How to Treat the Under-absorbed Overhead in the Cost Accounts

Under-absorbed overhead means, budgeted overhead are less than actual overheads. We calculate actual overhead with recording of each overhead and we calculate budgeted overhead on the basis of machine hours expected and machine hour rate.

If overheads are under-absorbed, at that time, it is necessary to find the causes of this under absorption and then according to the reason, we treat under-absorbed overheads in cost accounts.

With following example, we try to make you understand about “how to treat the under-absorbed overhead in the cost accounts?”

Problem

In a factory, overheads of a particular department are recovered on the basis of Rs. 5 per machine hour. The total expenses incurred and the actual machine hours for the department for the month of august were Rs. 80,000 and 10,000 hours respectively. Of the amount of Rs. 80,000, Rs. 15000 became payable due to an award of the labor court and Rs. 5000 was in respect of expenses of the previous year booked in the current month (August). Actual production was Rs. 40,000 units, of which 30,000 units were sold. On analyzing the reasons, it was found that 60% of the under absorbed overhead was due to defective planning and the rest was attributed to normal cost increase. How would you treat the under-absorbed overhead in the cost accounts?

Solution

Total Actual expenses = Rs. 80,000

Less award of labor court – Rs. 15000

Less previous year expenses – Rs. 5000

-------------------------------------------------

Balance actual expense = Rs. 60000

Less budget overhead

5 X 10000 = - Rs. 50,000

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Under- absorbed overhead = Rs. 10,000
------------------------------------------------

Treatment of under – absorbed overheads

60% of 10000 = Rs. 6000 will be debited to profit and loss account

40% X 10000= 4000 will distributed to finished goods and cost of sale

Total balance under-absorbed Rs. 4000

Unit produced Rs. 40000

Rate of under-absorbed per unit = 40000/4000 = Rs. 0.10 paise per unit

Under absorbed overhead charged on finished goods = Rs. 10000 (Closing stock) X 0.10 per unit = 1000 Rs.

Under absorbed overhead charged on cost of goods sold = Rs. 30000 X 0.10 p = Rs. 3000

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India is Better than America

Why am I saying India is better than America? I am saying this on the basis of one of YouTube news video in which it told that Top American graduates heading to India for employment. It means economy and market  of India is growing so fast and there are lots of big opportunities in India not only for Indians but Americans also. Moreover, now there is better infrastructure in India for working in good environment. On the other side, the US economy is predicted to shrink within the next year.

In this video, reporter talked with Colin one USA Graduate who came India for working in India. He told that all things in India are in positive side. Infosys a famous Indian IT company is recruiting Americans for IT work in India.



Now, it will be shameful for Indians who are leaving India for working in USA. On the other side, it will be biggest loss of human capital. So, learn from Americans and never leave India.

Live in India and Do for India. This is real love for India.

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How to Make Accounting Interesting

Before getting the answer of “how to make accounting interesting?” you have to learn acting. Did you play different role in different style? Accounting is so practical subject and for making it interesting, you have to play the role of businessman, trader, investor, creditor and debtor and many other parties. After this, you can attract your students ‘eye on accounting because when they will see you in different personality who are interested in accounting, all of them will say, without accounting information, we can not trust on company, without accounting information, we can not deal company. After this, your student will realize, accounting is not just recording the transaction but it is photo to show the proof, it is movie to show the real film of company. When they will say that, you should understand that accounting has become interesting for them.

Today is the time of technology and you have to teach accounting through online accounting system. With this, students will enjoy accounting when they learn it from you in their home. Two means ago, I am teaching accounting on Google talk. Few days ago, I taught accounting practical question on my student’s computer through the help of team viewer. My students’ sometime, comments on my blog for showing their reaction, after this, I improve my teaching way. All these things, make accounting so interesting. Except these things, you can make a video by using your webcam and lecture on any topic on accounting. After uploading it to YouTube and then, when you go to your classroom and show same lecture on YouTube to your students, they will surely feel this as fun and understand what you want to teach them.

Search Result Regarding the answer of this question

1# Yahoo Answer: Accounting is cool because it teaches us so many ways to commit fraud.

2# Fun Trivia: Make small question relating to accounting for creating students’ interest in it.

