About Me

PhD, NET(UGC), MBA (Finance), M.com (Finance), B.COM (professional), B.Ed (Commerce + English), DIM, PGDIM, PGDIFM, NIIT Accounting package...

Wednesday, February 16, 2011

book for companies secretaries practice....in question form..must read b.com(prof) 2nd yr

specially for secretarial duties regarding to for forfeitures of shares,surrenders of shares  


http://books.google.co.in/books?id=pWu8pr0opEcC&pg=PA181&lpg=PA181&dq=secretarial+duties+regarding+forfeiture+of+share&source=bl&ots=KiBq3YvW5h&sig=HFIkwdkbiC5SVaf61PCUQE6BuOg&hl=en&ei=9YpbTYDnNon5ceGVpeEK&sa=X&oi=book_result&ct=result&resnum=2&ved=0CBsQ6AEwAQ#v=onepage&q=secretarial%20duties%20regarding%20forfeiture%20of%20share&f=false

Saturday, February 5, 2011

minutes sample

Sample of Board Meeting Minutes
Name of Organization
(Board Meeting Minutes: Month Day, Year)
(time and location)


Board Members:Present: Bhata Bhatacharia, Jon White Bear, Douglas Carver, Elizabeth Drucker, Pat Kyumoto, Jack Porter, Mary Rifkin and Leslie Zevon
Absent: Melissa Johnson
Quorum present? Yes

Others Present:
Exec. Director: Sheila Swanson
Other: Susan Johns, Consulting Accountant

Proceedings:
· Meeting called to order at 7:00 p.m. by Chair, Elizabeth Drucker
· (Last month's) meeting minutes were amended and approved

· Chief Executive's Report:
- Recommends that if we not able to find a new facility by the end of this month, the organization should stay where in the current location over the winter. After brief discussion, Board agreed.
- Staff member, Jackson Browne, and Swanson attended the National Practitioner's Network meeting in Atlanta last month and gave a brief extemporaneous presentation. Both are invited back next year to give a longer presentation about our organization. After brief discussion, Board congratulated Swanson and asked her to pass on their congratulations to Browne as well.
- Drucker asserts that our organization must ensure its name is associated with whatever materials are distributed at that practitioner's meeting next year. The organization should generate revenues where possible from the materials, too.
- Swanson mentioned that staff member, Sheila Anderson's husband is ill and in the hospital. MOTION to send a gift to Anderson's husband, expressing the organization's sympathy and support; seconded and passed.

· Finance Committee report provided by Chair, Elizabeth Drucker:
- Drucker explained that consultant, Susan Johns, reviewed the organization's bookkeeping procedures and found them to be satisfactory, in preparation for the upcoming yearly financial audit. Funds recommends that our company ensure the auditor provides a management letter along with the audit financial report.
· - Drucker reviewed highlights, trends and issues from the balance sheet, income statement and cash flow statement. Issues include that high accounts receivables require Finance Committee attention to policies and procedures to ensure our organization receives more payments on time. After brief discussion of the issues and suggestions about how to ensure receiving payments on time, MOTION to accept financial statements; seconded and passed.

· Board Development Committee's report provided by Chair, Douglas Carver:
- Carver reminded the Board of the scheduled retreat coming up in three months, and provided a drafted retreat schedule for board review. MOTION to accept the retreat agenda; seconded and passed.
- Carver presented members with a draft of the reworded By-laws paragraph that would allow members to conduct actions over electronic mail. Carver suggested review and a resolution to change the By-laws accordingly. Kyumoto suggested that Swanson first seek legal counsel to verify if the proposed change is consistent with state statute. Swanson agreed to accept this action and notify members of the outcome in the next Board meeting.

· Other business:
- Porter noted that he was working with staff member, Jacob Smith, to help develop an information management systems plan, and that two weeks ago he (Porter) had mailed members three resumes from consultants to help with the plan. In the mailing, Porter asked members for their opinions to help select a consultant. Porter asked members for their opinions. (NOTE: Zevon noted that she was also a computer consultant and was concerned about conflict of interest in her Board role regarding this selection, and asked to be ABSTAINED from this selection. Members agreed.) The majority of members agreed on Lease-or-Buy Consultants. MOTION to use Lease-or-Buy Consultants; seconded and passed.
- Swanson announced that she had recently hired a new secretary, Karla Writewell.

· Assessment of the Meeting:
- Kyumoto noted that the past three meetings have run over the intended two-hour time slot by half an hour. He asked members to be more mindful and focused during discussions, and suggested that the Board Development Chair take an action to identify solutions to this issue. Chair, Carver, agreed.

· Meeting adjourned at 9:30 p.m.
· Minutes submitted by Secretary, Bhata Bhatacharia.



 

Friday, January 28, 2011

some important links for company law practical file

draft copy of resolution

http://www.mechel.com/media/for_investors/shareholders-meetings/33C8B831-5365-43C9-94D9-64F5E4C0858C/%D0%9F%D1%80%D0%BE%D0%B5%D0%BA%D1%82%D1%8B_%D1%80%D0%B5%D1%88%D0%B5%D0%BD_2010%20%D0%B0%D0%BD%D0%B3.pdf

draft copy of agenda

http://www.inflowcontrol.com/AGENDA3244_271009_05.pdf

specimen of  director's report

http://www.wipro.com/corporate/investors/pdf-files/annual-report/directors.pdf

specimen of statutory report


http://www.sa-dhan.net/Adls/Forms/CompaniesAct/StatutoryReport.pdf

Monday, January 24, 2011

specimen of aganda

Boundary Estate Tenants and Residents Association Meeting

Tuesday 10th April 2007 at 7.30 – 8.30 p.m.

St. Hilda’s Community Centre E2 7EY

AGENDA



1. Welcome

2. Apologies

3. Minutes of 12/03/2007 AGM

4. Matters Arising from the Minutes & Chairs Report
  • Tower Hamlets Recognition?
  • Tower Hamlets TRA Funding?
  • Bank Account Opened?

