Data Collection

Introduction

First step in statistical approach to a problem is the collection of numerical information i.e. data. Actually data are the raw materials for final statistical conclusions. In statistics , the main resource is the data . To start any statistical work, we need information. These information are data. Generally data can either be quantitative or qualitative . The data, which can be counted in natural way, is known as quantitative data where as the data, which represent some quality of an individual, is known as qualitative data . Generally , all collected phenomena are information and the the process which go through is called data collection .And it is being ready to use , for the purpose of statistical analysis , then it works as a data.

Types of  Data

1. Primary Data

Primary data are those fresh and original data, which are collected and recorded by the investigator or researcher. They are the first hand data. Primary data ate collected for specific purpose of study of the investigator or researcher. The source of this type of data is called primary source.

Methods of collecting Primary Data

1. Direct personal interview method
2. Indirect oral interview method
3. Information through correspondence
4. Mailed questionnaire method
5. Schedule sent through enumerators 

1. Direct personal interview method
In this method, the investigators or researchers meet the respondents personally and asked the necessary question and extract the required data from them. Since the researcher collects the information, the information is accurate , fresh and reliable.
Researcher can collect additional information if he or she needs. This method is effective for small number of respondents.

This method is suitable in the following situations.

• when the area of inquiry is limited
• when the data is to be kept secret
• when pure and original data is needed
• when the personal interviews by the investigator is essential 

Merits

• Information obtained by using this method is generally accurate.
• This is a flexible method in the sense that an investigator can make changes in questions if he or she feel to change
• Investigator can collect other supplementary information related with the study
• The accuracy of data can be verified in the spot since the investigator is being involved in collecting data

Demerits

• It is not useful for the wider area of inquiry
• There is chance of getting biased information
• It is expensive method

Precautions

• investigator must adopt high degree of accuracy and politeness
• personal discretion of the investigator should be avoided
• investigator should be familiar with the locality , language and culture where the data are collected etc.

 2. Indirect oral interview method
     
This method is applied in the situation when the informants hesitate to provide information directly . Information regarding the property , personal habits such as smoking habits, drug addicts, using family planning measures etc. In this method, information can generally be collected with the help of third person who is well known and familiar with the respondents.

It is suitable

• when the direct source of information are not available
• when the informants ate reluctant to give information

Merits

• this method is comparatively economic
• it is convenient way of gathering sensitive information with the help of witness
• it is applicable for wider area of inquiry
• information can e collected in speedy manner if appropriate witness is chosen

Demerits

• it is likely to get inaccurate and unreliable information
• the witness may be biased to provide accurate information.he or she may exaggerate the information
• there will be lack of interest for the witness to provide information about the respondents

Precautions

• the investigator must have confidence in the ability of the informants
• any kind of prejudice on the part of witness should be removed etc

 3. Information through correspondence
         
    This is a correspondence method. In this method, the investigator appoints the correspondence in different places to collect information .The correspondents collect information and send to the central office and finally central office utilizes the data .
This method is more suitable in the field of news media.

Merits

• this method is economic
• the information collected through this method is accurate
• the information from wide area can be easily obtained

Demerits

• information through this method may not be uniform
• it is time-consuming method if there is no facility of communication as telephone, internet etc.

4. Mailed questionnaire method

A set of questions is prepared and is known as questionnaire. The questionnaire is sent to the address of respondents by post. The respondents are requested to answer these questions and return to the investigator. This is suitable for educated informants . If one is interested to obtain the information from the graduates of Tribhuvan   University , Faculty of management , this method will be adopted. The contact address of such students is available in the office of controller of examination.

This method is suitable

• when the respondents are educated
• when the field of investigation is large
• when the address of respondents are available

Merits

• it is very economic method
• this method is suitable for wide sphere area of investigation

Demerits

• there is high degree of non-response error
• informants may feel fear to provide information
• informants may feel the complexity of question

Precautions

• questions should be simple 
• the object of inquiry should be clearly defined
• questions should not affect the personal feelings of informants etc.

5.  Schedule sent through enumerators
         Schedule is a list of questions on which the enumerators have to collect and record information. The enumerators fill it in. In this method, the investigators collect data through trained enumerators. This method is more useful when the informants are illiterate.

Merits

• it is suitable method in wide area of inquiry
• it is an accurate method of data collation
• non-response error will be minimized in this method

Demerits

• this is a time consuming method
• it is expensive method
• there is very few chance of being enumerator biased

Precations

• questions should be simple, clear and precise
• enumerators must be trained properly for the purpose
• enumerators should be capable and efficient etc

Steps followed in collecting Primary Data

1. planning the study
2. preparation of schedules or questionnaire
3. selection of the sample
4. editing the schedules

1.  planning the study
          for proper planning, the attention should be directed to the following points

• reviewing the earlier work
• scope of study
• determination of statistical units
• method of data collection
• units of measurement and degree of accuracy

2. Preparation of schedules or questionnaire
           there are no hard and fast rule for preparing questionnaire . however, the following are certain points which one should keep in mind while preparing questionnaire.