3. # Golden Practices Blog: The accounting profession should design a creative, mind stimulating, review application.

4. # How Stuff Works: The first step to making accounting fun is to get a grip on the terminology. Second, realize that accounting is more than numbers. It includes databases of your customers, your vendors, and your employees, if you have them. Third, the key to successful accounting is in the establishment of your accounting system and the reliable input of data.

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Appreciation Letter from Hong Kong Businessman

One of  Hong Kong ( China)  businessman sent me appreciation letter through YouTube personal message  in which he appreciated my work in my blog accounting education and in YouTube for teaching Accounting more easily.

I replied him

"Thanks dear for your motivation. I am satisfied that you have learned something from me. Please keep in touch with accounting education. If you have specific question, please tell me, I will try to solve it.

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Online Accounting System

If your business need have finally convinced you to maintain online accounting system, then it is great. Now you don’t have to worry about taking regular backups of your accounting records  anymore as this online accounting system will save all your business record to your online plate form automatically like publishing of any website.

The online accounting system is more fast and transparent. Moreover each branch's passed voucher entries will be online plate form and it will be easy to track movement of stock, if stock register will be shown online. In India, all most all banks accounting system is online. This is the reason that every customer can take the fund from any ATM machine because all banks accounts are now connecting RBI. Recently, Food Corporation of India has made online accounting system. With this online accounting system, FCI has connected all warehouses.

 I am sure your efficiency and decision making power will be increased with online accounting system. Many online system like Google Docs are free to record transaction but some professional online accounting software also get rent for using them. But if we compare the benefits of online accounting with its cost, then it will be very low.

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Advantages of Machine Hour Rate

1. With machine hour rate, we can charge almost all operating expenses on the basis of machines.

2.With the help of under absorption of machine overhead, we can find the idle time of machine. After this, we try to reduce it.

3. It is useful to increase efficiency of machine because we can used it effective way and all overheads depends on it.

4. It is very scientific method to calculate factory overhead.

5. With this, we can fastly calculate total cost of production, after this, it is very easy to calculate selling price of any product.

Now, if you are interested to watch the lecture on machine hour rate, you can see on following YouTube video.

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Introduction to the Google Ad Auction

If you are interested to know the introduction to the Google Ad Auction, you have to understand that there is not single and fixed rule for it but it is fully scientific system in which advertisers bid for showing ads in publisher's site. Actually, google tries to minimize the cost, which an advertiser has to pay.

If you want to interested its related question and answer, you can read my guide at here.

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HDFC Netbanking

HDFC Netbanking is freedom of doing transaction with bank without going to local branch of hdfc bank. With hdfc netbanking, you can operate your account from your home's Internet. You can pay your telephone bill, electricity bill and other bill through hdfc netbanking facility.

First to all, you have to register yourself for getting IPIN. You can also get it from your nearest hdfc bank branch by opening your saving account in hdfc bank. One more thing, you need for operating net banking through hdfc bank, that is your customer id. When, you search on google by writing hdfc netbanking, you will see hdfc link on google and after reaching hdfc bank page left side, you can see customer id, you can write your customer id and then will have to write your six digit net bank (IPIN ) password. After this, you can reach your account. If you will login first time, you can change your password and then, you can go to your hdfc netbanking account.

Benefits of HDFC Netbanking

1. HDFC Netbanking provides the facility of Viewing of Account summary, current balance, all historic transactions, mini and detailed statements.

2. You can operate your multiple accounts like Savings, Current, Credit cards, Demat, Mutual funds and Fixed deposit accounts with a single Netbanking ID.

3. Transfer of funds is also benefit in hdfc netbanking.

4. You can take backup of account statement by Downloading  of Account statements in Text, Excel and MS Money formats.

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Be Careful from Fraud in Online Schemes

These days, everybody wants to become rich fastly. For this, he wants to invest his money in that schemes which give him highest earning in very short time. There are the floor of such schemes online. So, it is very easy for a person to capture in the net of cheaters which make website and show highest earning.

Today, I am reading " Danik Jagarn Newspaper" and find that 15 Indian companies who got crores of rupees from public through online cheating and other online false earning schemes. Police captured the 13 agents and case was filed against them. So, it is my personal request not to invest in online unknown company.