5. Traffic   Guest Speaker Margaret Cooper Head of Transportation and Highways LBTH

6. Action Plan
  • What would we like do as a TRA?
  • Courtyard Planters for The Boundary

7. Progress
  • ALMO Progress
  • Rochelle Canteen Progress. Petition? Application?

8. Website
  • Progress Report
  • Possibilities

8. Feedback of conversation with Hassan Miah Estate Officer.
  • Decorating Plans in hand for 2007/8
  • Marlow major works 2007/08
  • Water Pumps done in Hedsor, Taplow, Shiplake, Sundbury and Wargrave 2006/7
  • New Tarmac courtyards of Shiplake, Henley, Walton and Wargrave  2006/07
  • New Security doors 2006/7
  • List of completed Repairs.
  • Julian will be going with him on his next estate visit.
  • Are there any Outstanding Repairs?

9. Date of Next Meeting

10. Any Other Business

Wednesday, January 12, 2011

JAWA How to move the mouse cursor and type keys automatically from your Java program?

Introduction

This article demonstrates the various functionality offered by the java.awt.Robot class. From the Java API documentation "This class is used to generate native system input events for the purposes of test automation, self-running demos, and other applications where control of the mouse and keyboard is needed. The primary purpose of Robot is to facilitate automated testing of Java platform implementations.

Using the class to generate input events differs from posting events to the AWT event queue or AWT components in that the events are generated in the platform's native input queue. For example, Robot.mouseMove will actually move the mouse cursor instead of just generating mouse move events.

Note that some platforms require special privileges or extensions to access low-level input control. If the current platform configuration does not allow input control, an AWTException will be thrown when trying to construct Robot objects. For example, X-Window systems will throw the exception if the XTEST 2.2 standard extension is not supported (or not enabled) by the X server.

Applications that use Robot for purposes other than self-testing should handle these error conditions gracefully. "

Application

  • Automated testing: As the Java API docs said, the primary intended usage for this class is to support automated testing. For example your Java program could do certain things on a mouse click on a JButton or a key release in a JTextField. When it comes to automated testing of this Java program, you can use this Robot class to simulate these user actions in a way that will be as close as possible to a real user action.
  • Demonstration: May be you want to demonstrate a particular GUI app which involves user interactions...

Features

The following are the key features/functionality offered by this Robot class.
  • Simulate/perform the following mouse events.
    • Mouse Move - Moves the mouse pointer to a given screen's coordinates.
    • Mouse press - Presses the specified mouse button at the mouse pointer's current location.
    • Mouse release - Releases the specified mouse button at the mouse pointer's current location.
    • Mouse wheel - Rotates the mouse scroll wheel to a given amount.
  • Simulate/perform the following keyboard events.
    • Key Press - Press a specified key in the keyboard.
    • Key Release - Release a specified key in the keyboard.
  • Simulate/perform a screen capture - "Creates an image containing pixels read from the screen. This image does not include the mouse cursor."
  • Get pixel color - Gets the color of the pixel at a given screen co-ordinate.

Usage

  • Instantiation: The first step to do in order to use this class's features to instantiate it. Instantiation is straight forward and you can use the default parameterless constructor.
Robot robot = new Robot();
  • Simulate Mouse move: To move the mouse over a text field - textField
Point locOnScreen = textField.getLocationOnScreen();
robot.mouseMove(locOnScreen.x, locOnScreen.y);
  • Simulate Mouse button press and release at the current mouse pointer position
// Press and release mouse button 1
    robot.mousePress(InputEvent.BUTTON1_MASK);
    robot.mouseRelease(InputEvent.BUTTON1_MASK);
 
// Press and release mouse button 2
    robot.mousePress(InputEvent.BUTTON2_MASK);
    robot.mouseRelease(InputEvent.BUTTON2_MASK);
  • Simulate Keyboard key presses and releases.
// Types the word 'DEMO'
    robot.keyPress(KeyEvent.VK_D);
    robot.keyRelease(KeyEvent.VK_D);
 
    robot.keyPress(KeyEvent.VK_E);
    robot.keyRelease(KeyEvent.VK_E);
 
    robot.keyPress(KeyEvent.VK_M);
    robot.keyRelease(KeyEvent.VK_M);
 
    robot.keyPress(KeyEvent.VK_O);
    robot.keyRelease(KeyEvent.VK_O);
Note: These methods could be seen as dumb methods which does exactly what you asked it to do. For example if you try to simulate a key press for the character ':' - colon like
robot.keyPress(KeyEvent.VK_COLON)
and in you keyboard the only way you can manually type a colon is to hold shift and press semi-colon ';', then the above line would throw an IllegalArgumentException. The correct way to simulate these characters is to exactly do what can be done with the connected keyboard i.e.
robot.keyPress(KeyEvent.VK_SHIFT);
robot.keyPress(KeyEvent.VK_SEMICOLON);
robot.keyRelease(KeyEvent.VK_SEMICOLON);
robot.keyRelease(KeyEvent.VK_SHIFT);
 
Full Java Code
 
/**
 *  $Id: UsingTheRobotClass.java 103 2010-03-14 01:18:55Z oneyour $
 * 
 * This is an accompanying program for the article
 * <a href="http://www.1your.com/drupal/fulljavacoderobotclassdemo
" title="http://www.1your.com/drupal/fulljavacoderobotclassdemo
">http://www.1your.com/drupal/fulljavacoderobotclassdemo
</a> * 
 * Copyright (c) 2009 - 2010 <a href="http://www.1your.com" title="www.1your.com">www.1your.com</a>.  All rights reserved.
 *
 * Redistribution and use in source and binary forms, with or without
 * modification, are permitted provided that the following conditions
 * are met:
 *
 *   - Redistributions of source code must retain the above copyright
 *     notice, this list of conditions and the following disclaimer.
 *
 *   - Redistributions in binary form must reproduce the above copyright
 *     notice, this list of conditions and the following disclaimer in the
 *     documentation and/or other materials provided with the distribution.
 *
 *   - Neither the name of <a href="http://www.1your.com" title="www.1your.com">www.1your.com</a> nor the names of its
 *     contributors may be used to endorse or promote products derived
 *     from this software without specific prior written permission.
 *
 * THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS "AS
 * IS" AND ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO,
 * THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
 * PURPOSE ARE DISCLAIMED.  IN NO EVENT SHALL THE COPYRIGHT OWNER OR
 * CONTRIBUTORS BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL,
 * EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO,
 * PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATA, OR
 * PROFITS; OR BUSINESS INTERRUPTION) HOWEVER CAUSED AND ON ANY THEORY OF
 * LIABILITY, WHETHER IN CONTRACT, STRICT LIABILITY, OR TORT (INCLUDING
 * NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF THE USE OF THIS
 * SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
 * 
 */
import java.awt.AWTException;
import java.awt.BorderLayout;
import java.awt.Point;
import java.awt.Robot;
import java.awt.event.InputEvent;
import java.awt.event.KeyEvent;
import java.awt.event.MouseAdapter;
import java.awt.event.MouseEvent;
 
