the chapter. Found at the back of the Study Text with more comprehensive chapter questions. Cross referenced for easy navigation. vi Introduction Studying F5 The F5 examiner wants candidates to be ab le to apply counselling accounting techniques in business environments.The key question you need to be able to answer is what does it all real mean? Modern technology is capable of producing vast amounts of prudence accounting information but it has to be used to help managers to make good decisions and manage effectively. The emphasis in this paper is in that respectfore on practical elements and application to the real world. The examiner does not want to trick you and papers will be fair. The F5 examiner The examiner for this paper is Ann Irons, who replaced Geoff Cordwell from the December 2010 sitting onwards.Ann Irons has written several articles in Student Accountant, including one on how to approach the paper ( phratry 2010 issue). win sure you read these articles to gain further insight into what the examiner is looking for for. Syllabus update The F5 syllabus has been updated for the June 2011 sitting onwards. The full syllabus and study guide can be found in this S tudy Text on pages xi to xviii. The main changes are the omission of backflush accounting and the inclusion of environmental accounting and greet volume do good (CVP) analysis. The syllabus order has also been changed, which has been reflected in this Study Text.A full summary of the changes to the F5 syllabus is given on the adjoining page.. Introduction vii viii Introduction Introduction ix 1 What F5 is about The aim of this syllabus is to develop knowledge and skills in the application of management accounting techniques. It covers modern techniques, decision making, budgeting and standard be, concluding with how a business should be managed and controlled. F5 is the middle paper in the management accounting section of the qualification structure. F2 concerns just techniques and P5 thinks strategically and considers environmental factors.F5 requires you to be able to apply techniques and think about their pretend on the organisation. 2 What skills are required? You are judge to have a core of management accounting knowledge from Paper F2 You will be required to carry out calculations, with clear workings and a logical structure You will be required to interpret data You will be required to explain management accounting techniques and discuss whether they are appropriate for a particular organisation You must(prenominal) be able to apply your skills in a practical context 3 How to improve your chances of go across There is no choice in this paper, all questions have to be answered. You must hence study the entire syllabus, there are no condensed-cuts Practising questions under timed conditions is essential. BPPs Practice and Revision Kit contains 20 mark questions on all areas of the syllabus Questions will be based on simple scenarios and answers must be focused and specific to the organisation coiffure plans will help you to focus on the requirements of the question and enable you to manage your time effectively Answer all parts of t he question.Even if you cannot do all of the calculation elements, you will still be able to gain marks in the discussion parts Make sure your answers focus on practical applications of management accounting, common sense is essential Keep an eye out for articles as the examiner will use Student Accountant to communicate with students Read journals etc to pick up on ways in which real organisations apply management accounting and think about your own organisation if that is relevant 4 Brought forward knowledge You will need to have a good working knowledge of basic management accounting from Paper F2.Chapter 1 of this Study Text revises comprise and brought forward knowledge is identified throughout the text. If you struggle with the examples and questions used to revise this knowledge, you must go back and revisit your previous work. The examiner will assume you know this material and it may form part of an exam question. x Introduction The exam paper Format of the paper The exam is a three-hour paper containing five compulsory 20 mark questions. You also have 15 minutes for reading material and planning. There will be a mixture of calculations and discussion and the examiners aim is to cover as much of the syllabus as possible.Syllabus and Study Guide The F5 syllabus and study guide can be found on the next page. Introduction xi xii Introduction Introduction xiii xiv Introduction Introduction xv xvi Introduction Introduction xvii xviii Introduction Introduction xix Analysis of past papers The table to a lower place provides details of when each element of the syllabus has been examined and the question number in which each element appeared. Further details can be found in the Exam Focus Points in the relevant chapters. Covered in Text chapter June 2010 Dec 2009 June 2009 Pilot PaperSPECIALIST COST AND MANAGEMENT ACCOUNTING TECHNIQUES 2a 2b 2c 2d 2e 3 4 5 6 7 8 9 9 10 8 Activity based be Target cost Life cycle costing Throughput accounting Environmental a ccounting DECISION-MAKING TECHNIQUES make up-volume- return analysis Multi-limiting factors and the use of linear programming and shadow pricing Pricing decisions Make-or-buy and other short-term decisions Dealing with put on the line and uncertainty in decision-making BUDGETING Objectives Budgetary systems Types of budget Quantitative analysis in budgeting Behavioural aspects of budgeting STANDARD COSTING AND VARIANCE ANALYSIS 11 12 12 13 13 14 15 16 Budgeting and standard costing Basic variances and operating systems Material mix and yield variances Planning and operational variances Behavioural aspects of standard costing PERFORMANCE MEASUREMENT AND CONTROL The scope of performance measurement Divisional performance and transfer pricing Performance analysis in not-for-profit organisations and the public sector 4 4 2 4 2 2 1 1 3 2 2 5 3 5 3 3 1, 4 4 4 1 1 2 1 xx Introduction Exam formulae Set out below are the formulae you will be given in the exam. If you are not sure what the symbols mean, or how the formulae are used, you should refer to the appropriate chapter in this Study Text. Chapter in Study Text Learning curve Y = axb Where Y a x b LR = cumulative average time per unit to produce x units = the time taken for the first unit of output = the cumulative number of units = the index of learning (log LR/log 2) = the learning rate as a decimal 10 Regression analysis y = a + bx b= a= 10 n ? xy ? ? x ? y n ? x 2 ? (? ) 2 ?y b? x ? n n (n? x 2 ? (? x)2 )(n? y 2 ? (? y)2 ) 5 r= n? xy ? ? x ? y Demand curve P b a = a bQ = change in price change in quantity = price when Q = 0 MR = a 2bQ Introduction xxi xxii Introduction P A R T A Specialist cost and management accounting techniques 1 2 saluteing Topic list 1 Costing 2 The problem of budget itemss 3 A revision of compactness costing 4 command processing smasher do exploitation 5 peripheral costing 6 Absorption costing and bare(a) costing compared Introduction Part A of this Study Text looks at specia liser cost and management accounting techniques. This chapter serves as a revision of concepts you will have covered in your previous studies.In the future(a) chapter we will be looking at more complex techniques so it is important that you are familiar with the key concepts and terminology in this chapter. If you want to get free study material of CAT, ACCA, CIMA, CFA, CIA visit freefor911. wordpress. com 3 Exam guide This chapter serves as an introduction to your study of cost and management accounting techniques, as knowledge is assumed from Paper F2 focussing Accounting and is still examinable at this level. Questions in this paper will focus on interpretation rather than doing calculations. 1 Costing FAST FORWARD Costing is the process of determining the be of products, portions or activities.Cost accounting is used to determine the cost of products, jobs or breaks (whatever the organisation happens to be involved in). much(prenominal) be have to be built up victimisa tion a process cognize as cost accumulation. In your earlier studies you will have learnt how to accumulate the various cost elements which make up keep down cost. Absorption costing cost accumulation system 2 The problem of viewgraphs FAST FORWARD In contract cost, or smashers, are be incurred in making a product or providing a function, but which cannot be traced civilizely to the product or utility. Absorption costing is a means of incorporating a fair share of these cost into the cost of a unit of product or service provided.If a company lyings a product, the cost of the product will include the cost of the raw materials and components used in it and cost of the aim effort required to make it. These are direct be of the product. The company would, however, incur many other cost in making the product, which are not directly attributable to a single product, but which are incurred generally in the process of manufacturing a large number of product units. These are indir ect costs or command processing overhead times. such costs include the following. Factory rent and pass judgment cable car depreciation Supervision costs Heating and lighting 4 1 Costing ? Part A Specialist cost and management accounting techniques Key termsA direct cost is a cost that can be traced in full to the product, service or department that is being costed. An indirect cost or overhead is a cost that is incurred in the course of making a product, providing a service or running a department, but which cannot be traced directly and in full to the product, service or department. In some companies, the overheads cost might greatly exceed the direct proceeds costs. It might seem unreasonable to ignore indirect costs entirely when accumulating the costs of making a product, and yet there cannot be a completely satisfactory way of sharing out indirect costs in the midst of the many different items of output signal which expediency from them. 2. Using submersion costi ng to deal with the problem of overheads Traditionally, the view has been that a fair share of overheads should be added to the cost of units produced. This fair share will include a portion of all performance overhead expending and possibly administration and marketing overheads alike. This is the view embodied in the principles of intentness costing. 2. 1. 1 Theoretical justification for development assiduousness costing All end product overheads are incurred in the end product of the organisations output and so each unit of the product receives some benefit from these costs. Each unit of output should therefore be charged with some of the overhead costs. 2. 1. 2 Practical reasons for using absorption costing (a) gillyflower paygrades Inventory in hand must be valued for two reasons. i) (ii) For the stop inventory figure in the statement of fiscal position For the cost of gross sales figure in the income statement The valuation of inventories will affect profitabilit y during a period because of the way in which the cost of sales is frontd. Cost of goods sold = (b) Pricing decisions Many companies attempt to set change prices by calculating the full cost of occupation or sales of each product, and then adding a margin for profit. Full cost plus pricing can be particularly useful for companies which do jobbing or use up work, where each job or contract is different, so that a standard unit sales price cannot be improve. Without using absorption costing, a full cost is difficult to ascertain. c) Establishing the profitability of different products This argument in favour of absorption costing states that if a company sells more than one product, it will be difficult to judge how profitable each individual product is, unless overhead costs are shared on a fair basis and charged to the cost of sales of each product. cost of goods produced + the value of opening inventories the value of occlusion inventories 2. 2 Using marginal costing to deal with the problem of overheads For many purposes absorption costing is less useful as a costing mode than marginal costing. In some situations, absorption costing can be misleading in the information it supplies.Advocates of marginal costing take the view that only the shifting costs of making and selling a product or service should be identified. heady costs should be dealt with separately and treated as a cost of the accounting period rather than shared out somehow between units produced. Some overhead costs are, Part A Specialist cost and management accounting techniques ? 1 Costing 5 however, variable costs which increase as the entireness level of activity rises and so the marginal cost of production and sales should include an amount for variable overheads. 