Tips from Saving from Online Fraud Companies


1. Check company's reputation online by opening 2nd, 3rd and 4th page of google

2. Check the profile of company from SEBI's companies register.

3. Download Google tool bar and install in your computer, after this, you will see page rank button on your google tool bar. When you open the home page of that company, if company agents tell you that it is operating the online business from 10 years but if its page rank is showing zero it means in the eyes of Google, its quality is very low. This is the sign that company is cheating online. So, never deal with that company. If a company whose page rank is four or more, it means, it is providing quality service online.

If you will become careful, you can save your hard earned money from all these online fraud schemes.

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Machine Hour Rate Calculation

Today, I studied two more examples relating to machine hour rate calculation and came on this plate form to explain more clear about machine hour rate.

In simple words, Machine hour rate is base to calculate overheads more fastly without wasting time. We associate all overheads with using of machine and it is very easy for cost accountant to calculate total cost if we know machine hour rate and total hours of machine used. It also useful for calculating each job's machine hour cost.

For Example

Gemini enterprises undertakes three different jobs A,B and C. All of them require, the use of a special machine and also the use of a computer. The computer is hired and the hire charges work out to Rs. 420000 per annum. The expenses regarding the machine are estimated as follows:

Rent for the quarter Rs. 17500

Depreciation per annum Rs. 2,00,000

Indirect charges per annum Rs. 1,50,000

During the first month of operation the following details were taken from the job register.

Number of hours the machine was used :   A → B → C

a ) Without the use of the computer   600 → 900

b) with the use of computer 400 → 600 → 1000

You are required to compute the machine hour rate :

a) For the firm as a whole for the month when the computer was used and when the computer was not used.

b) For the individual jobs A, B and C.

Solution :

Working notes :

Ist Calculate Total Machine Hours in Different Cases


i) Total machine hours used 

600 + 900 + 400 +600 +1000 = 3500

ii) Total machine hours without the use of computers

600 +900 = 1500

iii) Total machine hours with the use of computer

400 + 600 +1000 = 2000

2nd Calculate Total Overheads

 Total overheads of the machine per month

 a) Rent 17500 /3 = 5833.33
b) Depreciation 200000 /12 = 16666.67
c) Indirect Charges 150000 / 12 = 12500

-----------------------------------------------
Total = 35000
------------------------------------------------

3rd Calculate Machine Hour Rate

= Total Overhead / Total hours machine used


In a) Situation  - Overhead for using machines without computer

Rs. 35000 / 3500 hrs = Rs. 10 per hour

In b) Situation - Overhead for using machines with computer

Rs. 35000 / 2000 = Rs. 27.50 per hour

4th Calculate Machine Hour Rate  For Each job

If you are learning cost accounting, you know what is job, job is specific work in production process which we can easily identify. In above example, there are A, B and C job. so, we can calculate machine hour for each job after calculating total Machine hour rate with  and without computer

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Explain the Computation of Machine Hour Rate With an Example

One student wrote, " Explain the computation of machine hour rate with an example." On his request, I explained the computation of machine hour rate with an example. In this example, I also explained the steps of computation of machine hour rate and also solve this problem. You can study this example at here.

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Steps to Calculate Machine Hour Rate

Machine hour rate is very useful for calculating the value of overheads and all other indirect expenses without knowing the detail of each and every overhead. Only one time, it may be difficult to calculate but after this cost accountant can easy calculate overheads on the basis of machine hour rate of overheads.

Example No. 1. Suppose, machine hour rate overhead is Rs. 5 per hour, and if machine operated 5000 hrs in a year, then we just say the total value of overheads in a year = MHR X Total hrs of Machine Used

Amount of overheads = Rs. 5 X 5000hrs = Rs. 25000

Step 1. To divide all overheads into fixed expenses and variable expenses

It will be very easy to calculate machine hour rate, if cost accountant divide total overheads into fixed overheads and variable overheads. Fixed overheads are those who do not change by changing in output while variable overheads change after changing in output. Main examples of fixed overheads are rent, lighting, salary, insurance and main examples of variable overheads are depreciation, electricity, and repairs.