• clarity  = the questions should be clear and simple. the ambiguous and confusing questions are avoided.
• definiteness and objectivity = the questions should be formulated in such a way that they have a definite and objective answer
• numbers and arrangements of questions =  as much as possible,the number of questions should be small and questions should be arranged coherently.

3. selection of the sample
          samples are selected in such a way that they are  supposed to be representative of the whole population. details about the sampling procedure are discussed in sampling chapter.


4.  editing the schedules
         editing is the process of examining errors and omissions in the collected data and making necessary  corrections in the same. after receiving the filled up schedules, one should follow certain preparatiory measures before tabulation and statistical analysis is carried out.


Problems Involved in Collecting Primary Data
      There are various problems that have to be faced while collecting primary data. The nature of problems  depend upon the different situations. Some of the problems are follows

• generally there is lack of time and money while collecting primary data
• there is high degree of non-response error from illiterate respondents
• there may be lack of expertise and trained manpower for preparing questionnaire and collecting primary data.
• there is chance of getting unreliable data in some situations because of biasness of the enumerators.

Secondary Data
        Any data that have been collected earlier for some purpose are secondary data for the individuals who are using them. The data is a primary for those persons or institutions that collect them but the same data become secondary for another. Actually secondary data are the data, which are borrowed from
other who have collected them for some other purpose.

Advantage

• it saves time and cost
• if specially trained persons collect it , the quality of secondary data is better
• the scope of inquiry can be increased in terms of area and time period to  be covered

Disadvantage

• many a times the exact definition of terms and units used  in a secondary data are not known
• when the secondary  data are obtained from two source , it may not be comparable in terms of definitions , units and time period covered
• some information  is often omitted or some categories are pooled

Precaution in using secondary data

Reliability of Data
       The  investigator  should be very careful about the reliability of data. If data are not reliable , even it is treated and interpreted properly it may not give good result. It means that the result may miss guide .

Suitability of Data
       Even if the data are reliable , it should be used after confirming its suitability . It is essential to see whether the collected data are suitable for the purpose of inquiry or not. In this case, the investigator should compare the objectives , nature and scope of the given inquiry with the original investigation.


Adequacy of Data
        Even if the data are reliable and suitable , it is necessary to see whether it is adequate or not for the inquiry. Thus,  in order to arrive at conclusion free from limitations and accuracies, the secondary data must be subjected to through scrutiny and editing before they are accepted for use.


Difference between Primary and Secondary Data

Primary Data

• primary data are original in the sense that they are personally collected by the investigator  involving himself/'herself.
• primary data collection is more expensive and exhaustive
• primary data are collected as per requirement of the investigator
• primary data ma be influenced by personal prejudice of the investigator etc

Secondary Data

• Secondary Data are not original in the sense that they are collected  by some one other than the investigator 
• Secondary Data   are readily available at less expensess
• Secondary Data might have been collected with different objectives
• Secondary Data  may not be influenced by personal prejudice of the investigator etc.

Organizing and Staffing Funtion

Importance of Organizing

1. efficient and effective management
2. facilitates specialization (becest+karan la e sahayog)
3. avoids overlapping and duplication (kam na dohoreyaune)
4. optimum use of human resourece
5. establish authority responsibility relationship
6. basis of co-ordination
7. establishment of channels of communication
8. leads to growth and diversification(bebedhikaran)
9. productivity and job satisfaction

Principle of Organizing

1. unity of objectives
2. specialzation
3. co-cordination
4. authority and responsibility
5. unity of command
6. scalar chain
7. span of control
8. exception (aapbad)
9. efficiency (dchyata)
10. balance 
11. homogeneity
12. continuity
13. simplicity

Approaches to Organizing

1. classical approach
2. behavioral approach
3. contingency approach

Process of Structuring an Organization

1. division of work
2. grouping of work
3. delegation of authority
4. coordination of work

Advantage / Importance of Departmentalization

1. develops specialization
2. administrative control
3. fixed responsibility
4. felling of autonomy (suwayatata)
5. helpful for expansion (bestar)
6. management development

Types of Departmentalization

1. departmentalization  by function
2. departmentalization by product/service
3. departmentalization  by customer
4. departmentalization by territory (chetra)
5. departmentalization by process
6. departmentalization by time

Features of Delegation of Authority

1. no delegation of total authority
2. delegation of only that authority that a manager has
3. representation of the superior (barista pratinidhe)
4. delegation for organizational purpose
5. restoration of delegated authority
6. balance of authority and respnsibility
7. no delegation of responsibility

Advantage of Delegation of Authority

1. minimize work load of mangers
2. benefit of specialization
3. motivation and productivity
4. training and development
5. facilitates growth and expansion
6. quicker and better decision
7. basis of organizing

Barrier of Delegation of Authority

1. reluctant to delegate
2. fear of losing importace
3. lack of control 
4. mutual distrust
5. incompetent subordinates (karmachari ko aasachyamta)
6. lack of motivation 
7. authoritarian tendency (tanasahe prabeti)

