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ACCA F2

Management Accounting (MA)

管理会计

ACCA Lecturer: Belinda Qiu

Copyright © ACCAspace.com ACCAspace 中国ACCA特许公认会计师教育平台 2

Part B Accounting for Material

1. Process relating to material

2. Physical inventory and book inventory

3. FIFO, LIFO, weighted average

4. Holding cost, ordering cost

5. EOQ

6. EBQ

7. Re-order level, Maximum level, Minimum level

8. Material inventory account


Part B Accounting for labor

1. Direct and indirect labor cost

2. Remuneration methods

3. Labor turnover

4. Labor efficiency, capacity and production volume ratios

5. Labor account



1. Direct and indirect labor cost

1.1 Direct and indirect workers

-Direct workers: employees who are directly involved in making an

organization’s products.

-Indirect workers: employees who aren’t directly involved in making

an organization’s products.(maintenance staff & factory

supervisors)

Idle time: when workers are paid but not making any products, for

Example when a machine breaks down.



1.2 Direct and indirect labor cost

Overtime premium: time in excess of the basic hours for a period

Bonus payment: a payment in addition to a basic salary or wage and

is paid for either achieving or exceeding certain targets.

Direct workers Indirect workers

Basic pay Normal work Direct General Indirect

Idle time, training, etc.

Indirect For specific jobs

Direct

Overtime premium

General Indirect General Indirect

For specific jobs

Direct

For specific jobs

Direct

Bonus, sick pay, social contributions

Indirect

Indirect



2. Remuneration methods

2.1 Time-based system

Total wages=(hours worked*basic rate of pay per hour)+(overtime

hours worked*overtime premium per hour)

2.2 Piecework system

Wages = Units produced * Rate of pay per unit



3. Labor turnover

3.1 Labor turnover is the rate at which employees leave a company

and this rate should be kept as low as possible.



3.2 Cause of labor turnover

-avoidable:

Poor remuneration

Poor working conditions

Lack of training opportunities

Lack of promotion prospects

Poor relationship

-unavoidable:

Retirement

Illness/death

Family reasons

Relocation



3.3 Cost of labor turnover

-replacement cost:



-Preventative cost:



3.4 Individual and group bonus schemes

3.4.1 Individual bonus scheme



3.4.2 Group bonus scheme:



4. Labor efficiency, capacity and production volume ratios

Actual output*standard hours per unit

Budgeted output*standard hours per unit



Example:

Standard time allowed per unit: 30 min

Actual output in period: 840 units

Actual hours worked: 410 hours

Budget hours worked: 400 hours

Labor efficiency ratio=

840∗0.5

410= 102%

Labor capacity ratio=410

400= 102.5%

Labor production ratio=840∗0.5

400= 105%



5. Labor account- expense





Q1.

D

A



Q2.

A



Q3.

B

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Documents

ACCAspaceaccaspace.com/.../F2_Chapter_08_Accounting_for_Labour.pdf · 2016-01-01 · ACCA F2 Management ... Total wages=(hours worked*basic rate of pay per hour)+(overtime hours worked*overtime

ACCAspaceaccaspace.com/.../F2_Chapter_08_Accounting_for_Labour.pdf · 2016-01-01 · ACCA F2 Management ... Total wages=(hours workedbasic rate of pay per hour)+(overtime hours workedovertime