Step 2. To Calculate Fixed Cost Per Hour

You have to calculate total fixed cost and total number of hours of working of machines. Both have deep relationship because we can calculate Fixed cost per hours on the basis of both.

Fixed cost per hour = Total fixed cost / Total number of hrs of working of machines

Step 3. To Calculate Variable Cost Per Hour

Either you can calculate every variable cost per hour or first calculate total variable cost and then divide it with working hours of machines.

Step 4. To Calculate Machine Hour Rate

Machine hour rate = total overheads / Total machines hours for working

or Fixed overhead or cost per hour + Variable overheads per hour

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Story Behind Re-alive of Svtuition.org

In end, today is 20th Sept. 2010 and it is also expiry date of my Accounting Education's domain svtuition.org. But, today svtuition.org has been vitalized by online support and all credit goes to Mahendrasinh Rana and Znetindia.com team. So, in this feature post, you will read about both personalities and story behind re-alive of svtuition.org.

M. Rana

1. Mahendrasinh Rana

Mahendrasinh Rana is founder and author of tallnine.com . He made this site for providing free support related to tally software ( Famous Accounting Software). He is not perfect just in this software but have sufficient experience and knowledge of hosting and Internet technology. Moreover, he is a nice personality who is always ready to help online to all those who are needy and helpless.

There is great contribution of Mahendrasinh Rana who just read my one content "complaint against PNB Bank" in which I told the reason of expiry of my domain on 19th Sept. 2010 and asked help. He came and commented for my help. After this, I joined him with google talk at his id  mkr2005@gmail.com where he told me about transfer of domain registry. Because, my background is commerce, so I did not know about a, b, and c of transfer of domain registry and then he told me about it step by step and talked me up to midnight and also referred me znetindia.com who accepts Indian currency with wide method of its payment of transfer and after paying znetindia for two years fees of domain transfer and renew through my MasterCard on 9th sept. 2010. Even after this, process of transfer was not starting, I again took the help from him. He also want to check its control panel but due to my weakness or low sense to identify real online people, I did not give id and password to such honest person in the word. But, even, after this, he forgave my mistake as child and he helped me to change DNS Setting at night by opening his own control panel. After this, today even after expiry of this domain svtuition.org is living and taking breathing online and its all credit goes to Mr. Mahendrasinh Rana. I am personally thankful to him for his free help. This blog was started from 19 Jan. 2008 and now it is reaching its 3rd birthday which will be on next 19th Jan. 2011 and more than 60,000 page views are done by online users. I recommend all these users to take the help from him when they need and follow his guidance. Your problem will surely solved.

2. Znetindia.Com Team

Znetindia.com Logo

Znetindia.com  is India based hosting company who also registers and transfers domain. http://www.znetindia.com/  link was given me by Mr. M. Rana and before taking decision, I did small search on this company and on 3rd and 4th page on google.com, I found some negative comments on his services. But, even this, I have taken the decision by trusting on given reference. After two days of payment, I confirmed authority code which I got my past enom registrar. In transferring domain process, whole Znetindia.com team helped me and supported me that my domain will transfer before its expiry on 19th Sept. 2010 through znetchat and connecting me on my mobile no. 4 and 5times. I am specially thankful to its team's one member whose name is Anupama Kumawat who handled my case personally.

A. Bhatia

Sorry, I forget to thanks One more personality who also helped me yesterday to check my DNS through teamviewer ( a software for remote support). His name is Anurag Bhatia. He met me Google Apps forum because he is top contributor there and after going to his site anuragbhatia.com, I got his id me@anuragbhatia.com  and after few minute talk and remembering him linkedin's professional network's friendship, he did ready to help me. So, I am also heartily thankful to him for his free support.



In end, I only say that all above personalities help me on the basis of humanity without any selfish motive. All of us should learn from them because, they are providing real education online.

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Difference between IFRS and IAS

One of the Reader of Accounting Education  has posted the comment on one of my post Difference between GAAP and IFRS  and asked difference between IFRS and IAS.

Dear Reader both IFRS and IAS are accounting standards which has been made  for proper working of accounting by accountants in any company. IFRS means international financial reporting standards, while, IAS means international accounting standards. Both are used US and other advance countries but there are also many difference between IFRS and IAS.