Advantage of Centralization

1. facilitates unified decision
2. simple structure
3. facilitates quicker decision
4. economy in operation (kam kharchelo)
5. integration of operation (aakekaran)
6. suitable for small firm

Disadvantage of Centralization

1. unsuitable for large organization
2. manager is over burdened (karya bojh)
3. possibility of power misuse
4. low morale and motivation
5. lack of environmental adaptation (aanukulta)
6. inappropriate for routine decision

Advantage of Decentralization

1. relief to top management
2. facilitates managers development
3. possibility of better decisions
4. effective control
5. high morale and motivation
6. facilitates diversification (bebedhikaran)
7. adaptation of environmental change

Disadvantage of  Decentralization

1. increase in expenditure
2. conflict 
3. unsuitable for emergency situations
4. maximizes risk
5. difficulty in communication
6. unsuitable for specialized services

Forms of Organization Structure

1. Line Organization Structure

Advantage

• simple
• quick decision and implementation
• maintain discipline
• fixed responsibility
• flexibility
• effective management
• economical (metbyaeta)

Disadvantage

• overload on managers
• lack of specialization
• autocratic leadership
• problems of coordination
• inefficiency
• lack of stability
• unsuitable in present day environment

2. Functional Organization Structure 

Advantage of

• benefits of specialist
• healthy competition among experts
• increase efficiency
• relief to executive
• mass production
• helps in growth and expansion
• suitable for present situation

 Disadvantage of

• multiple command system
• lack of coordination
• high administrative cost
• delay in decision making
• spoils human relations
• narrow outlook of specialists
• shifting responsibility

3 Line and Staff Organization

Advantage

• managerial specialization
• better coordination
• limited functional authority
• practical decision
• facilitates growth
• better utilization of resources
• greater flexibility

Disadvantage

• problem of confilct
• greater confusion
• high cost structure
• over-dependence on staff
• inefficient staff
• lack of responsibility
• complication for management

4. Matrix Organization Structure

Advantages

• better coordination and control
• adaptable to dynamic environment
• maximum use of resources
• participative management
• sufficient time to top management
• development of teamwork 

Disadvantage

• costly structure
• problem of over-specialization
• difficult to balance
• feeling of insecurity
• lack of coordination
• lack of commitment

5. Committee Organization Structure

Advantage

• quality decision
• setting objectives,plans and policies
• participative management
• reduces bias and conflict (pachya pat)
• dealing with complex problems
• commitment to implement (karyanowyan)
• pooling authorities (aadhekari ko jamghat)

Disadvange

• creating conflict
• delay in decision
• probability of diversion (besaya paribartan)
• tendency of shifting (panchaune prabeti)
• lack of secrecy
• splits accountability (jawaf dehita ma bevajan)

Features of Coordination

1. management function
2. continuous function
3. managerial responsibility
4. group effort
5. unity of action
6. influences individual (byakti lie pravab)
7. concentration on common purpose

Elements / Principles of Good Coordination

1. simplified organization 
2. well defined goals , responsibility and authority
3. harmonized programs and policies
4. direct contact 
5. early start
6. well designed communication system
7. reciprocal relationship (parsparik)
8. effective leadership and supervision

 Propose of Coordination

1. to reconcile goals (aakekaran)
2. to maintain efficiency and economy
3. to maintain good human relation
4. to develop team spirit
5. to mange diversified activities (farak gatibedi)
6. to minimize employees turnover (gager chordne)

 Importance of Coordination

1. survival of organization
2. unity of action
3. development of efficiency (pravabkarita )
4. proper use of resources
5. intregation of goals (aakekaran)
6. encourage good personal relation
7. basis of managerial function
8. accomplishment of objective

Emerging Concepts in Organizing

1. re-engineering process
2. team work
3. network organization structure
4. downsizing organization
5. boundary less organization

Human Resource Management System

1. Input
2. Processing

• acquisition (prapati)
• development 
• motivation
• maintenance (aanurachyan)

     3. Input


Objectives of Staffing

1. goal achivement
2. maximum utilization of resources
3. development of team sprit among the employee
4. human objectives
5. employee discipline and moral
6. joint management
7. productivity improvement

 Importance of Staffing

1. goal achivement
2. productivity improvement
3. improve human relation
4. human resource planning
5. face competition
6. implementation of organizational  strategies
7. increase employee satisfaction
8. change management

Components of Staffing

1. manpower planning
2. recruitment (varna)
3. selection
4. placement
5. socialization 
6. training and development
7. performance appraisal (mulyankan)
8. transfer, promotion and demotion

Motivation

Features / Nature of Motivation

1. psychological process
2. continuous process
3. pervasive function (sarba byapi)
4. complex and unpredictable
5. goal-oriented
6. behaviour
7. positive or negative