import javax.swing.BorderFactory;
import javax.swing.JFrame;
import javax.swing.JPanel;
import javax.swing.JScrollPane;
import javax.swing.JTextArea;
import javax.swing.JTextField;
 
/**
 * A Java  program that demonstrates the functionality offered by the Robot
 * class.
 */
 
public class UsingTheRobotClass 
{
 
 private JTextField textField = null;
 private JTextArea messageArea = null;
 
 public UsingTheRobotClass() 
 {
  JFrame loginScreen = creatFrame();
  loginScreen.setVisible(true);
 
  try 
  {
   Robot robot = new Robot();
 
   messageArea.append("In 5 seconds the Mouse will move over the Text Field...\n");
   robot.delay(5000);
   Point locOnScreen = textField.getLocationOnScreen();
   robot.mouseMove(locOnScreen.x, locOnScreen.y);
   robot.delay(1000);
   messageArea.append("In 5 seconds the Mouse will move to the top left corner of the screen...\n");
   robot.delay(5000);
   robot.mouseMove(0, 0);
 
   robot.delay(1000);
   messageArea.append("In 5 seconds the Mouse will move over the Text Field and perform a LEFT click...\n");
   robot.delay(5000);
   locOnScreen = textField.getLocationOnScreen();
   robot.mouseMove(locOnScreen.x, locOnScreen.y);
   robot.mousePress(InputEvent.BUTTON1_MASK);
   robot.delay(1000);
   robot.mouseRelease(InputEvent.BUTTON1_MASK);
 
   robot.delay(1000);
   messageArea.append("In 5 seconds the Mouse will perform a RIGHT click...\n");
   robot.delay(5000);
   robot.mousePress(InputEvent.BUTTON2_MASK);
   robot.delay(1000);
   robot.mouseRelease(InputEvent.BUTTON2_MASK);
 
   robot.delay(1000);
   messageArea.append("In 5 seconds the word 'demo:' will be typed...\n");
   robot.delay(5000);
 
   robot.keyPress(KeyEvent.VK_D);
   robot.keyRelease(KeyEvent.VK_D);
 
   robot.keyPress(KeyEvent.VK_E);
   robot.keyRelease(KeyEvent.VK_E);
 
   robot.keyPress(KeyEvent.VK_M);
   robot.keyRelease(KeyEvent.VK_M);
 
   robot.keyPress(KeyEvent.VK_O);
   robot.keyRelease(KeyEvent.VK_O);
 
   robot.keyPress(KeyEvent.VK_SHIFT);
   robot.keyPress(KeyEvent.VK_SEMICOLON);
   robot.keyRelease(KeyEvent.VK_SEMICOLON);
   robot.keyRelease(KeyEvent.VK_SHIFT);
 
   robot.delay(1000);
   messageArea.append("End of demo\n");
  } 
  catch (AWTException exception) 
  {
   String errorString = "Platform configuration does not allow low-level input control. Exiting the demo in 5 seconds."; 
   System.err.println(errorString);
   messageArea.append(errorString);
 
   try 
   {
    Thread.sleep(5000);
   } 
   catch (InterruptedException e) {/* Do nothing */}
   System.exit(1);
  }
 }
 
 /**
  * The entry point of this program
  */
 public static void main(String[] args) 
 {
  new UsingTheRobotClass();
 }
 
 public JFrame creatFrame()
 {
  JFrame frame = new JFrame();
  frame.setDefaultCloseOperation(JFrame.EXIT_ON_CLOSE);
  frame.setTitle("Robot Class Demo");
 
  JPanel contentPane = (JPanel)frame.getContentPane();
  contentPane.setLayout(new BorderLayout(10,10));
 
  contentPane.add(createTextField(), BorderLayout.NORTH);
 
  contentPane.add(createStatusArea(), BorderLayout.CENTER);
 
  contentPane.setBorder(BorderFactory.createEmptyBorder(10, 10, 10, 10));
  frame.setSize(600,500);
 
  // Center the JFrame in the screen
  frame.setLocationRelativeTo(null);
 
  return frame;
 
 }
 
 private JTextField createTextField()
 {
  textField = new JTextField(30);
  textField.setToolTipText("This is a JTextField");
  textField.addMouseListener(new MouseAdapter()
  {
    public void mouseEntered(MouseEvent e) 
    {
     messageArea.append("\t--> Mouse Entered. Do you see tool tip?\n");
    }
    public void mouseExited(MouseEvent e) 
    {
     messageArea.append("\t--> Mouse Exited. Tool tip disappeared?\n");
    }
    public void mouseClicked(MouseEvent e) 
    {
     messageArea.append("\t--> Mouse " + getMouseButton(e.getButton()) + " Clicked.\n");
 
    }
    public void mousePressed(MouseEvent e) 
    {
     messageArea.append("\t--> Mouse " + getMouseButton(e.getButton()) + " Pressed.\n");
    }
    public void mouseReleased(MouseEvent e) 
    {
     messageArea.append("\t--> Mouse " + getMouseButton(e.getButton()) + " Released.\n");
    }
  });
  return textField;
 }
 
 private String getMouseButton(int button)
 {
   String buttonText;
 
   switch(button)
   {
    case MouseEvent.BUTTON1:
     buttonText = "Button 1";
     break;
 
    case MouseEvent.BUTTON2:
     buttonText = "Button 2";
     break;
 
    case MouseEvent.BUTTON3:
     buttonText = "Button 3";
     break;
 
    default:
     buttonText = "Unknown Button";
   }
 
   return buttonText;
 
 }
 
 private JScrollPane createStatusArea()
 {
  messageArea = new JTextArea();
  JScrollPane scrollPane = new JScrollPane(messageArea);
  textField.setToolTipText("This is a JTextArea");
 
  return scrollPane;
 }
 
}

MARGINAL COSTING (basic terms+application of marginal costing)

Marginal Costing Definition

This article introduces you to Marginal Costing and its basics. The objective of this article is to help you understand the meaning of marginal costing accounting system and the basics of all other costs and their associations.
Marginal Costing is an accounting system in which variable costs are charged to units and fixed costs of the period are written in full against aggregate contribution.