1. All the accounting standards which were made between 1973 and 2001, are called AIS and all accounting standards which were after 2001, are called IFRS.

2. IAS were made by International Accounting Standards Committee (IASC) and IFRS were made by International Accounting Standards Board (IASB).

3. Some new rules were made in IFRS which was not in IAS like rules regarding identification, measurement, presentation and disclosure of non-current assets held for sale.

4. Total IAS are 41 and still total IFRS are 9.

5. differences between IAS 39 and IFRS 9

→ Classification of equity instruments

a) IAS - Fair Value Through Profit & Loss (FVPL)

Available-for-sale (AFS)

b) IFRS - Fair Value Through Profit & Loss (FVPL)

Fair Value Through Other Comprehensive Income link

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New Invention in Online Learning

Now online learning became more easy because of one new invention. This invention name is Teamviewer. This is a software with this two person can share each other window. Suppose, you are student and I am teacher. I have to teach tally online. You have tally software but you do not have knowledge, how to operate it. But I am expert of it. Now, we both download teamviewer by simple search of download teamviewer on google. Then, you give me your teamviewer id and password. After this, I can see your window and use your mouse. Now, you just what will I do in the front of you.

It means, now after this invention to teach computer and other subjects to a student who is living far from you, has become more easy.

{ Note : You can also sign out this network at anytime for securing your privacy and next time, your password will be changed by this software. }

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Blogger Content Policy (Simplified)

Great ! Blogger is Free to Write But Just Follow Blogger Content Policy

You will wonder to listen that if you have a blog on blogspot.com, you can save Rs. 3000 per year for hosting and domain name because blogger is free service of Google Inc. but you can not publish everything on blogger’s blog. I am using same blogger for hosting purpose, so, I printed blogger content policy yesterday and today morning, I read everything and for awareness purpose, I am trying to simplify it. Under blogger content policy, you can not publish following contents in blogger, if you do, it will be against blogger content policy and your blogger and google account will be disable. Blogger team visits the blogs and if it sees against their policy, it takes against that blogger. This blogger content policy has been made for securing the bad and contrary effect on the freedom of expression.

1. Adult Contents

All adult contents are against blogger content policy.

2. Child Pornography Contents

You can write child pornography contents on blogger.

3. Hate Speech

If there is any enemy of you and for revenge purpose, you can not write or tell your hate speech by making blog.

4. Crude Contents

All contents like close up images of gunshot and accident scenes without additional details will be crude contents and it will be against blogger content policy.

5. Violence

You have no right to threaten other people by taking the help of blogger and passing the comment on other blogs.

6. Copyright

You can not copy from copyrighted contents.

7. Personal and Confidential Information

You have no right to show personal and confidential information on your blog.

8. Impersonating Others

You can not mislead or confuse others by showing your false identity.

9. Illegal Activities

Don’t write illegal contents on google blogger platform.

10. Spam

Don’t write spam posts and spam comments. Both are illegal under blogger’s content policy.

11. Malware and Viruses

Do not create blogs that transmit viruses. This is strictly banned.

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RBI Revised Repo and Reverse Repo Rates

For controlling inflation, RBI revised interest rates yesterday. It is fifth time when, RBI has increased Repo and Reverse Repo rate. Repo rate is an interest rate which pays commercial bank to RBI, when it takes loan from RBI and reverse repo rate is that interest rate which pays by RBI, if it takes loan from commercial bank. Because, RBI has increased both repo and reverse repo rate, to take loan has become costly.

Repo Rate has been increased by 0.25%


Reverse Repo Rate has been increased by 0.5%

Main Aim to increase these interest rates

1) To reduce inflation from 8.5% to 6%

2.) To attract more depositors because after increasing these rates, it can be expected that depositor will earn more on their fixed deposits.

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My Today Activity

Today, my domain successfully transferred from enom to znetindia.com. This was informed by one of its employee. I tried to re-alive my domain svtuition.org on 9/9/2010. With this, I saved from expiry of svtuition.org which has to do day after tomorrow. It is good news for me and all of you who are interested to read svtuition.org. But to transfer to znetindia.com is not sufficient for me to work on it because now, I have to change its DNS setting. I want to tell you that I publish this domain on blogger hosting and also using Google Apps and transfer domain name from one registrar to other registrar.