3 A revision of absorption costing FAST FORWARD Absorption costing is a traditional approach to dealing with overheads, involving three stages allocation, apportionment and absorption.Apportionment has two stages, gener al overhead apportionment and service department cost apportionment. Key term Absorption costing is a method of product costing which aims to include in the total cost of a product (unit, job and so on) an appropriate share of an organisations total overhead, which is generally taken to mean an amount which reflects the amount of time and effort that has gone into producing the product. You should have covered absorption costing in your earlier studies. We will therefore summarise the simpler points of the topic but will go into some detail on the more complex areas to refresh your memory. Knowledge brought forward from earlier studiesAbsorption costing Product costs are built up using absorption costing by a process of allocation, apportionment and overhead absorption. parceling is the process by which whole cost items are charged directly to a cost unit or cost centre. put costs are allocated directly to cost units. Overheads clearly identifiable with cost centres are allocate d to those cost centres but costs which cannot be identified with one particular cost centre are allocated to general overhead cost centres. The cost of a warehouse security hold up would therefore be charged to the warehouse cost centre but heating and lighting costs would be charged to a general overhead cost centre.The first stage of overhead apportionment involves sharing out (or apportioning) the overheads within general overhead cost centres between the other cost centres using a fair basis of apportionment (such as floor area occupied by each cost centre for heating and lighting costs). The second stage of overhead apportionment is to apportion the costs of service cost centres (both directly allocated and apportioned costs) to production cost centres. The final stage in absorption costing is the absorption into product costs (using overhead absorption rates) of the overheads which have been allocated and apportioned to the production cost centres. Costs allocated and apport ioned to non-production cost centres are unremarkably deducted from the full cost of production to arrive at the cost of sales. Question Cost apportionmentBriefly discuss the type of factors which could affect the choice of the bases an organisation can use to apportion service department costs. 6 1 Costing ? Part A Specialist cost and management accounting techniques Answer (a) (b) (c) (d) (e) The type of service being provided The amount of overhead expenditure involved The number of departments benefiting from the service The ability to be able to produce realistic estimates of the usage of the service The resulting costs and benefits Question More cost apportionment A company is preparing its production overhead budgets and determining the apportionment of those overheads to products. Cost centre expenses and related information have been budgeted as follows. number $ 78,560 16,900 16,700 2,400 8,600 3,400 40,200 402,000 coulomb 35,000 25,200 45,000 Machine shop A $ 8,586 6,400 Machine shop B $ 9,190 8,700 assembly $ 15,674 1,200 Canteen $ 29,650 600 Maintenance $ 15,460 Indirect wages Consumable materials permit and rates Buildings insurance Power Heat and light Depreciation ( instrumentry) Value of carry Power usage (%) Direct labour (hours) Machine usage (hours) Area (sq ft) compulsory 201,000 55 8,000 7,200 10,000 179,000 40 6,200 18,000 12,000 22,000 3 20,800 15,000 6,000 2 2,000 Using the direct apportionment to production departments method and bases of apportionment which you consider most appropriate from the information provided, calculate overhead totals for the three production departments. AnswerTotal $ Indirect wages 78,560 Consumable materials 16,900 Rent and rates 16,700 Insurance 2,400 8,600 Power Heat and light 3,400 Depreciation 40,200 166,760 reallocate Reallocate Totals 166,760 A $ 8,586 6,400 3,711 533 4,730 756 20,100 44,816 7,600 4,752 57,168 B $ 9,190 8,700 4,453 640 3,440 907 17,900 45,230 5,890 11,880 63,000 Assembly $ 15,674 1,200 5,567 800 258 1,133 2,200 26,832 19,760 46,592 MainCanteen tenance $ $ 29,650 15,460 600 2,227 742 320 107 172 453 151 33,250 16,632 (33,250) (16,632) Basis of apportionment authentic Actual Area Area Usage Area Val of mach Direct labour Mach usage Part A Specialist cost and management accounting techniques ? 1 Costing 7 4 Overhead absorption FAST FORWARDAfter apportionment, overheads are absorbed into products using an appropriate absorption rate based on budgeted costs and budgeted activity levels. Having allocated and/or apportioned all overheads, the next stage in absorption costing is to add them to, or absorb them into, the cost of production or sales. 4. 1 Use of a predetermined absorption rate Knowledge brought forward from earlier studies Step 1 Step 2 Step 3 The overhead likely to be incurred during the coming year is estimated. The total hours, units or direct costs on which the overhead absorption rates are based (activity levels) are e stimated. Absorption rate = estimated overhead ? budgeted activity level 4. 2 Choosing the appropriate absorption base Question Absorption basesList as many possible bases of absorption (or overhead recovery rates) as you can think of. Answer (a) (b) (c) (d) (e) (f) (g) (h) A dowry of direct materials cost A percentage of direct labour cost A percentage of prime cost A percentage of factory cost (for administration overhead) A percentage of sales or factory cost (for selling and statistical distribution overhead) A rate per machine hour A rate per direct labour hour A rate per unit The choice of an absorption basis is a matter of judgement and common sense. There are no strict rules or formulae involved. But the basis should realistically reflect the characteristics of a given cost centre, avoid undue anomalies and be fair.The choice will be significant in determining the cost of individual products, but the total cost of production overheads is the budgeted overhead expenditure, n o matter what basis of absorption is selected. It is the relative share of overhead costs borne by individual products and jobs which is affected. Question Absorption rates Using the information in and the results of the question on page 7, determine budgeted overhead absorption rates for each of the production departments using appropriate bases of absorption. 8 1 Costing ? Part A Specialist cost and management accounting techniques Answer Machine shop A Machine shop B Assembly $57,168/7,200 = $7. 94 per machine hour $63,000/18,000 = $3. 50 per machine hour $46,592/20,800 = $2. 24 per direct labour hour 4. 