Marginal Cost

The amount at any given volume of output by which aggregate costs are changed if the volume of output is increased or decreased by one unit.
It is the change in total cost that arises when the quantity produced changes by one unit.

Marginal Costing

The ascertainment of marginal costs and of the effect on profit of changes in volume or type of output by differentiating between fixed costs and variable costs.
The cost of an item includes only the variable costs incurred in its production.
  • Revenue (per product) - Variable Costs (per product) = Contribution (per product)
  • Total Contribution - Total Fixed Costs = Total Profit or (Total Loss)
  1. It does not attempt to allocate fixed costs in an arbitrary manner to different products.
  2. This method is used particularly for short-term decision-making.
  3. The short-term objective is to maximize contribution per unit.
  4. If constraints exist on resources, then Marginal Cost analysis can be employed to maximize contribution per unit of the constrained resource

Direct Costing

The practice of charging all direct costs to operations, processes or products, leaving all indirect costs to be written-off against profit in the period in which they arise is called Direct Costing.
This differs from marginal costing in that some fixed costs could be considered to be direct costs in appropriate circumstances.

Contribution

Contribution is the difference between the sales and the marginal cost of sales. It contributes towards fixed expenses and profit.
The contribution margin is sales minus variable expenses.
Contribution margin = Sales - Variable Expenses
When the contribution margin is expressed as a percentage of sales it is referred to as the contribution margin ratio. The contribution margin per unit is the product’s selling price minus its variable costs and expenses.

Variable Cost

Variable Cost is a cost which tends to vary directly with volume of output.
Variable costs are sometimes referred to as direct costs in system of Direct Costing.
Variable Expenses mean the total of the company’s variable costs plus its variable expenses.

Fixed Cost

Fixed Cost is a cost which tends to be unaffected by variations in volume of output. Fixed costs depend mainly on the efflux ion of time and do not vary directly with volume or rate of output.
Fixed costs are sometimes referred to as period costs in system of Direct Costing.

Fixed Expenses

mean the company’s total amount of fixed costs plus its fixed expenses.

Fixed costs and Fixed expenses

Fixed costs and fixed expenses are those which do not change as volume changes.

Variable costs and Variable expenses

Variable costs and variable expenses increase as volume increases and they will decrease when volume decreases. The relationship of contribution to Sales will remain constant under different levels of sales only if:
  1. Variable cost per unit remains constant.
  2. Fixed costs remain the same.
  3. Selling price per unit does not change.
The cost per unit of an item is important for
  • Setting the selling price
  • Valuing stocks
  • Calculating profitability

Terms and Definitions


Basic Equation:

Variable Cost = Direct Materials + Direct Labor + Direct Expenses
Variable cost per unit = Difference in cost / Difference in Activity level
Variable Cost is also called as Marginal Cost.

Marginal Cost Equation:

Sales (S) = Variable Cost (V) + Fixed Expenses (F) + or – Profit (P) / Loss (L)
  • S = Sales
  • V = Variable Cost
  • F = Fixed Expenses
  • +P = Profit
  • -P = Loss
Sales - Variable Cost = Fixed Expenses + or – Profit / Loss
S - V = F + or – P

Contribution:

Sales – Variable Cost = Contribution = S - V
Fixed Expenses + or – Profit / Loss = Contribution = F + or – P
In simple form, S – V = F + or – P

Missing Factor:

In the above four factors, if any three factors are known, the remaining one can be easily found out.
Sales = Variable Cost + Fixed Expenses + Profit
Variable Cost = Sales – (Fixed Expenses + Profit)
Fixed Expenses = Sales – Variable Cost – Profit
Profit = Sales – Variable Cost – Fixed Expenses
 

Units sold:

Units sold = Contribution margin / Contribution margin per unit

Break Even Point:

A business is said to break even when its total sales are equal to its total costs.
It is a point where
There is no profit or no loss.
Contribution is equal to Fixed Expenses.
Break Even Point (in Units) = Total Fixed Expenses / (Selling Price per Unit – Marginal Cost per Unit)
The answer will be in units and not in value because break even point is based on unit cost.

Break Even Sales: 

      S – V  =  F + P
At Break Even Point Profit equals zero.
Hence,  S – V  =  F
For Break Even Point, the equation is S – V = F
Dividing both sides by S – V,
     ( S – V) /  (S – V)     =        F   /  (S – V)
      i.e. 1    =       F    /  (S – V)
Multiplying both sides by S,
      S * 1    =         ( F * S)   / (S – V)
Therefore, the formula for the calculation of break even sales is: 
                  ( F * S)   /   (S – V) 

Calculation of Sales for a desired or expected Profit:

(Fixed Expenses + Profit) / (Selling Price per Unit – Marginal Cost per Unit)
Or
(Fixed Expenses + Profit) / Contribution per Unit
The formula for the calculation of Sales to earn an expected or desired profit is:
( (F + P) * S) / ( S – V)