Today, two big works, I am doing

1st To Verify Google Apps Authorisation

For this, I sent email to tech support of znetindia. Actually, Google apps can verify my ownership with two way. First by uploading its code in one of html page of svtuition. I think it is impossible in blogging plateform.

Second way is to change CNAME records by going to my domain management in znetindia.com. That is the reason, I sent email to tech support of znetindia.com and waiting for tech support's answer.

2nd To Change NS Record

Actually, on this point, M. Rana of tallynine.com is helping me, because, I am new  in that type of work. I want to host still blogging plate form and to operate my blog from there. I spent also my time to read contents on Google Apps help center, Google blogger help center. To see YouTube video about how to varify domain ownership etc. Still work is continue. If all work will done, I will update. If you are deep knowledge about changing DNS setting in case of transfer of Custom domain, please tell me at vinod@svtuition.org

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Overhead Accounting

Overhead accounting is the concept of cost accounting. In overhead accounting, we collects all overhead, then we classify it. Then we do its departmentalisation. In end, we allocate and apportionment of overhead expenses.

1st Step : Collection of Different Overhead Expenses

All overhead expenses can not be collected from one source. There are following different main sources from where we collect production overheads for adding it in overhead account.

a) Store : Store is place where we keep our raw material. If it is the nature of indirect material, then from the information of order nos and its receipts of issue, we collect all indirect material consumption as production overheads.

b) Wages analysis book : With wage analysis book, we can collect all indirect labour cost and add in overhead account.

c) Invoices of other indirect expenses : For cash book and other invoices investigation, we collect other indirect expenses and add it in  overhead account.

2nd Step : Departmentalisation of overhead

We effective control on factory, we divide it in departments and cost centers. There may be repair department, power department, tool department and many more. We try to departmentalize of overheads according to nature of expenses.

3rd Step : Allocation and Apportionment of overhead expenses

For proper accounting of overhead, we need to allocate and apportionment of overhead expenses

a) Allocation of overhead expenses

If any overhead expense is related to any particular department, it is easy to allocate to that department or cost center. Suppose, we have given overtime salary to a particular department. We can allocate it to that specific department. In future, for reducing, it we can do more control on that specific department.

b) Apportionment of overhead expenses

If there is an overhead which is not allocated in specific department, we apportionment of that overhead. Suppose, rent for plant which is used by two departments. So, two know whether two department are using that plant effective way, we have to apportionment of overheads on specific basis. In this example, we can calculate rent of particular department by calculating the area of each department. Suppose, if A department is using 70% area, then it means 70% of rent is relating to A department and rest 30% of rent relating to B department.

 Basis of apportionment of overhead expenses may be direct labour hours, nos. of labours, capital values, machine hours, light points, k.w. hours, and other technical estimations.

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Conference With Govt. Teacher of Kendriya Vidyalaya

Few minute ago, I did conference with Govt. teacher of kendriya Vidyalaya in Chhattisgarh. His name is vishwajeet.chakravorty. He is music teacher and he teaches music at higher classes. But he is interested to learn online accounting through me. But due to working on other big project. I did the reference of my other online friend. But, I promised him, if they face any problem, I will help him free of cost. If you want also my free online help, you can add me at vinod@svtuition.org

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Win a Laptop Online

Are you student and want to get laptop online free of cost? It is very easy. Just go to Couplemoney.com  and follow the simple conditions of it and win a laptop. Time is very less and it 48 hrs for participation. You can read its term and conditions at here.

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How to Develop Personality

Before knowing " How to develop personality", you should now following two question in your student life.

Q:- 1st : How many peoples have/had developed their personalities?

Ans. I think, very very few peoples have/had reached at this level. I can say that one person out of one lakh can succeed to develop the personality  because it is so difficult task.

Q:- 2nd : What is the measure which can check you and your personality?