3 Over and under absorption of overheads FAST FORWARDUnder-/over-absorbed overhead occurs when overheads incurred do not equal overheads absorbed. The rate of overhead absorption is based on estimates (of both numerator and denominator) and it is quite likely that either one or both of the estimates will not agree with what actually occurs. Actual overheads incurred will probably be either greater than or less than overheads absorbed into the cost of production, and so it is almost inevitable that at the end of the accounting year there will have been an over absorption or under absorption of the overhead actually incurred. Over absorption means that the overheads charged to the cost of sales are greater than the overheads actually incurred.Under absorption means that insufficient overheads have been included in the cost of sales. Suppose that the budgeted overhead in a production department is $80,000 and the budgeted activity is 40,000 direct labour hours, the overhead recovery rate (using a direct labour hour basis) would be $2 per direct labour hour. Actual overheads in the period are, say $84,000 and 45,000 direct labour hours are worked. $ Overhead incurred (actual) 84,000 90,000 Overhead absorbed (45,000 ? $2) Over-absorption of overhead 6,000 In this example, the cost of production has been charged with $6,000 more than was actually spent and so t he cost that is recorded will be too high.The over-absorbed overhead will be an adjustment to the profit and loss account at the end of the accounting period to reconcile the overheads charged to the actual overhead. Question Under and over-absorption The total production overhead expenditure of the company in the questions above was $176,533 and its actual activity was as follows. Machine shop A Machine shop B Assembly Direct labour hours 8,200 6,500 21,900 Machine usage hours 7,300 18,700 Required Using the information in and results of the previous questions, calculate the under- or over-absorption of overheads. Answer $ Actual expenditure Overhead absorbed Machine shop A Machine shop B Assembly $ 176,533 ,300 hrs ? $7. 94 18,700 hrs ? $3. 50 21,900 hrs ? $2. 24 57,962 65,450 49,056 172,468 4,065 Under-absorbed overhead Part A Specialist cost and management accounting techniques ? 1 Costing 9 4. 4 The reasons for under-/over-absorbed overhead The overhead absorption rate is pred etermined from budget estimates of overhead cost and activity level. Under or over recovery of overhead will occur in the following circumstances. Actual overhead costs are different from budgeted overheads. The actual activity level is different from the budgeted activity level. Actual overhead costs and actual activity level differ from those budgeted. QuestionOver and under-absorption Elsewhere has a budgeted production overhead of $180,000 and a budgeted activity of 45,000 machine hours. Required Calculate the under-/over-absorbed overhead, and note the reasons for the under-/over-absorption in the following circumstances. (a) (b) (c) Actual overheads cost $170,000 and 45,000 machine hours were worked. Actual overheads cost $180,000 and 40,000 machine hours were worked. Actual overheads cost $170,000 and 40,000 machine hours were worked. Answer The overhead recovery rate is $180,000/45,000 = $4 per machine hour. (a) Actual overhead Absorbed overhead (45,000 ? $4) Over-absorbe d overhead $ 170,000 180,000 10,000Reason Actual and budgeted machine hours are the similar but actual overheads cost less than expected. (b) Actual overhead Absorbed overhead (40,000 ? $4) Under-absorbed overhead $ 180,000 one hundred sixty,000 20,000 Reason Budgeted and actual overhead costs were the same but fewer machine hours were worked than expected. $ (c) Actual overhead 170,000 160,000 Absorbed overhead (40,000 ? $4) Under-absorbed overhead 10,000 Reason A combination of the reasons in (a) and (b). 10 1 Costing ? Part A Specialist cost and management accounting techniques 5 Marginal costing FAST FORWARD In marginal costing, inventories are valued at variable production cost whereas in absorption costing they are valued at their full production cost.Marginal cost is the cost of one unit of a product/service which could be avoided if that unit were not produced/provided. Contribution is the difference between sales revenue and variable (marginal) cost of sales. Marginal cos ting is an alternative to absorption costing. Only variable costs (marginal costs) are charged as a cost of sales. Fixed costs are treated as period costs and are charged in full against the profit of the period in which they are incurred. Knowledge brought forward from earlier studies Key terms Marginal costing In marginal costing, closing inventories are valued at marginal (variable) production cost whereas, in absorption costing, inventories are valued at their full production cost which includes absorbed fixed production overhead.If the opening and closing inventory levels differ, the profit inform for the accounting period under the two methods of cost accumulation will therefore be different. But in the long run, total profit for a company will be the same whichever is used because, in the long run, total costs will be the same by either method of accounting. Different accounting conventions merely affect the profit of individual periods. Question Absorption and marginal c osting A company makes and sells a single product. At the beginning of period 1, there are no opening inventories of the product, for which the variable production cost is $4 and the sales price $6 per unit.Fixed costs are $2,000 per period, of which $1,500 are fixed production costs. Normal output is 1,500 units per period. In period 1, sales were 1,200 units, production was 1,500 units. In period 2, sales were 1,700 units, production was 1,400 units. Required desexualise profit statements for each period and for the two periods in total using both absorption costing and marginal costing. Answer It is important to notice that although production and sales volumes in each period are different, over the full period, total production equals sales volume. The total cost of sales is the same and therefore the total profit is the same by either method of accounting.Differences in profit in any one period are merely quantify differences which cancel out over a longer period of time. Par t A Specialist cost and management accounting techniques ? 