Profit / Volume Ratio or Contribution / Sales Ratio

(P/V Ratio) or (C/S Ratio)
P/V Ratio
Contribution / Sales i.e. C / S
Or
(Sales – Variable Cost) / Sales i.e. (S – V) / S
Or
(Fixed Expenses + Profit) / Sales i.e. ( F + P) / S
Or
Changes in contribution in two periods / Changes in Sales in two periods
Or
Changes in Profit in two periods / Changes in Sales in two periods
The ratio can be shown in the form of percentage if the formula is multiplied by 100.
This ratio can be used for the calculation of
Break Even Point is Fixed Costs / P/V Ratio = F / P/V Ratio
For the calculation of sales to earn a desired or expected profit is
(Fixed Costs + Profit) / P/V Ratio = F + P / P/V Ratio
Contribution / P/V Ratio
Variable Costs = Sales (1 – P/V Ratio)
Contribution is Sales x P/V Ratio

 

Margin of Safety (M/S)

It is the difference between the actual sales and the sales at break even point.
Sales or Output beyond break even point is known as margin of safety.
Margin of Safety (M/S) = Present Sales – Break Even Sales
Or
= Profit / P/V Ratio

Break-Even and Target Income

Sales = Total Variable Costs + Total Fixed Costs + Target Income
Where Target Income is zero, then
Sales = Total Variable Costs + Total Fixed Costs
Which is the Break even sales.
Break-Even Point in Units = Total Fixed Costs / Contribution Margin Per Unit
Break-Even Point in Sales = Total Fixed Costs / Contribution Margin Ratio
Units to Achieve a Target Income = (Total Fixed Costs + Target Income) / Contribution Margin Ratio
Break-even quantity = Total fixed costs / (selling price - average variable costs)
Explanation - in the denominator :
"Price minus average variable cost" is the variable profit per unit, or contribution margin of each unit that is sold.
This relationship is derived from the profit equation:
Profit = Revenues - Costs
Where,
Revenues = (selling price * quantity of product) and
Costs = (average variable costs * quantity) + total fixed costs.
Therefore,
Profit = (selling price * quantity) - (average variable costs * quantity + total fixed costs).
Solving for Quantity of product at the breakeven point when Profit equals zero,
the quantity of product at breakeven is
Break-even quantity = Total fixed costs / (selling price - average variable costs)
Specific Fixed Cost
In some cases in spite of lower variable cost of production, there may be an increase in the fixed costs, called specific fixed cost. It becomes essential to find out the
minimum requirements of volume in order to justify the making instead of buying.

This volume can be calculated by the following formula:
Increase in fixed costs / Contribution per unit (i.e. Purchase Price – Variable cost of Production)

Applications of Marginal Costing
Marginal Costing is an accounting system technique for decision making in management. To go further with this article, you should be well aware of the basics of Marginal costing and other related definitions.
Listed below are the various areas of applications of Marginal Costing.
  1. Cost Control
  2. Profit Planning
  3. Evaluation of Performance
  4. Decision Making
    • Fixation of selling prices
    • In house make or buy decisions
    • Selecting production with Key or limiting factor
    • Effect of change in sales price
    • Maintaining a desired level of profits
    • Selection of a suitable product mix
    • Alternative methods of production
    • Diversification of products
    • Accepting an additional order
    • Dropping a product
    • Closing down or suspending activities
    • Alternative course of action
    • Level of activity planning
As mentioned in the introduction section, this article will mainly focus on the Decision making processes. Marginal Costing tool is considered as an important technique used for Decision making in management. The following sections will describe the key areas in which decision making has been proven to be required and excercised.

Fixation of Selling Prices

  • Under normal circumstances 
  • In times of competition 
  • In times of trade depression
  • In accepting additional orders for utilizing idle capacity
  • In exporting and exploring new markets
  1. Selling Price below the Marginal Cost
  2. When a new product is introduced in the market
  3. When foreign market is to be explored to earn foreign exchange
  4. When the concern has already purchased large quantities of materials
  5. At the time of closure of business 
  6. When the sales of one product at a price below the marginal cost will push up the sales of other profitable products
  7. When employees cannot be retrenched
  8. When the goods are perishable nature

In house make or buy decisions

In some cases, in spite of lower variable cost of production, there may be an increase in the fixed costs. It becomes essential to find out the minimum requirements of volume in order to justify the making instead of buying.
The formula is
                                    Increase in Fixed Costs                                        
-------------------------------------------------------------------------------------------------------
Contribution per Unit (i.e. Purchase Price – Variable Cost of Production)

Selecting production with Key Factor or Limiting Factor

A key factor is that factor which puts a limit on production and profit of a business.
Usually this limiting factor is sales. A company may not be able to sell as much as it can produce.
Sometimes a company can sell all it produces but production is limited due to the shortage of materials, labor plant capacity or capital. A decision has to be taken regarding the choice of the product whose production is to be increased, reduced or stopped.
When there is no limiting factor, the choice of the product will be on the basis of the highest P/V ratio.
When there are scarce or limited resources, selection of the product will be on the basis of contribution per unit of scarce factor of production.

Effect of Change in Sales Price

Management is confronted with the problem of cut in price of products from time to time on account of competition, expansion programs or government regulations.
The effect of a cut in selling price per unit will be that contribution per unit will be reduced.

Selection of Suitable Product Mix

When a company manufactures more than one product, a question may arise as to which product mix will give the maximum profits.
  • The best product mix is that which yields the maximum contribution.
  • The products which give the maximum contribution are to be retained and their production should be increased.
  • The products which give comparatively less contribution should be reduced or closed down altogether.
The effect of sales mix can also be seen by comparing the P/V ratio and breakeven point.
  • The new sales mix will be favorable if it increases the P/V ratio and reduces the breakeven point.

Alternative Methods of Production

The method which gives the greatest contribution is to be adopted keeping the limiting factor in view.

Diversification of Products

  • In order to decide about the profitability of the new product, it is assumed that the manufacture of the new product will not increase fixed costs of the concern.
  • If the price realized from the sale of such product is more than its variable cost of production it is worth trying.
  • If the data is presented under absorption costing method, the decision will be wrong.
  • If with the introduction of new product, there is an increase in the fixed costs, then such specific increase in fixed costs must be deducted from the contribution for making any decision.
  • General fixed costs will be charged to the old product/products.