Ans. In this world, there is no equipment who can measure and tell you whether your personality has developed or not. But, we can estimate your personality from simple google search result. Google search result shows, how many peoples from the world are connected with you after affecting from your personality. If we talk about great personality, Mahatma Gandhi's search result will be highest which is 28,10,000. It means largest number of people affected from his way of living life.

Now, we tell you,  how can you develop your personality 

1. Honesty in Performing Your Duty

Either you may be in your own business or you may be in job, but everywhere you have to perform your duty honestly because if you will cheat in performing your duty, you can not develop your personality. Today, I went to Punjab National bank for knowing 13 days old check whether it has collected by PNB or not. But, even after 13 days check is still in PNB and today they are ready for sending it for collection. In my eye, all the employee who are not performing their duty honestly, never develop their personality. Why am I say this about any body or why did anybody say about any other person. Your dedication toward your duty can save your whole organisation from going to fall.

2. Strength is Life and and Weakness is Death

You are still student and at that time, if you starts to develop your personality, you can make great person after sometime. Never forget strength is life and weakness is death. Never disturb your life with your weakness. You should feel death if you feel weakness in yourself. Just breathing is not life, life is name power in your hand, brain and soul. Every time, you should ready to do the work.

3. Be not Afraid from Anything

If you afraid from anything, it means you are not living in real personality. Try and try that you will not fear from anything. Who can kill you, if God is ready to save you? Fight and fight, never fear from death. Death is just leaving of body cloth and birth is just wearing of new body cloth. This thinking can make you brave.

4. What Education do we want?

We want that education by which character is formed, strength of mind is increased, the intellect is expanded, and by which one can stand on one's own feet.

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Methods of Segregation Semi Variable Cost into Fixed Cost and Variable Cost

To segregate semi variable cost into fixed cost and variable cost is necessary because with this, we can add fixed cost proportion in total fixed cost and variable cost proportion in total variable cost. So, with following method, we can carry out this.

1. Graphical Method

With graphical method, we draw the graphic line of semi variable cost by taking output on x'ax and total semi variable cost at y'ax. After this, we do judgement and select a point where will be our fixed cost in semi variable cost. After this, we draw the line of best fit. This line shows the fixed cost which will not be changed after changing output.

2. High Points and Low Points Method

Under this method, we calculate total sale and total cost at highest level of production. Then we calculate total sale and total cost at lowest level of production. Because, semi variable cost have both variable and fixed cost. We first calculate variable rate with following formula :

=  Excess of total cost  / Excess Sale X 100

This rate shows variable cost of sale value. By using this rate, we also calculate variable cost of sale at highest level. Now, same variable cost will be deducted from total cost at the highest level of production. Reminder will be fixed cost.

For example

sale at higest highest level of production 140000
sale at lowest level of production 80000
---------------------------------------------
Excess sale =  60000
---------------------------------------------

total cost at highest level of production 72000
total cost at lowest level of production 60000

-----------------------------------------------

Excess cost = 12000
-------------------------------------------------

Variable cost rate = 12000/60000 X 100 = 20% of sale

Variable cost at highest level of production = 140000 X 20% = 28000

Fixed cost = Rs. 72000 - Rs. 28000

= Rs. 44000

3. Analytical Method

Under this method, cost accountant does some analysis for dividing semi variable cost into fixed cost and variable cost. After this, he calculate fixed cost on that rate which analyzed. Suppose, a cost accountant says that in the total semi variable cost, there may be 30% fixed cost and  70% variable cost. Now total semi variable cost will be divided on this basis.

If production level will increase, variable cost's proportion will increase with same rate. But fixed cost will not change.

4. Level of Activity Method

In this method, we compare two level of production with the amount of expenses in these levels.

Variable cost will be calculated with following method

Change in semi variable cost / Change in production volume

5. Least Square Method

This is statistical method in which we use this method for calculating a line of best fit. This method is based on the linear equation y = mx +c , y is total cost, x is volume of output and c is total fixed cost. By solving this equation mathematically, we can calculate variable cost(M) at different level of production.

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Overheads

In cost accounting, overheads are those indirect expenses which are used for operating production. In overheads we can not include direct material, direct labor and direct expenses. Rent of plant, electricity bill of factory, salary of office employees, taxes, telephone bills, supplies, repairs and legal fees are overheads.

