MGT402 Cost & Management Accounting Assignment No. 01 December 2014

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MGT402 Cost & Management Accounting Assignment No. 01 Fall 2014 Solution & Discussion Last Date December 04, 2014

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Assignment
Hibco & Partners, a Quebec-based public accounting partnership, specializes in audit services. Its jobcosting
system has a single direct-cost category (professional labor) and a single indirect-cost pool
(audit support, which contains all costs of the Audit Support Department). Audit support costs are
allocated to individual jobs using actual professional labor-hours. Hibco & Partners employs 3
professionals to perform audit services. Management of the company has provided different categories
of bonus. It can fixed different level of bonus according to minimum time utilization on job.
The standard time for the completion of a certain job is fixed at 50 hours. Normal wages are paid to the
workers according to time rate, which is Rs.20 per hour. The plan of payment of bonus is as under:
For 1st 10% saving in time 20% of time saved
For next 30% saving in time 40% of time saved
For next 20% saving in time 30% of time saved
For balance 5% of time savedREQUIRED:
1. Compute total earning of Mr. X, Mr. Y and Mr. Z.
2. Mr.X worked 55 hours, Mr.Y worked 40 hours and last Mr. Z worked For 15 hours of
professional labor time. Compute the per hour earning of each of professional using
bonus rate by segregating them into categories. Explain who worked more efficiently.
3. Why the total earning of employee’s job decrease while an employees worked more
efficiently than others (completed task in minimum time).
Note: Provide necessary computations to support your solution
Dear Students!
Download “Article for Assignment No. 1” in the “Downloads” section in your VULMS
account. After reading it, answer the following questions:
a. List down the factors, associated with annual reports, influencing an investor’s decision. (3)
b. Briefly describe the purposes, for which the authors conducted three experiments. (3)
c. Are findings of the authors in consistent with their intended goals? Why and why not? (3)
d. As per the article, how regulatory authorities can ensure de-bias of the information to be produced
by entities? (2)
e. What type of variation, the authors observed in the sample annual reports? (3)
f. List down the manners to present negative number in the annual report as per the authors. (2)
g. As per the article, how internally generated accounting data is transformed into annual report. (2)
h. Conclude the article in your own words appropriately. (2)IMPORTANT:
24 hours extra / grace period after the due date is usually available to overcome uploading
difficulties. This extra time should only be used to meet the emergencies and above
mentioned due dates should always be treated as final to avoid any inconvenience.
IMPORTANT INSTRUCTIONS/ SOLUTION GUIDELINES/ SPECIAL
INSTRUCTIONS
BE NEAT IN YOUR PRESENTATION
OTHER IMPORTANT INSTRUCTIONS:
DEADLINE:
 Make sure to upload the solution file before the due date on VULMS.
 Any submission made via email after the due date will not be accepted.
FORMATTING GUIDELINES:
 Use the font style “Times New Roman” or “Arial” and font size “12”.
 It is advised to compose your document in MS-Word format.
 You may also compose your assignment in Open Office format.
 Use black and blue font colors only.

[Vuhelper]

Question 1
Mr. X
Wages Rate per Hour Rs. 20
Time allowed for the job 50 hours
Time Taken 55 hours
Total Earning 55 x 20 = 1,100.00
Mr. Y
Wages Rate per Hour Rs. 20
Time allowed for the job 50 hours
Time Taken 40 hours
Total Earning 40 x 20 = 8,00.00
Mr. Z
Wages Rate per Hour Rs. 20
Time allowed for the job 50 hours
Time Taken 15 hours
Total Earning 15 x 20 = 300.00
Question 2

Mr. X
Bonus Rate= Time allowed – Actual Time taken x 100
Time Allowed
= 50-55 x 100
50
Bonus Rate= -10%
Gross Earning
Basic Pay 55 x 20 = 1,100
Bonus Pay 1,100x -10% = -110
990
Effective Rate of Earning = 990 /55 hours = Rs. 18
Mr. Y
Bonus Rate= Time allowed – Actual Time taken x 100
Time Allowed
= 50-40 x 100
50
Bonus Rate= 20%
Gross Earning
Basic Pay 40 x 20 = 800
Bonus Pay 800 x 20% = 160
960
Effective Rate of Earning = 960 /40 hours = Rs. 24
Mr. Z
Bonus Rate= Time allowed – Actual Time taken x 100
Time Allowed
= 50-15 x 100
50
Bonus Rate= 70%
Gross Earning
Basic Pay 15 x 20 = 300
Bonus Pay 300x 70% = 210
510
Effective Rate of Earning = 510 /15 hours = Rs. 34
Any body can guide how to use the time rate .

[Vuhelper]

It attributes the job losses to employers increasing prices to deal with the higher wages , which would lower demand and therefore their need more workers as well as to some employers substituting machines or technology for workers due to the higher cost of wages .
But business may respond to a higher and policy research, john Schmitt argues that they can benefit from improved efficiency and lower turnover a higher wages may lead employers to push ,the majority to work harder ,which can be preferable to cutting hours or workers . in fact ,the majority of fast food restaurants in Georgia and Alabama said they would respond to a minimum wages increase with higher performance standards

[Vuhelper]

According to my knowledge my solution is as follow
Total earning of MR X
Working completion hours Mr. X is = 55
But fixed for job only 50hours @ 20
So he will be paid 50x20 = Rs.1000

Total earning of MR Y
Working hours(40) wages 40x20 = 800
His Working hours 40 out of 50hours
Saving in time 10hr out of 50hr so, = 50x40/100= 20% saving of time
First 10% saving hours = 5x04 = Rs.20
For next 10% saving hours = 5x08 = Rs.40
Rs.60
Wages for working hours= 800
Add bonus of Rs. = 60
Total earning of Mr Y = 860

Total earning of MR Z
wages 15hoursx20 = 300
His Working hours 15 out of 50hours
Saving in time 35hr out of 50hr so, = 35x100/50= 70% saving of time
First 10% saving hours = 5x04 = Rs.20
For next 30% saving hours = 15x08 = Rs.120
For next 20% saving hours = 10x06 = Rs.60
For balance (10%)out of 70%=5x01= Rs. 05
Bonus Rs.205
Wages for working hours= 300
Add bonus of Rs. = 205
Total earning of Mr Z = 505