1 Costing 11 (a) Absorption costing. The absorption rate for fixed production overhead is $1,500/1,500 units = $1 per unit. The fully absorbed cost per unit = $(4+1) = $5. $ Sales Production costs uncertain Fixed Add opening inventory b/f slight closing inventory c/f Production cost of sales Under-absorbed o/hd Total costs swinish profit Other costs Net profit (300? $5) (300? $5) power point 1 $ 7,200 $ Period 2 $ 10,200 Total $ $ 17,400 6,000 1,500 7,500 7,500 1,500 6,000 6,000 1,200 (500) 700 5,600 1,400 7,000 1,500 8,500 8,500 100 8,600 1,600 (500) 1,100 1,600 2,900 14,500 1,500 16,000 1,500 14,500 100 14,600 2,800 (1,000) 1,800 (b) Marginal costing The marginal cost per unit = $4. Sales Variable production cost Add opening inventory b/f Less closing inventory c/f Variable prod. cost of sales Contribution Fixed costs Profit Period 1 $ 7,200 6,000 6,000 1,200 4,800 2,400 2,000 400 $ Period 2 $ 10,200 5,600 1,200 6, 800 6,800 3,400 2,000 1,400 $ Total $ 11,600 1,200 12,800 1,200 11,600 5,800 4,000 1,800 $ 17,400 (300? $4) (300? $4) Question Direct labour Direct materials Production overhead Standard production cost per unit 3 hours at $6 per hour 4 kilograms at $7 per kg Variable Fixed Marginal and absorption costing $ 18 28 3 20 69RH makes and sells one product, which has the following standard production cost. Normal output is 16,000 units per annum. Variable selling, distribution and administration costs are 20 per cent of sales value. Fixed selling, distribution and administration costs are $180,000 per annum. There are no units in finished goods inventory at 1 October 20X2. The fixed overhead expenditure is strewing evenly throughout the year. The selling price per unit is $140. Production and sales budgets are as follows. Six calendar months ratiocination Six months remainder 31 expose 20X3 30 September 20X3 Production 8,500 7,000 Sales 7,000 8,000 12 1 Costing ? Part A Specialist co st and management accounting techniquesRequired Prepare profit statements for each of the six-monthly periods, using the following methods of costing. (a) (b) Marginal costing Absorption costing Answer (a) Profit statements for the year ending 30 September 20X3 Marginal costing basis Six months ending 31 March 20X3 $000 $000 Sales at $140 per unit 980 Opening inventory Std. variable prod. cost (at $49 per unit) 416. 5 416. 5 Closing inventory (W1) 73. 5 343 637 Variable selling and so on costs 196 Contribution 441 Fixed costs production (W2) 160 selling and so on 90 250 Net profit 191 Profit statements for the year ending 30 September 20X3 Absorption costing basis Six months ending 31 March 20X3 $000 $000 Sales at $140 per unit 980 Opening inventory Std. cost of prod. at $69 per unit) Closing inventory (W1) (Over-)/under-absorbed overhead (W3) Gross profit Selling and so on costs Variable Fixed Net profit 586. 5 586. 5 103. 5 483. 0 (10. 0) 473 507 196 90 286 221 224 90 314 234 Si x months ending 30 September 20X3 $000 $000 1,120 73. 5 343. 0 416. 5 24. 5 392 728 224 504 160 90 250 254 (b) Six months ending 30 September 20X3 $000 $000 1,120 103. 5 483. 0 586. 5 34. 5 552. 0 20. 0 572 548 Part A Specialist cost and management accounting techniques ? 1 Costing 13 whole kit 1 Opening inventory Production Sales Closing inventory Marginal cost valuation (? $49) Absorption cost valuation (? $69) 2 3 Normal output (16,000 ? 2) Budgeted output Difference ? std. ixed prod. o/hd per unit (Over-)/under-absorbed overhead Six months ending 31 March 20X3 Units 8,500 8,500 7,000 1,500 $73,500 $103,500 Six months ending 30 September 20X3 Units 1,500 7,000 8,500 8,000 500 $24,500 $34,500 Budgeted fixed production o/hd = 16,000 units ? $20 = $320,000 pa = $160,000 per six months Six months ending 31 March 20X3 8,000 units units 8,500 500 units ? $20 ($10,000) Six months ending 30 September 20X3 8,000 units 7,000 units 1,000 units ? $20 $20,000 6 Absorption costing and margin al costing compared FAST FORWARD If opening and closing inventory levels differ profit wrap uped under the two methods will be different.In the long run, total profit will be the same whatever method is used. 6. 1 harmonize the profit figures given by the two methods The difference in profits reported under the two costing systems is due to the different inventory valuation methods used. (a) If inventory levels increase between the beginning and end of a period, absorption costing will report the higher profit because some of the fixed production overhead incurred during the period will be carried forward in closing inventory (which reduces cost of sales) to be set against sales revenue in the following period instead of being written off in full against profit in the period concerned.If inventory levels decrease, absorption costing will report the lower profit because as well as the fixed overhead incurred, fixed production overhead which had been carried forward in opening inven tory is released and is also included in cost of sales. (b) 6. 2 Example Reconciling profits The profits reported for period 1 in the question on page 11 would be reconciled as follows. Marginal costing profit Adjust for fixed overhead in inventory (inventory increase of 300 units ? $1 per unit) Absorption costing profit $ 400 300 700 Exam focus point Remember that if opening inventory values are greater than closing inventory values, marginal costing shows the greater profit. 14 1 Costing ?Part A Specialist cost and management accounting techniques 6. 3 Marginal versus absorption costing reporting to management FAST FORWARD Marginal costing is more useful for decision-making purposes, but absorption costing is needed for financial reporting purposes to comply with accounting standards. We know that the reported profit in any period is likely to differ tally to the costing method used, but does one method provide a more reliable guide to management about the organisations profit po sition? With marginal costing, contribution varies in direct proportion to the volume of units sold. Profits will increase as sales volume rises, by the amount of extra contribution earned.Since fixed cost expenditure does not alter, marginal costing gives an accurate picture of how a firms cash flows and profits are affected by changes in sales volumes. With absorption costing, in contrast, there is no clear relationship between profit and sales volume, and as sales volume rises the total profit will rise by the sum of the gross profit per unit plus the amount of overhead absorbed per unit. Arguably this is a confusing and unsatisfactory method of monitoring profitability. If sales volumes are the same from period to period, marginal costing reports the same profit each period (given no change in prices or costs). In contrast, using absorption costing, profits can vary with the volume of production, even when the volume of sales is constant.Using absorption costing there is therefo re the possibility of manipulating profit, simply by changing output and inventory levels. 6. 4 Example Manipulating profits Gloom Co budgeted to make and sell 10,000 units of its product in 20X1. The selling price is $10 per unit and the variable cost $4 per unit. Fixed production costs were budgeted at $50,000 for the year. The company uses absorption costing and budgeted an absorption rate of $5 per unit. During 20X1, it became unembellished that sales demand would only be 8,000 units. The management, concerned about the apparent effect of the low volume of sales on profits, decided to increase production for the year to 15,000 units.Actual fixed costs were still expected to be $50,000 in spite of the significant increase in production volume. Required Calculate the profit at an actual sales volume of 8,000 units, using the following methods. (a) (b) Absorption costing Marginal costing Explain the difference in profits calculated. reply (a) Absorption costing Sales (8,000 ? $10) Cost of production (15,000 ? $9) Less over-absorbed overhead (5,000 ? $5) $ 135,000 (25,000) (110,000) (30,000) 63,000 33,000 $ 80,000 Closing inventory (7,000 ? $9) Profit Part A Specialist cost and management accounting techniques ? 