Importance of Motivation

1. healthy industrial relation
2. productivity improvement
3. willingness for work
4. determinant of job performance
5. readiness for the change
6. utilization of factors of production
7. environment of co-operation
8. organizational effectiveness

Theories of Motivation

1. needs hierarchy theory
2. physiological needs
3. security needs
4. social needs
5. esteem needs (aham)
6. self actualization needs
7. two factor theory
8. hygiene factors
9. motivating factor

Essentials of Effective Reward  (besesta)

1. satisfy needs
2. effort reward relation
3. equitable 
4. cost effective
5. variety of reward and methods

Techniques and Types of Employee Motivation

1. positive motivation
2. negative motivation
3. extrinsic motivation (bahya )
4. intrinsic motivation (aantarik)
5. financial motivation
6. non-financial motivation
7. individual motivantion
8. group motivation

Motivation Through Employee Praticipation

• Quality of work life

1. quality circle
2. share ownership
3. flexible work schedule

• Self Managed Work Team

Reward System to Motivate Performance

1. extrinsic and interinsic reward (antarik ra bahia)
2. financial and non-financial reward

Communication

Characteristics of Communication

1. minimum two persons
2. two way process
3. pervasive function
4. complete and rational process
5. continuous function
6. oral or written
7. formal or informal
8. basis of action and coordination

Importance of Communication

1. planning and co-ordination
2. successful operation of business
3. prompt decisions and implementation
4. maximum production ta lower cost
5. moral increase

Structure Of  Communication

1. downward communication
2. upward communication
3. two-way communication
4. horizontal and diagonal communication

 
Communication Network

1.  wheel network
2. chain network
3. circle network
4. all channel network

Process of Communication

1. sender
2. encoding (sanketic)
3. message
4. medium
5. receiver
6. decoding (anubad)
7. feedback
8. noise

Types of Communication

1. formal  Communication

• downward Communication

• upward Communication

• sideward Communication

1. informal Communication
2. interpersonal Communication
3. oral Communication
4. written Communication
5. non-verbal Communication

Barriers to Effective Communication

Organizational Barriers

1. organizational policy
2. organizational rules and regulation
3. lengthy scalar chain
4. one-way communication system
5. lack of confidence in subordinates (sahayogi)

 Physical Barriers

1. physical distance
2. hierarchy structure
3. office design
4. noise

Psychological Barriers

1. distrust of communicator (aa biswos)
2. superiority complex
3. individual perception (buzai)
4. premature evaluation (aa paripakka)
5. no attention

Semantic Barriers

1. harsh language ( kharo)
2. vague language (aspasta )
3. misleading translation
4. technical language

Technological Barriers

1. mechanical barriers
2. loss of transmission
3. information overload
4. insufficient period allowed

Enhancing Effective Communication

1. effective listening
2. utilizing feedback
3. regulating information flow
4. two-way communication
5. simplifying language
6. avoid information overload
7. create an environment of trust and confidence
8. reduce psychological barriers

Control and Quality management

Characteristics of control

1. management function
2. pervasive (huge) function
3. continuous process
4. dynamic process
5. forward looking
6. measurement and comparison
7. corrective action

Process of Control

1. establishment of standard 
2. measuring actual performance
3. comparison of actual performance with standards
4. analyze the causes of deviation (farak)
5. taking corrective action

Types of Control system

1. pre-control
2. concurrent control
3. post control

Importance of Controlling

1. execution of plan
2. improve efficiency
3. basis of future action
4. aid to decentralization
5. morale checks on employee
6. means of co-ordination
7. effective supervision
8. maximize productivity

Purposes / Objectives of Controlling

1. location of deviation
2. study the causes of deviation
3. taking necessary measutes
4. to prevent causes of deviation
5. reduce cost and maximize profit
6. to maintain discipline
7. helps to maintain coordination

Characteristics of an Effective Control system

1. link with planning
2. simplicity
3. timeliness
4. economical 
5. user-friendly
6. capable to communicate
7. suggestive
8. flexibility
9. corrective action
10. forward-looking

Problem with Control system

1. over control 
2. inappropriate focus
3. reward for inefficiency
4. maximum accountability
5. coordination problem

Types of Budget

a. Financial Budget

1. cash budget
2. capital expenditure budget
3. balance sheet budget

b. Operating Budget

1. sales or revenue budget
2. expense budget
3. profit budget

c. Non-Monetary Budget

1. labor budget
2. space budget
3. production budget

Factors affecting Quality

1. policy
2. information
3. engineering and design
4. materials
5. equipment
6. people

Financial Control

a. Financial statement

1. income statement
2. balance sheet
3. cash flow
4. financial ratios

b. Auditing

1.  internal audit
2. external audit
3. management audit

Tools For TQM

1. benchmarking
2. outsourcing
3. speed
4. ISO 9000
5. statistical quality control  

Principles of Deming Management

1.  quality improvement drives the entire economy
2. the customer always comes first
3. do not blame the person fix the system
4. plan-do-check-act