Closing down or suspending activities

The decision to close down or suspend its activities will depend whether products are making contribution towards fixed costs or not.
ie. Whether the contribution is more than the difference in fixed costs (by working at normal operations and when the plant or product is closed down or suspended)
If the business is closed down:
  • There may be certain fixed costs which could be avoided.
  • There will be certain expenses which will have to be incurred at the time of closing the operations like redundancy payments, necessary maintenance of the plant or overhauling of plant on reopening training of personal etc.
  • Such costs are associated with closing down of business and must be taken into consideration before taking any decision.
Fixed costs may be general or specific
  • General fixed costs may nor may not remain constant while specific costs will be directly affected by closing down of the operations.
  • Besides, obsolescence if any, retaining the customers, relationship with the suppliers, non-collection of dues from customers or interest on overdraft for closing down the operations must be taken into consideration.

Alternative Course of Action

Whatever course of action is adopted, certain fixed expenses will remain unaffected.
The criterion is the effect of alternative course of action upon the marginal (variable) costs in relation to the revenue obtained.
The course of action which yields the greatest contribution is the most profitable to be followed by the management.

Level of activity planning

Maximum contribution at a particular level of activity will show the position of maximum profitability.

Marginal Costing and Absorption Costing

Marginal Costing and Absorption Costing



Learning Objectives
  • To understand the meanings of marginal cost and marginal costing
  • To distinguish between marginal costing and absorption costing
  • To ascertain income under both marginal costing and absorption costing
Introduction The costs that vary with a decision should only be included in decision analysis. For many decisions that involve relatively small variations from existing practice and/or are for relatively limited periods of time, fixed costs are not relevant to the decision. This is because either fixed costs tend to be impossible to alter in the short term or managers are reluctant to alter them in the short term.
Marginal costing - definition
Marginal costing distinguishes between fixed costs and variable costs as convention ally classified.
The marginal cost of a product –“ is its variable cost”. This is normally taken to be; direct labour, direct material, direct expenses and the variable part of overheads.
Marginal costing is formally defined as:
‘the accounting system in which variable costs are charged to cost units and the fixed costs of the period are written-off in full against the aggregate contribution. Its special value is in decision making’. (Terminology.)
The term ‘contribution’ mentioned in the formal definition is the term given to the difference between Sales and Marginal cost. Thus

MARGINAL COST =VARIABLE COST DIRECT LABOUR
+
DIRECT MATERIAL
+
DIRECT EXPENSE
+
VARIABLE OVERHEADS
CONTRIBUTION SALES - MARGINAL COST
The term marginal cost sometimes refers to the marginal cost per unit and sometimes to the total marginal costs of a department or batch or operation. The meaning is usually clear from the context.
Note
Alternative names for marginal costing are the contribution approach and direct costing In this lesson, we will study marginal costing as a technique quite distinct from absorption costing.
Theory of Marginal Costing
The theory of marginal costing as set out in “A report on Marginal Costing” published by CIMA, London is as follows:
In relation to a given volume of output, additional output can normally be obtained at less than proportionate cost because within limits, the aggregate of certain items of cost will tend to remain fixed and only the aggregate of the remainder will tend to rise proportionately with an increase in output. Conversely, a decrease in the volume of output will normally be accompanied by less than proportionate fall in the aggregate cost.
The theory of marginal costing may, therefore, by understood in the following two steps:
  1. If the volume of output increases, the cost per unit in normal circumstances reduces. Conversely, if an output reduces, the cost per unit increases. If a factory produces 1000 units at a total cost of $3,000 and if by increasing the output by one unit the cost goes up to $3,002, the marginal cost of additional output will be $.2.
  2. If an increase in output is more than one, the total increase in cost divided by the total increase in output will give the average marginal cost per unit. If, for example, the output is increased to 1020 units from 1000 units and the total cost to produce these units is $1,045, the average marginal cost per unit is $2.25. It can be described as follows:
Additional cost =
Additional units
$ 45 = $2.25
   20
The ascertainment of marginal cost is based on the classification and segregation of cost into fixed and variable cost. In order to understand the marginal costing technique, it is essential to understand the meaning of marginal cost.
Marginal cost means the cost of the marginal or last unit produced. It is also defined as the cost of one more or one less unit produced besides existing level of production. In this connection, a unit may mean a single commodity, a dozen, a gross or any other measure of goods.
For example, if a manufacturing firm produces X unit at a cost of $ 300 and X+1 units at a cost of $ 320, the cost of an additional unit will be $ 20 which is marginal cost. Similarly if the production of X-1 units comes down to $ 280, the cost of marginal unit will be $ 20 (300–280).
The marginal cost varies directly with the volume of production and marginal cost per unit remains the same. It consists of prime cost, i.e. cost of direct materials, direct labor and all variable overheads. It does not contain any element of fixed cost which is kept separate under marginal cost technique.
Marginal costing may be defined as the technique of presenting cost data wherein variable costs and fixed costs are shown separately for managerial decision-making. It should be clearly understood that marginal costing is not a method of costing like process costing or job costing. Rather it is simply a method or technique of the analysis of cost information for the guidance of management which tries to find out an effect on profit due to changes in the volume of output.
There are different phrases being used for this technique of costing. In UK, marginal costing is a popular phrase whereas in US, it is known as direct costing and is used in place of marginal costing. Variable costing is another name of marginal costing.
Marginal costing technique has given birth to a very useful concept of contribution where contribution is given by: Sales revenue less variable cost (marginal cost)
Contribution may be defined as the profit before the recovery of fixed costs. Thus, contribution goes toward the recovery of fixed cost and profit, and is equal to fixed cost plus profit (C = F + P).
In case a firm neither makes profit nor suffers loss, contribution will be just equal to fixed cost (C = F). this is known as break even point.
The concept of contribution is very useful in marginal costing. It has a fixed relation with sales. The proportion of contribution to sales is known as P/V ratio which remains the same under given conditions of production and sales.
The principles of marginal costing
The principles of marginal costing are as follows.
  1. For any given period of time, fixed costs will be the same, for any volume of sales and production (provided that the level of activity is within the ‘relevant range’). Therefore, by selling an extra item of product or service the following will happen.
    • Revenue will increase by the sales value of the item sold.
    • Costs will increase by the variable cost per unit.
    • Profit will increase by the amount of contribution earned from the extra item.
  2. Similarly, if the volume of sales falls by one item, the profit will fall by the amount of contribution earned from the item.
  3. Profit measurement should therefore be based on an analysis of total contribution. Since fixed costs relate to a period of time, and do not change with increases or decreases in sales volume, it is misleading to charge units of sale with a share of fixed costs.
  4. When a unit of product is made, the extra costs incurred in its manufacture are the variable production costs. Fixed costs are unaffected, and no extra fixed costs are incurred when output is increased.
Features of Marginal Costing The main features of marginal costing are as follows:
  1. Cost Classification
    The marginal costing technique makes a sharp distinction between variable costs and fixed costs. It is the variable cost on the basis of which production and sales policies are designed by a firm following the marginal costing technique.
  2. Stock/Inventory Valuation
    Under marginal costing, inventory/stock for profit measurement is valued at marginal cost. It is in sharp contrast to the total unit cost under absorption costing method.
  3. Marginal Contribution
    Marginal costing technique makes use of marginal contribution for marking various decisions. Marginal contribution is the difference between sales and marginal cost. It forms the basis for judging the profitability of different products or departments.
Advantages and Disadvantages of Marginal Costing Technique Advantages
  1. Marginal costing is simple to understand.
  2. By not charging fixed overhead to cost of production, the effect of varying charges per unit is avoided.
  3. It prevents the illogical carry forward in stock valuation of some proportion of current year’s fixed overhead.
  4. The effects of alternative sales or production policies can be more readily available and assessed, and decisions taken would yield the maximum return to business.
  5. It eliminates large balances left in overhead control accounts which indicate the difficulty of ascertaining an accurate overhead recovery rate.
  6. Practical cost control is greatly facilitated. By avoiding arbitrary allocation of fixed overhead, efforts can be concentrated on maintaining a uniform and consistent marginal cost. It is useful to various levels of management.
  7. It helps in short-term profit planning by breakeven and profitability analysis, both in terms of quantity and graphs. Comparative profitability and performance between two or more products and divisions can easily be assessed and brought to the notice of management for decision making.
Disadvantages
  1. The separation of costs into fixed and variable is difficult and sometimes gives misleading results.
  2. Normal costing systems also apply overhead under normal operating volume and this shows that no advantage is gained by marginal costing.
  3. Under marginal costing, stocks and work in progress are understated. The exclusion of fixed costs from inventories affect profit, and true and fair view of financial affairs of an organization may not be clearly transparent.
  4. Volume variance in standard costing also discloses the effect of fluctuating output on fixed overhead. Marginal cost data becomes unrealistic in case of highly fluctuating levels of production, e.g., in case of seasonal factories.
  5. Application of fixed overhead depends on estimates and not on the actuals and as such there may be under or over absorption of the same.
  6. Control affected by means of budgetary control is also accepted by many. In order to know the net profit, we should not be satisfied with contribution and hence, fixed overhead is also a valuable item. A system which ignores fixed costs is less effective since a major portion of fixed cost is not taken care of under marginal costing.
  7. In practice, sales price, fixed cost and variable cost per unit may vary. Thus, the assumptions underlying the theory of marginal costing sometimes becomes unrealistic. For long term profit planning, absorption costing is the only answer.
Presentation of Cost Data under Marginal Costing and Absorption Costing Marginal costing is not a method of costing but a technique of presentation of sales and cost data with a view to guide management in decision-making.
The traditional technique popularly known as total cost or absorption costing technique does not make any difference between variable and fixed cost in the calculation of profits. But marginal cost statement very clearly indicates this difference in arriving at the net operational results of a firm.
Following presentation of two Performa shows the difference between the presentation of information according to absorption and marginal costing techniques:
MARGINAL COSTING PRO-FORMA

