NAME: VIRENDRA DONGRE

ROLL NO: 19-MF-07

SUB: COSTING ASSIGNMENT
Project 1
Every company has several departments. One of the important of them is the
accounting department. The management accounting department helps the
firm to maintain the books of accounts and other financial transactions. Every
management accounting division of the organisation mainly consists of three
sub departments.
 Cost Accounting
 Performance Evaluation and Analysis
 Planning and Support decisions

Cost accounting is used to determine the actual cost of the product which
helps to differentiate costs such as variable cost and fixed cost. This is the cost
associated with mainly production process. It is historical cost and it includes
various other different costs such as standard costing, marginal costing,
activity-based costing, lean accounting, etc.
Performance evaluation consists of several other components which includes:
orientation, training and development, feedback and annual appraisal. The
manager involved here is responsible to evaluate end-to-end performance of
the employees.
Orientation: Every employee should be provided validate information about
his job description. The key role of the manager here is to help employees as
much as he can. This is the initial stage of evaluating their performance. At the
same time every manager is also responsible for allocating right person at the
right time for the right job assignments.
Training: Performance evaluation includes employee training and
development, which are within the purview of a management role. Although
managers may use the talent of experienced, long-term employees to assist
with skills training, the ultimate responsibility for training rests on the
shoulders of the department manager. In addition to developing the skills and
capabilities of their employees, managers identify employees who have high
potential. Such employees are distinguishable from high performing
employees.
Feedback: This is the prime responsibility of the Manager to give feedback to
its employees on a regular basis. Throughout the evaluation period, managers
give their employees ongoing support, feedback and counselling on
performance issues and disciplinary and corrective action. When employee
underperforms, managers are the first ones to observe the decline. It’s their
responsibility to evaluate the reasons for the same and communicate with the
employee about measures to be taken to improve the performance. He should
also make sure whether the employee needs to have any skills training or any
other essential training which can help him increase his performance.
Appraisal: The final step in performance evaluation is to make the actual
performance appraisal. Manager’s complete leadership training that enables
them to understand the importance of performance management and
evaluation, as well as how to prepare for and conduct an annual performance
appraisal. For preparing such reports a manager must know about how an
employee is being rated for his performance and also he should know the
actual performance of the employee. Therefore, a manager’s role includes
observation and assessment. It’s up to the manager to conduct an appraisal
meeting that employees look forward to and one that encourages employees
to achieve their goals year after year.
 Project 2:
 Factors to be consider while upgrading a new technology for
the Company:
 Cost effective: Any technological advancement should be available at a
cheaper price for the company. As if it is, then it would be possible for
the company to make changes accordingly and this will also not affect
the overall pricing of the product and vice versa.
 Serve the interest of employer as well as employee: It should be in the
favour of employees as well as the employer. The technology should
build the bridges between and within the organisation rather than
having something extraordinary in it that causes barriers or obstacles
either for the employees or for the company.
 Easy to understand: Any upgradation about the companies
technological structure should be such that it is easy to understand
mainly for the employees working in the company. If it is not so it would
lead to unnecessary panic, misconceptions among the employees and
hence they will not perform to their capabilities and this will eventually
lead to low profits.
 Uncertainty about the future: The future is full of ups and down. The
technology that is to its peek today might go down in near future, hence
amount invested in such advancements should also be less expensive on
part of the company.
 Integration: When you upgrade a particular aspect of your business
technology it is likely that other software and hardware features will
remain as they are, which is when integration issue can arise. Making
sure upgraded solutions integrate with legacy as IT is crucial, as many
issues can bring workplace productivity lower.
 Security & Cloud computing data storage: Security of the data is must
as if it is not such data can be used by the competitors which will
eventually harm the company. Also, data must be saved in cloud
computing storage as to avoid additional cost for the companies.
Let us understand with the help of following example of Income
statement;
 Original i)If technology ii) If there is
statement advancement technological
(the one made and advancement
which there is a rise & sales
company is in sales (in doesn’t
following) Cr.) increase
(in Cr.) (in Cr.)
SALES 1000 1100 1000
(-) VARIABLE (300) (350) (300)
COST
CONTRIBUTION 700 750 700
(-) FIXED COST (200) (200 + 10 ) (200 + 10 )
EARNINGS 500 540 490
BEFORE
INTEREST AND
TAXES

From the above chart it is clear that initially the company getting the
profits after deducting the expenses is Rs.500 Cr. If they make changes
and upgrade their technology this might cause them an increase in sales
or the sales might remain constant but there is a rise in fixed cost i.e.
expense of the company.
So it is advisable that an analyst must check the break even sales, consider
the behaviour of fixed cost, etc before taking a final call. In the above case,
if there is a rise in sales while the fixed cost remains constant a company
should go for it, but on the other hand if sales doesn’t increase and the
company is getting the profits less as compared to the original profit it
shouldn’t opt for such technological advancement.