Deming Quality management Techniques

1. create constancy purpose
2. adopt the new philosophy
3. cease dependence on mass inspection
4. end the practice of awarding business on price tag alone
5. seek continuous improvement
6. institute modem methods of training on the job
7. institute leadership
8. drive out fear
9. eliminate slogans and targets
10. eliminate numerical quotas
11. remove barriers to pride of workmanship
12. take action to accomplish transformation

Global context of management

   Nature of globalization

1. Intergration
2. open market economy
3. modem communication and transportation
4. international operations
5. formation of multiple unit
6. Advanced technology 

Forms of Globalization

1. economic globalization
2. political  globalization
3. cultural  globalization
4. environmental  globalization

Methods of Globalization

1. exporting
2. licensing and franchising
3. direct investment
4. joint venture
5. mergers and acquisitions 
6. management contract 
7. strategic alliance 
8. assembly operation     

Changing global business scenario

1. globalized production
2. global outsourcing
3. move towards service sectors 
4. global corporations
5. global competition
6. rapid technological  development

Effect of Globalization
   Positive effects

1. maximizes productivity
2. develops living standard
3. transfer of capital and technology
4. increase in employment
5. elimination of trade barriers
6. promote international co-operation
7. support for industrialzation

Negative effects

1. displacement of local industries
2. creates threats to social and cultural value
3. economic exploitation
4. deterioration of national sovereighty
5. unequal distribution of income
6. initiates monopoly power
7. increases competition

Characteristics of Multinational company

1. large scale operation
2. advanced technology
3. international opration
4. efficient management
5. ownership and control 
6. productive organization
7. monopolistic market

Advantage of Multinational company

1. huge capacity and modern technology
2. mass and qualitative products
3. efficient management
4. minimum cost of production
5. research and development
6. employment  opportunities
7. maximize government revenue
8. maintain balance in trade
9. international cooperation 

Disadvantage

1. displacement of local industries
2. outflow of capital
3. economic exploitation
4. consumer exploitation
5. inequality to staff
6. influence in politics
7. social inequality 

Management Problems of Major Idustries in nepal

1. policy related problems
2. demand related  problems
3. human resource problems
4. capital and technological problems
5. infrastructural problems
6. labor union problems
7. raw material problems
8. lack of mutual trust
9. security problems

service costing

                            CANTEEN COSTING
particulars                                       amt
wage n salary
1.manager salary
2.cook salary
3.helper salary

provisions
1.all foods items
2.cnosumable stores
3.table lineer
4.cutlery
5.crockery
6.cleans

services
1.gas ,water, electricity

other
1.depn
2.rent
3.mis expenses

total cost
less: subsidy
net cost
Add/less: profit/loss
sales revenue



                                      Hospital costing

 particular                           amt
fixed cost
general administration exp.
doctor's salary
salary of nurses
total fixed cost (A)

variable cost
dispensary exp.
expenses for foods
cost of oxygen, pathology,x-ray
total variable cost
total cost (A+B)
profit
revenue



                           Transport Costing

paritcular                             amt
fixed cost
driver's salary
route license and garage rent
depn
insurance
tax
general exp.
total fixed cost (A)

variable cost
repair n maintenance
fuel cost,oil cost
raw n material
lubricating
total variable cost (B)
total cost (A+B)

                                    Value Added statement
                                      for the period of.......
       particulars                                                     Amt             Amt
 sales  revenue                                                                          ***
Add: closing stock:FG
                            WIP
                            RM                                         ***
Less: opening stock:FG
                              WIP
                               RM                                      ***                  ***
Add: Other income                                                                      ***
Value of output                                                                             ***
Less: cost of bought material & services:
Raw materials , carriage                                        ***
power & fuel , fright                                              ***
manufacturing o/h                                                  ***
admin exp.                                                             ***
selling exp.                                                             ***                  ***

Value Added:                                                                                  ***
Applied as follows
1. salary & wage, man power cost, bonous
  provident fund
2. income tax, wealth tax
3. interest ,dividend
4. depreciation ,
  Retained profit / net profit
Value added



                                       A  B  C

calculation of total cost n cost per unit under conventional costing

Details                     a           b          
direct material          **        **
direct labour            **         **
overhead                 **         **
total cost
cost per unit

calculation of cost driver rate

Cost pool        Overhead      Cost driver      Volume of acativity      CDR



Distribution of overhead

Cost pool      CDR      Prod.          Prod.
                                 vol.   cost      vol.    cost




COST POOL                           COST DRIVER
1. material procurement         no. of order/ purchase /no. of procurment
2. store receiving                   no. of requisition raised
3. material holding &dispatch  no. of movement / on. of machine handled/
no.of order excuted / no. of component qty
4. setup /schedulding cost      no. of setup/ no. of prodn run
5.customer order processing   no. of order/ no. of customer/
no. of customer visit
6. repair n maintenance cost    machine hour/ repair hour