 ££
Sales Revenue xxxxx
Less Marginal Cost of Sales  
Opening Stock (Valued @ marginal cost)xxxx 
Add Production Cost (Valued @ marginal cost)xxxx 
Total Production Costxxxx 
Less Closing Stock (Valued @ marginal cost)(xxx) 
Marginal Cost of Productionxxxx 
Add Selling, Admin & Distribution Costxxxx 
Marginal Cost of Sales (xxxx)
Contribution xxxxx
Less Fixed Cost (xxxx)
Marginal Costing Profit xxxxx

ABSORPTION COSTING PRO-FORMA

 ££
Sales Revenue xxxxx
Less Absorption Cost of Sales  
Opening Stock (Valued @ absorption cost)xxxx 
Add Production Cost (Valued @ absorption cost)xxxx 
Total Production Costxxxx 
Less Closing Stock (Valued @ absorption cost)(xxx) 
Absorption Cost of Productionxxxx 
Add Selling, Admin & Distribution Costxxxx 
Absorption Cost of Sales (xxxx)
Un-Adjusted Profit xxxxx
Fixed Production O/H absorbedxxxx 
Fixed Production O/H incurred(xxxx) 
(Under)/Over Absorption xxxxx
Adjusted Profit xxxxx
Reconciliation Statement for Marginal Costing and Absorption Costing Profit

 $
  
Marginal Costing Profitxx
ADD
(Closing stock – opening Stock) x OAR
xx
= Absorption Costing Profitxx