1 Costing 15 (b) Marginal costing Sales Cost of sales Cost of production (15,000 ? $4) Closing inventory (7,000 ? $4) Contribution Fixed costs Loss $ $ 80,000 0,000 ((28,000) 32,000 48,000 50,000 (2,000) The difference in profits of $35,000 is explained by the difference in the increase in inventory values (7,000 units ? $5 of fixed overhead per unit). With absorption costing, the expected profit will be higher than the original budget of $10,000 (10,000 units ? ($10 9)) simply because $35,000 of fixed overheads will be carried forward in closing inventory values. By producing to absorb overhead rather than to satisfy customers, inventory levels will, of course, increase. Unless this inventory is sold, however, there may come a point when production has to stop and the inventory has to be sold off at lower prices.Marginal costing would report a contribution of $6 per unit, or $48,000 in total for 8,000 units, which fails to cover the fixed costs of $50,000 by $2,000. The argument above is not conclusive, however, because marginal costing is not so useful when sales fluctuate from month to month because of seasonal variations in sales demand, but production per month is held constant in order to arrange for an even flow of output (and thereby prevent the cost of idle resources in periods of low demand and overtime in periods of high demand). Question Absorption v marginal costing A clothing manufacturer makes a specific brand of jeans which it sells at a standard price of $100 per pair. The manufacturers costs are as follows.Standard variable production cost $16 per pair Total fixed production cost per month $240,000 (10,000 pairs are be after to be produced per month) Total fixed non-production costs $300,000 per month In cale ndar month 1, when the opening inventory is 1,000 pairs, production of 10,000 pairs is planned and sales of 8,000 pairs are expected. In Month 2, sales are planned to be 9,000 pairs and production is still 10,000 pairs. Required (a) What would be the net profit for Months 1 and 2 under (i) (ii) (b) Absorption costing Marginal costing What comments could you make about the performance of this business? 16 1 Costing ? Part A Specialist cost and management accounting techniques Answer (a) Absorption standard cost per unit = $16 + 240,000/10,000 = $40 Absorption costing Month 1 Month 2 $000 $000 $000 $000 800 900 Marginal costing Month 1 Month 2 $000 $000 $000 $000 800 900Sales 8,000 $100 Cost of sales Opening inventory (1,000 $40) Production (10,000 $40) Less closing inventory* (3,000 $40) Gross profit Contribution Less other costs Fixed production Fixed non-production 40 400 (120) (320) 480 120 400 (160) (360) 540 1,000 $16 10,000 $16 3,000 $16 16 160 (48) (128) 672 (240) (300) 48 160 (64) (144) 756 (240) (300) (300) 180 (300) 240 (540) 132 (540) 216 * Closing inventory = 1,000 + 10,000 8,000 (b) The absorption costing net profit is higher than the marginal costing net profit in both months because inventories are rising. Under absorption costing, where inventories are increasing, a greater amount of the fixed production cost is carried forward n the closing inventory valuation than was brought forward in the opening inventory valuation. This means that the impact of these costs on profit is delayed under absorption costing. Under marginal costing, the full impact of the fixed production costs on profit is immediate. The business is profitable and sales have increased. However, a build up of inventories in the clothing manufacturing assiduity is unwise as demand is subject to tastes and fashion. The business needs to respond rapidly to changes in demand or it will become rapidly uncompetitive. Part A Specialist cost and management accounting techniques ? 1 Costing 17 Chapter Roundup Costing is the process of determining the costs of products, services or activities.Indirect costs, or overheads, are costs incurred in making a product or providing a service, but which cannot be traced directly to the product or service. Absorption costing is a means of incorporating a fair share of these costs into the cost of a unit of product or service provided. Absorption costing is a traditional approach to dealing with overheads, involving three stages allocation, apportionment and absorption. Apportionment has two stages, general overhead apportionment and service department cost apportionment. After apportionment, overheads are absorbed into products using an appropriate absorption rate based on budgeted costs and budgeted activity levels. Under-/over-absorbed overhead occurs when overheads incurred do not equal overheads absorbed.In marginal costing, inventories are valued at variable production cost whereas in absorption costing they are valued at their full production cost. If opening and closing inventory levels differ profit reported under the two methods will be different. In the long run, total profit will be the same whatever method is used. Marginal costing is more useful for decision-making purposes, but absorption costing is needed for financial reporting purposes to comply with accounting standards. 18 1 Costing ? Part A Specialist cost and management accounting techniques Quick Quiz 1 Here are some terms you should have encountered in your earlier studies. Match the term to the definition.Terms Direct cost Prime cost Overhead Classification by function Fixed cost Variable cost Product cost Avoidable cost Controllable cost Relevant cost Cost centre Cost unit (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) 2 3 Definitions (a) Specific costs of, say, an activity, which would not be incurred if the activity did not exist Total of direct costs Future cash flow which will be changed as the result of a decisi on Product produced by an organisation Dividing costs into production, administration, selling and distribution, research and development and financing costs Cost that can be traced in full to whatever is being costed Organisations departments A cost that varies with the level of output A cost that is incurred in the course of making a product but which cannot be traced directly and in full to the product Cost that is incurred for a particular period of time and which, within certain activity levels, is unaffected by changes in the level of activity Cost identified with goods produced or purchased for resale and initially included in the value of inventory Cost which can be influenced by management decisions and actions is the process of determining the costs of products, activities or services. How is an overhead absorption rate calculated? A B C D Estimated overhead ? actual activity level Estimated overhead ? budgeted activity level Actual overhead ? actual activity level Actual overhead ? budgeted activity level 4 Over absorption means that the overheads charged to the cost of sales are greater than the overheads actually incurred. True False 5Fill in the blanks in the statements about marginal costing and absorption costing below. (a) (b) If inventory levels between the beginning and end of a period, absorption costing will report the higher profit. If inventory levels decrease, costing will report the lower profit. 