            PROCESS COSTING


inter process profit

particulars                      total     cost    profit          particulars      total    cost   profit
to opening stock                                                    by process a/c
to direct material
to direct wage
total
less:closing stock
prime cost
factory o/h
total cost
add: profit on transfer price
total


                finish stock a/c
particulars                    total   cost    profit     particulars    total   cost   profit
to process a/c                                               by sales
to opening stock
cost of goods avail.sale
less:closing stock
cost of goods sold
to gross profit



                                 Contract Accout
particulars                  amt        particulars                    amt
to material                             by material at site
to wage                                 by material return to store
to other indirect exp.              by plant
to plant                                    depn.
to gain on sale                        by p&L a/c (plant)
to notional profit                     by sale  (plant)
                                              by loss on material
                                              by WIP
                                              work certefied
                                               work uncertefied
to P/L a/c                       
(np * 2/3 * CR/WC)                by notional profit
to reserve                               



                       OVERHEAD

              Distribution overhead

items             basis of apportionment   total     prod. dept.      service dept.
all direct exp.                                                     --------             ***
power               H.P. * M. H.



                  ACCOUNTING FOR LABOUR

1. Halsey plan
      total earning = (T.T * T. R.) +1/2 (T.S *T.R)
 TS=time saved

2. Rowan plan

total earning = (T.T * T.R) + (T.S/S.D *T.T *T.R)
SD = standard time

3.Taylors differentail piece rate system
low piece rate = output * low rate 80%
high piece rate = output * high rate 120%

4. Gantts task bonus scheme
earning = standard time * time rate
equal to standard
earning = T.T * T. R + 20% Bonus
Above standard
earning = prodn * high piece rate
prodn * S. piece rate + 20% S. piece rate

Effective rate = total wage /time taken



         INVENTORY MANAGEMEN

              ----------
EOQ = /  2AO/C
A= annual requirement
O= odering cost per order
C= carrying cost per unit

Total ordering cost = A/Q *O
A= annual requirement
O= odering cost per order
Q= QTY

Total carrying cost = Q/2 *C
Q= QTY
C= carrying cost per unit

Total cost
total ordering cost + total carrying cost

Calculation of EOQ  by using trial and erros
no. of order(n)
QTY(Q)
Average qty(Q/2)
carrying cost(Q/2 *C)
ordering cost (n * O)
on the basis above calculation ordering cost & carrying cost are equal in.... kgs

Standard Costing

                       Standard   Costing

             Multi material variance working Table

SN.                 QTY           MIX        PRICE           RESULT
A                      S:900         S:30              S: 3             SQ * SP ( 170/70 *900)
                                              40                 2
B                      A:920         S:30              S:3               AQ * SP (170/70 *920)
                                              4                   2
C                      A:920         A:200            S:3                AQ * SP (800/300 *920)
                                              100                2
D                      A:920         A:200             A:4                AQ * AP (1400/300 *920)
                                                100               6
Variance
1. material yield variance   = A - B
2. material mix variance     = B -C
3. material usage variance  = A-C
4.material cost variance     = A-D



                Multi labour with no idle time working table
SN.           Time           Mix            Rate               Result
A.              S:                 S:              S:                   ST * SR
B.              A:                 S:              S:                   AT * SR
C.              A:                A:              S:                    AT * SR
D.              A:                A:              A:                    AT * AR

Variance
1 labour yield variance        = A - B
2 labour mix variance          = B - C
3 labour efficiency variance = A - C
4 labour rate variance         = C - D
5 labour cost variance        =  A - D



          Multi labour with idle time working table
SN.              TIME          MIX         RATE          RESULT
A                    S:                S:               S                 ST *SR
B                    A/W            S:               S                 AW * SR
C                    A/W           A:               S                  AW * SR
D                    A/P             A:               S                  A/P * SR
E                     A/P             A:               A                 A/P * AR

idle time = AP- A/W

Variance
1 Labour yield variance             = A-B
2 Labour mix variance               = B-C
3 Labour net efficiency variance = A-C
4 Labour idle time variance        = C-D
5 Labour gross efficiency variance= A-D
6 Labour rate variance                 = D-E
7 Labour cost variance                 = A-E

account

                                        Variable Costing

                 Particulars                                 
sales revenue   (sppu * sales unit)                      
less: variable cost of sales
Direct material ( rate * prodn)
Direct labour (rate * prodn)
Variable cost of production
Add : Opening stock (rate * opening stock)
Variable cost of prodn available for sale
Less : Closing stock ( rate * closing )
Variable cost of good sale
Add : variable selling ( rate * sales)
Contribution margin
Less : fixed cost
fixed manufacturing overhead
fixed selling & adminstration overhead
Net profit before Tax


                             Absorbtion Costing
               
                    particular
Sales revenue  (sppu * sales units)
less : Cost of goods sold
Direct material ( rate * prodn)
Direct labour ( rate * prodn)
Variable manufactring overhead (rate * prodn )
Fixed manufactring overhead (sFor  * prodn)
Cost of production
Add : Opening stock ( rate * opening)
Cost of goods available for sale
Less : Closing stock (rate * closing)
Cost of goods sold unadjusted
Add/less : under applied / over applied
Cost of goods sold adjusted
Gross margin
Less : non mfg exp.
Variable selling (rate * sale )
Fixed selling & admin
Net profit before Tax