Where OAR( overhead absorption rate) =Budgeted fixed production overhead
Budgeted levels of activities
Marginal Costing versus Absorption Costing
After knowing the two techniques of marginal costing and absorption costing, we have seen that the net profits are not the same because of the following reasons: 1. Over and Under Absorbed Overheads
In absorption costing, fixed overheads can never be absorbed exactly because of difficulty in forecasting costs and volume of output. If these balances of under or over absorbed/recovery are not written off to costing profit and loss account, the actual amount incurred is not shown in it. In marginal costing, however, the actual fixed overhead incurred is wholly charged against contribution and hence, there will be some difference in net profits.
2. Difference in Stock Valuation
In marginal costing, work in progress and finished stocks are valued at marginal cost, but in absorption costing, they are valued at total production cost. Hence, profit will differ as different amounts of fixed overheads are considered in two accounts.
The profit difference due to difference in stock valuation is summarized as follows:
  1. When there is no opening and closing stocks, there will be no difference in profit.
  2. When opening and closing stocks are same, there will be no difference in profit, provided the fixed cost element in opening and closing stocks are of the same amount.
  3. When closing stock is more than opening stock, the profit under absorption costing will be higher as comparatively a greater portion of fixed cost is included in closing stock and carried over to next period.
  4. When closing stock is less than opening stock, the profit under absorption costing will be less as comparatively a higher amount of fixed cost contained in opening stock is debited during the current period.
The features which distinguish marginal costing from absorption costing are as follows.
  1. In absorption costing, items of stock are costed to include a ‘fair share’ of fixed production overhead, whereas in marginal costing, stocks are valued at variable production cost only. The value of closing stock will be higher in absorption costing than in marginal costing.
  2. As a consequence of carrying forward an element of fixed production overheads in closing stock values, the cost of sales used to determine profit in absorption costing will:
    1. include some fixed production overhead costs incurred in a previous period but carried forward into opening stock values of the current period;
    2. exclude some fixed production overhead costs incurred in the current period by including them in closing stock values.
    In contrast marginal costing charges the actual fixed costs of a period in full into the profit and loss account of the period. (Marginal costing is therefore sometimes known as period costing.)
  3. In absorption costing, ‘actual’ fully absorbed unit costs are reduced by producing in greater quantities, whereas in marginal costing, unit variable costs are unaffected by the volume of production (that is, provided that variable costs per unit remain unaltered at the changed level of production activity). Profit per unit in any period can be affected by the actual volume of production in absorption costing; this is not the case in marginal costing.
  4. In marginal costing, the identification of variable costs and of contribution enables management to use cost information more easily for decision-making purposes (such as in budget decision making). It is easy to decide by how much contribution (and therefore profit) will be affected by changes in sales volume. (Profit would be unaffected by changes in production volume). In absorption costing, however, the effect on profit in a period of changes in both:
    1. production volume; and
    2. sales volume;
      is not easily seen, because behaviour is not analysed and incremental costs are not used in the calculation of actual profit.
Limitations of Absorption Costing The following are the criticisms against absorption costing:
  1. You might have observed that in absorption costing, a portion of fixed cost is carried over to the subsequent accounting period as part of closing stock. This is an unsound practice because costs pertaining to a period should not be allowed to be vitiated by the inclusion of costs pertaining to the previous period and vice versa.
  2. Further, absorption costing is dependent on the levels of output which may vary from period to period, and consequently cost per unit changes due to the existence of fixed overhead. Unless fixed overhead rate is based on normal capacity, such changed costs are not helpful for the purposes of comparison and control.
The cost to produce an extra unit is variable production cost. It is realistic to the value of closing stock items as this is a directly attributable cost. The size of total contribution varies directly with sales volume at a constant rate per unit. For the decision-making purpose of management, better information about expected profit is obtained from the use of variable costs and contribution approach in the accounting system. Summary
Marginal cost is the cost management technique for the analysis of cost and revenue information and for the guidance of management. The presentation of information through marginal costing statement is easily understood by all mangers, even those who do not have preliminary knowledge and implications of the subjects of cost and management accounting.
Absorption costing and marginal costing are two different techniques of cost accounting. Absorption costing is widely used for cost control purpose whereas marginal costing is used for managerial decision-making and control.

B.Sc(IT) 1st yr class test for month of janury

Class Bsc (it) 1st year
Assistance professor ravneet arora
Class test
Date 12 Jan, 2011
Question 1              What is Management Accounting? Explain the difference between financial accounting, cost accounting and management accounting.

Date 17Jan, 2011
Question 1      what is marginal costing? Explain its features with its advantages and disadvantages.
Question 2      discusses the application of marginal costing in managerial decisions with example.

Date 22 Jan, 2011
Question 1      what do you mean by inventory? Explain various tools and techniques of inventory control with its meaning

B.Com(prof) class test for the month of janury

Class b.com (professional)-II
Assistance professor ravneet arora

Class tests

Date Jan12, 2011

Question 1              Define the term “Secretary”. What are the various types of Secretaries?
Question 2              What are the various qualifications of a Company Secretary?
Question 3              How the secretary will be appointed?

Date Jan17, 2011

Question 1              Explain the functions of company secretary
Question 2              Explain the various Duties and Rights of Company Secretary.

Date Jan22, 2011

Question 1              what are the various provisions regarding borrowing powers?
                                   

Monday, January 3, 2011

Dav.college,hati gate amritsar
Class b.com professional 2nd year   section a
Assistance professor mrs.ravneet arora
Topics for of Practical Notebook company law
Topic                                                                                                                      date
Company                                                                                                       nov.20, 2010
Company meeting                                                                                       nov.20, 2010
Types of meeting                                                                                       nov.20, 2010
Company secretary                                                                                 nov.28, 2010
Qualification of company secretary                                                nov.28,2010
Appointment of company secretary                                                  nov.28, 2010
Rights and duties of company secretary                                        nov.o8, 2010
Procedure in connection with allotment of Shares        
With meaning                                                                                              jan.08, 2011
Procedure in connection with forfeiture with meaning                                                                                                        jan.10, 2011
Procedure in connection with Reissue with meaning                                                                                                        jan.11, 2011
Procedure in connection with Transfer of Shares with meaning                                                                                                        jan.11, 2011
Pre-requisites for valid company meeting                                      jan.12, 2011
Notice with its specimen                                                                         jan.12, 2011
Agenda                                                                                                         jan.13, 2011
Quorum                                                                                                          jan.13, 2011
Proxy with specimen of proxy form                                                    jan.13, 2011
Reports                                                                                                        jan.14, 2011
Minutes of Meetings with its specimen                                               jan.14, 2011
Resolutions with its specimen                                                              jan.14, 2011
Share Certificates with its specimen                                               jan.15, 2011
Share Warrants with its specimen                                                     jan.15, 2011

Note             Last date for submission of practical file is Jan 20, 2011.file will not be checked after this date.
Students with unchecked file will not be eligible for final exams viva

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