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