6 Fill in the following blanks with either marginal or absorption. (a) (b) (c) (d) (e) Using costing, profits can be manipulated simply by changing output and inventory levels. Fixed costs are charged in full against the profit of the period in which they are incurred when costing is used. costing fails to recognise the importance of working to full capacity. costing could be argued to be preferable to costing in management accounting in order to be consistent with the requirements of accounting standards. costing should not be used w hen decision-making information is required. Part A Specialist cost and management accounting techniques ? 1 Costing 19 Answers to Quick Quiz 1 Direct cost Prime cost Overhead Classification by function Fixed cost Variable cost Product cost Avoidable cost Controllable cost Relevant cost Cost centre Cost unit Costing B True (a) (b) (a) (b) (c) (d) (e) Increase Absorption absorption marginal marginal absorption, marginal absorption (f) (b) (i) (e) (j) (h) (k) (a) (l) (c) (g) (d) 2 3 4 5 6 Now try the questions below from the Exam Question Bank act Q1Level Introductory Marks 10 Time 18 mins 20 1 Costing ? Part A Specialist cost and management accounting techniques Activity based costing Topic list 1 Activity based costing 2 Absorption costing versus ABC 3 Merits and criticisms of ABC Syllabus reference A1 (a), (b) A1 (c) A1 (c) Introduction Chapter 2 covers Part A of the syllabus, specialist cost and management accounting techniques. It has been divided into five sub-chapters to refle ct the examiners emphasis that all five techniques are equally important and equally examinable. In this chapter we will be looking at the first alternative method of cost accumulation, activity based costing (ABC).ABC is a modern alternative to absorption costing which attempts to keep down the problems of costing in a modern manufacturing environment. If you want to get free study material of CAT, ACCA, CIMA, CFA, CIA visit freefor911. wordpress. com 21 Study guide Intellectual level A1 (a) (b) (c) Activity based costing Identify appropriate cost device drivers under ABC Calculate costs per driver and per unit using ABC compare ABC and traditional methods of overhead absorption based on production units, labour hours or machine hours 1 2 2 Exam guide There was a question on ABC in the Pilot Paper for F5. It was also examined in June 2008 and June 2010 and is therefore a crucial topic to understand. 1 Activity based costing FAST FORWARD /08, 6/10 An alternative to absorption cos ting is activity based costing (ABC). ABC involves the credit of the factors (cost drivers) which cause the costs of an organisations major activities. Support overheads are charged to products on the basis of their usage of an activity. For costs that vary with production level in the short term, the cost driver will be volume related (labour or machine hours). Overheads that vary with some other activity (and not volume of production) should be traced to products using transaction-based cost drivers such as production runs or number of orders received. 1. 1 Reasons for the development of ABCThe traditional cost accumulation system of absorption costing was developed in a time when most organisations produced only a narrow range of products (so that products underwent similar operations and consumed similar proportions of overheads). And overhead costs were only a very refined fraction of total costs, direct labour and direct material costs accounting for the largest proportion of the costs. The benefits of more accurate systems for overhead allocation would probably have been relatively small. In addition, information processing costs were high. In recent years, however, there has been a dramatic fall in the costs of processing information.And, with the advent of advanced manufacturing technology (AMT), overheads are likely to be far more important and in fact direct labour may account for as little as 5% of a products cost. It therefore now appears difficult to justify the use of direct labour or direct material as the basis for absorbing overheads or to believe that errors made in attributing overheads will not be significant. Many resources are used in non-volume related support activities, (which have increased due to AMT) such as setting-up, production schedule, inspection and data processing. These support activities assist the efficient manufacture of a wide range of products and are not, in general, affected by changes in production volume.They tend to vary in the long term according to the range and complexity of the products manufactured rather than the volume of output. The wider the range and the more complex the products, the more support services will be required. Consider, for example, factory X which produces 10,000 units of one product, the Alpha, and factory Y which produces 1,000 units each of ten slightly different versions of the Alpha. Support activity costs in the factory Y are likely to be a lot higher than in factory X but the factories produce an identical number of units. For example, factory X will only need to set-up once whereas Factory Y will have to set-up the 22 2a Activity based costing ?Part A Specialist cost and management accounting techniques production run at least ten times for the ten different products. Factory Y will therefore incur more set-up costs for the same volume of production. Traditional costing systems, which assume that all products consume all resources in proportion to their production volumes, tend to allocate too great a proportion of overheads to high volume products (which cause relatively little diversity and hence use fewer support services) and too small a proportion of overheads to low volume products (which cause greater diversity and therefore use more support services). Activity based costing (ABC) attempts to stamp down this problem. 