SFOR = Fixed mfg. overhead/normal capacity



Cost - Volume - Profit analysis


PV Ratio = Different in Profit / Different in SR

CMPU = SPPU - VCPU

CM = SR - VC

CM ratio / PV ratio =  CMPU/SPPU   , 1-VCPU/SPPU  ,  CM/SR

Cost Volume ratio = Different in cost / Different in sales revenue

FC = PV ratio * SR -Profit

BEP (units) = FC / CMPU

BEP (RS) = FC / CM ratio

Required sales for desired profit before tax (Rs)
       = FC+DP/CM ratio

Required sale for desired profit after tax ( Rs)
      =  FC+DPAT/1-TAX
          --------------------
               CM Ratio

Required sales for fixed peresntage of sale revenue
        =  FC / CMPU - PPU

Required sales for desired profit before tax (Unit)
     = FC + DP/ CMPU

Required sale for desired profit after tax(Unit)
       =  FC + DPAT/1-TAX
           ---------------------
              CMPU

  Margin of safty ( MOS )
    MOS = Total sales - BEP sales
    CMPU =  Profit / MOS units
   CM Ratio /PV ratio =  Profit / MOS in Rs.



                       Flexible Bubget

                     Formula Method

Details                       Cost Behavior            FC                    VCPU
Direct material                   VC                                                ***
Direct labour                      VC                                                ***
supervision                          SVC               ***                       ***
depreciation                        FC                  ***                      
Total                                                           ***                        ***

     BA = FC + VCPU * Level of activity


                     Table Method

Details                                           level of output
Variable cost                       *** units            *** units
Direct material                    ***                     ***
supervision                          ***                    ***
total variable cost  (a)

Fixed cost
supervision                           ***                     ***
Depreciation                         ***                     ***
total FC (b)
total cost ( a + b )


                             Flexible Budget
                              amount of profit *** units
        particulars                                                      amount
sales revenue                                                          ***
less: Variable cost of sales
Direct labour                                                        
Direct material cost
Direct expenses
Total variable cost    (a)
less: Fixed cost
Admin. cost
selling & distribution overhead
Total fixed cost     (b)
Total cost           (a +b)
net profit  ( sales revenue - total cost)



              Overhead Variance Working Table

SN.             QTY (hour)        RATE            F.MFG.O/h            Result
A                  standard            S F o/h             nil                         SQ * SOR
                                                 V o/h
B                   actual                S. V.              + F. MFG                 FMFG + SQ * SVOR
C                   actual                S.V.               +F.  MFG                 FMFG + AQ * SVOR
D                   actual                A.V                +F. MFG                 actual expenses incured

variance
1. capacity variance   = A-B
2. efficiency variance  = B-C
3. spending variance   = C-D

             Where, SOR = standard o/h rete
                          SQ   = standard Qty
                       SVOR = standard variable o/h rate

 

Price and income effect

 Types of price effect

1. pcc is horizental :-price of x-goods changed but y-goods is constant

2. pcc is upward sloping :- x and y goods are complymentry

3. pcc is backward slopping :- if one goods is inferior

 Income effect

Types of Income effect         

normal goods

inferior goods

neutral goods

Fiscal and Monetary Policy

     Objectives of the monetary policy in developing countries
1. Development of Financial Institutions
2. Interest rate control
3. Debt / Loan Management
4. Credit (sakha) Control
5. Price Control
6. Increase in national income
7. Foreign Exchange rate stability

    Objectives  of Monetary policy
1. Neutrality of Money (mudra ko tathasta+ta)
2. Price stability
3. Exchange stability
4. Full Employment
5.Economic growth

           Significance and Objectives of Fiscal Policy
1. Capital formulation
2. Resource mobilisation
3. Price stability
4. Reduction in economic inequality
5. Promote employment opportunities
6. Economic stability
7. Correct adverse balance of payments
(praticul bhukatani santulan sachauna)

   Monetary policy used to solve the problems of depression
1. Decrease in Bank rate
2. Purchase government securities by central bank
3. Decrease in rate of interest
4. Expansion in credit ( sakha bestar)

  

Trade Cycle

     Different Phases of trade cycle
 1. Depression ( arthik mandi)
 2. Recovery
 3. Prosperity (samunnati)
 4. Boom
 5. Recession (susti)

Theory of employment and multiplier

     Say 's Law of Market
"Supply always creates its own demand "
     
        Implications of Say's law
1. Self-adjusting economy
2. No general over-production
3. No general unemployment
4. Wage-cut creates full employment
5. It pays society to employ the unemployment resources

     






       Leakage of Multiplier theory
1. Saving
2. Liquidity (taralta)
3. Time lag (antar)
4. Purchase of bond
5. Loan payments
6. Price rise
7. Taxation