1. Definition of ABC Key term Activity based costing (ABC) involves the identification of the factors which cause the costs of an organisations major activities. Support overheads are charged to products on the basis of their usage of the factor causing the overheads. The major ideas behind activity based costing are as follows. (a) (b) (c) Activities cause costs. Activities include ordering, materials handling, machining, assembly, production scheduling and despatching. Producing products creates demand for the activities. Costs are assigned to a product on the basis of the products consumption of the activit ies. 1. 3 Outline of an ABC systemAn ABC system operates as follows. Step 1 Step 2 Key term Identify an organisations major activities. Identify the factors which determine the size of the costs of an activity/cause the costs of an activity. These are known as cost drivers. A cost driver is a factor which causes a change in the cost of an activity. Look at the following examples. Costs Ordering costs Materials handling costs Production scheduling costs Despatching costs Possible cost driver Number of orders Number of production runs Number of production runs Number of despatches Step 3 Step 4 Collect the costs associated with each cost driver into what are known as cost pools.Charge costs to products on the basis of their usage of the activity. A products usage of an activity is measured by the number of the activitys cost driver it generates. Question Which of the following definitions best describes a cost driver? A B C D whatever activity which causes an increase in costs A coll ection of costs associated with a particular activity A cost that varies with production levels Any factor which causes a change in the cost of an activity Cost driver Part A Specialist cost and management accounting techniques ? 2a Activity based costing 23 Answer D Any factor which causes a change in the cost of an activity. Exam focus pointABC is a popular exam topic. Questions on activity based costing a great deal require a comparison with more traditional methods. The implications for the business of each approach is often required. 2 Absorption costing versus ABC 6/08, 6/10 The following example illustrates the point that traditional cost accounting techniques result in a misleading and inequitable division of costs between low-volume and high-volume products, and that ABC can provide a more meaningful allocation of costs. 2. 1 Example Activity based costing Suppose that Cooplan manufactures four products, W, X, Y and Z. Output and cost data for the period just ended are as follows.Number of production runs in the Material cost Direct labour Machine Output units period per unit hours per unit hours per unit $ W 10 2 20 1 1 X 10 2 80 3 3 Y 100 5 20 1 1 80 3 3 Z 100 5 14 Direct labour cost per hour $5 Overhead costs Short run variable costs Set-up costs Expediting and scheduling costs Materials handling costs Required Prepare unit costs for each product using conventional costing and ABC. $ 3,080 10,920 9,100 7,700 30,800 Solution Using a conventional absorption costing approach and an absorption rate for overheads based on either direct labour hours or machine hours, the product costs would be as follows. W $ 200 50 700 950 10 $95 X $ 800 150 2,100 3,050 10 $305 Y $ 2,000 500 7,000 9,500 100 $95 Z $ 8,000 1,500 21,000 30,500 100 $305 Total $ Direct material Direct labour Overheads * Units produced Cost per unit 4,000 * $30,800 ? 440 hours = $70 per direct labour or machine hour. 24 2a Activity based costing ? Part A Specialist cost and management accoun ting techniques Using activity based costing and assuming that the number of production runs is the cost driver for setup costs, expediting and scheduling costs and materials handling costs and that machine hours are the cost driver for short-run variable costs, unit costs would be as follows. W $ 200 50 70 1,560 1,300 1,100 4,280 10 $428 X $ 800 150 210 1,560 1,300 1,100 5,120 10 $512 Y $ 2,000 500 700 3,900 3,250 2,750 13,100 100 $131 Z $ 8,000 1,500 2,100 3,900 3,250 2,750 21,500 100 $215 Total $Direct material Direct labour Short-run variable overheads (W1) Set-up costs (W2) Expediting, scheduling costs (W3) Materials handling costs (W4) Units produced Cost per unit Workings 1 2 3 4 $3,080 ? 440 machine hours = $10,920 ? 14 production runs = $9,100 ? 14 production runs = $7,700 ? 14 production runs = Conventional costing unit cost $ 95 305 95 305 44,000 $7 per machine hour $780 per run $650 per run $550 per run ABC unit cost $ 428 512 131 215 Difference per unit $ + 333 + 207 + 36 90 Difference in total $ +3,330 +2,070 +3,600 9,000 Summary Product W X Y Z (a) (b) The figures suggest that the traditional volume-based absorption costing system is flawed.It underallocates overhead costs to low-volume products (here, W and X) and over-allocates overheads to higher-volume products (here Z in particular). It underallocates overhead costs to smaller-sized products (here W and Y with just one hour of work needed per unit) and over allocates overheads to larger products (here X and particularly Z). 2. 2 ABC versus traditional costing methods Both traditional absorption costing and ABC systems adopt the two stage allocation process. 2. 2. 1 Allocation of overheads ABC establishes separate cost pools for support activities such as despatching. As the costs of these activities are assigned directly to products through cost driver rates, reapportionment of service department costs is avoided. 2. 2. Absorption of overheads The principal difference between the two syst ems is the way in which overheads are absorbed into products. (a) (b) Absorption costing most commonly uses two absorption bases (labour hours and/or machine hours) to charge overheads to products. ABC uses many cost drivers as absorption bases (eg number of orders or despatches). Absorption rates under ABC should therefore be more closely linked to the causes of overhead costs. Part A Specialist cost and management accounting techniques ? 2a Activity based costing 25 2. 3 Cost drivers The principal idea of ABC is to focus attention on what causes costs to increase, ie the cost drivers. a) The costs that vary with production volume, such as power costs, should be traced to products using production volume-related cost drivers, such as direct labour hours or direct machine hours. Overheads which do not vary with output but with some other activity should be traced to products using transaction-based cost drivers, such as number of production runs and number of orders received. (b) Tr aditional costing