          Operation / Limitations of multiplier
1. Regular investment
2. No change in MPC
3. Availability of consumer goods
4. Existence of closed economy
5. Existence of less then full employment
6. Constant price level
7. Existence of industrialised  economy

               here, K = multiplier  , y = Income  , I = investment  ,*y = change in income   ,
                         *I = change in investment
          We know that,        
           y = c + I  .........eq(1)
           c = a + by .........eq(2)
in the given eqn 1 and 2 let the change in consumption by *c , investment by *I and income by *y then eqn1 and 2 become
          y + *y = c + *c + I + *I   ........eq3
          c + *c = a + b ( y + *y)
          or c + *c = a + by + *y   ...........eq4
  subtract eqn 1 form eqn 3 and eqn 2 form eqn 4
          y + *y - y = c + *c + I +*I - c -I
           *y = *c + *I   ..........5
      now,     c + *c - c = a + by + b *y - a - by
            *c = b*y
  substitute the value of *c in eqn5
     *y = b*y - *I
     *y - b*y = *I
     *y (1-b) = 1/ (1-b)
      K = 1/ 1-mpc        where b = mpc
       K = 1/ mps

    Table of  Multiplier 
  MPC               K= 1/1-MPC
    0                         1
    0.25                    1.33
    0.50                    2
    0.75                    4
     1                        &

                                           

    Criticisms of Say's Law and Classical Theory of Employment
1. Supply does not create its own demand
2. Wage-cut will not cure unemployment
3. No perfect competition in the real world
4. Long -run is not important
5. Need to state intervention (hasthachep)
6. Economy is not self-adjusting
7. Assumption of full employment is unrealistic
8. Money is also demanded for speculative(sattapagi) motive

 

              Assumption of Keynes Theory of Employment
1. Short-run
2. Perfect competition
3. Law of diminishing returns
4. Closed economy
5. Aggregate concept
     Principle of effective demand

    Weakness of Keynes theory
1. Incomplete treatment of unemployment
2. Assumption of full employment
3. Relationship between effective demand and volume of employment
4. Too much aggregative
5. Short-run concept
6. Wage and employment

     
      Keynes theory of employment superior to Classical theory
1. Realistic and practical approach
2. Dynamic Theory
3. Support of state Interference (sarkari hastachep ko samarthan)
4. An importance place to fiscal policy (beteya neti)  in place of monetary policy(maudric neti)
5. Opposes(aabarodh) wage reduction(rass)  policy

Loanable Fund & Liquidity preference

According to J.M.Kens " Interest is the reward paid for parting which liquidity for a specific time."
   Motive for Liquidity / Demand for money
1. karobar motive
2.  purba+satarkata motive
3. sattabagi motive
 
Criticisms of Liquidity preference theory
1. Ignored real factors
2. No liquidity without saving
3. Desire for liquidity
4. Use of the term liquidity
5. Short term concept

 Loanable funds theory of interest
   SUPPLY of loanable funds
1. Savings
2. Discarding(aachanchay)
3. Bank money
4. Disinvestment
     DEMAND
1. Investment demand
2. Consumption demand
3. Demand for hoarding(chanchay)                                                                                                                                                                                                                                                                                                  Equilibrium between demand for and supply of loanable funds             

           
 

Criticism of Indifference curve & consumer equilibrium

Criticisms of   Indifference curve
 1. Tells nothing new
 2. Not easy to indicate the preference
 3. Complexity
 4. Unrealistic assumption of economic rationality
 5. Limited empirical ( prayog shedha) nature                                                                                                6.   Relation to Transivity ( paribartaneya sambandha)

 
 

Demant / Elasticity of demand

Imp / Use of  Demand Analysis
1. Maximize profit
2. Know consumer's and producers goods
3. Show the relationship between demand and revenue
4. Production decision
5. Financial decision
6. Increase demand
7. Sales forecasting and profit calculation

Determinant of  Demand
1. Change in price
2. Change in income
3. Change in taste
4. Change in price of related goods
5. Size of population
6. Weather and climate
7. Government

Imp / Use of Income elasticity
1. Estimination of  demand for goods the long-run
2. Know the change in business activities
3. Know the market activities

Imp / Use of  Price elasticity
1. Price determination
2. Determination of tax
3. Monopoly price
4. Pricing of factor of production
5. Wage determination
6. Determination of rate of foreign exchange
7. Formulation of economic policies

 Imp / Use of Cross elasticity
1. Know the effect
2. Know the price
3. Know the complementary and substitutes goods
4. Determination of limitation

Types /map of otal outlay method

price             Demand         Total cost        Elasticity of Demand
10                  10                     100
9                    20                     180
8                    30                     240
7                    40                     280            Elasticity of demand Greater than  unity, Eq > 1
6                    50                     300
5                    60                     300            Elasticity of demand Equal to unity, Eq = 1                                  
4                    70                     280                                                                                                               3                    80                     240            Elasticity of demand less than unity, Eq < 1