Cost Accounting Standards 3 (CAS - 3 )  define overhead with following way

Overheads comprise of indirect materials, indirect employee costs and indirect expenses which are not directly identifiable or allocable to a cost object in an economically feasible way.

We can classify overheads with following ways:


1.Functional classification

a) Factory overheads
b) Office overheads
c) Selling and distribution overheads
d) Research and development overheads

2.Classification on the nature of expenditure

a) Fixed expenses
b) Variable expenses
c) Semi Variable expenses

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How to Teach Blind Children

To teach blind children is challenging to all teachers who choose this profession under his special education specialization. There is no fix steps which can be followed but there are tips which will be useful to those teacher who have started to teach blind children.

1st Tip : Make Advance Learning Plan

Learning plan of blind children will be different from normal children because, they can not see and it means all plans like to show chart, to write on whiteboard and to show video tutorial will give no benefit in learning process. These children need touching and listening tutorials. So, before teaching blind children, teacher has to record the audio in such a way that it covers the need of learning what he wants to teach to blind children.

2nd Tip : Start Teaching with Music

Many researches on teaching of blind children and to teach them with music are giving better result. Suppose, you want to teach basics of accounting. You can teach it with background music. Music must be slow and will be meditative.

3rd Tip :  To Help Physically For  Exercising

For increasing the power of other parts of blind children, teachers should help blind children physically for exercising. In this exercise, teachers can move hand and legs of blind children. With this, they can better balance their body and they can also fulfil the weakness of blindness with other part's strength.

4th Tip : To Love Blind Children

Blind children need the love of teacher. When I taught in SOS children Village, a 5 years old girl brought by authorities from slum area. She had neither eyes to watch nor she can listen the voice. But only the love  which was given by us, after 2 years, she started to feel other. I think, if we spend our time with such children and give them love and financial support in the form of donation, they can easily learn what we want to teach. They can only talk with us if they like us.


5th Tip : To Give Motivation and Reward

A blind child has no meaning of world because he can see only blackness. You should always give them motivation and reward when they give correct answer. Group discussion can provide better learning environment for blind children.

6th Tip : BBC Radio Teaching Way for Blind Children

BBC is live Radio 24 hrs, 7 days and 12 months. I liked it very much but it is good teaching way for blind children, if you open your laptop or computer and connect it with Internet. After this, you have to  open http://www.bbc.co.uk/radio/  and save it favorites of Internet explorers or bookmark it. Your blind children can learn everything from it means they can learn world economy news, history, science and current affairs. Even daily listening practice, they can become the perfect in English. They can use it in call centers.

7th Tip : To Teach Career and Vocational Courses to Blind Children

They can work as reporter, telephone operator, Speaker on Radio and customer care officer, if teacher will help to teach about them. Such children should also encourage to work on computer and its typing. Computer typing is skill and even a blind child can type more faster than a normal child. If you stand a single child on his foot, it means you are successful as teacher.



Even Blind child can expert for playing piano and with this, he can earn money.



8th Tip Learn Teaching Tricks From YouTube Non-profit activities

There are large number of social institute who are operating blind children schools and upload teaching and educational video in YouTube non-profit activities tag. By searching this tag, you can watch these videos and learn, how to teach blind children. One of video is given below in which you will see the training visually impaired students with additional disabilities. The School also provides vital early intervention and outreach services to visually impaired students, with or without additional challenges, throughout western Pennsylvania.

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Try to Re-alive Svtuition.org

As reader of this site, you know that svtuition.org is expiring on 20th Sept. 2010. Now, I am starting process to re-alive http://www.svtuition.org/ , for this, I have taken two action.

1st Try : To Follow the Suggestion One of My Facebook Friend

One of my facebook friend Mahendra Ji suggested  me the idea by guiding me through google talk last night. In this suggestion, he told me to transfer my domain name to those registrar who accept my payment through check or any other way. He suggested  me the Indian web hosting site http://www.znetindia.com/ for transferring my domain svtuition.org.  He also wants to provide its payment. Thanks for him for his suggestion and support. Indeed, I need such online friends. Today, I paid znetindia.com for domain transfer fees Rs. 976.03 for two years and also provided them its authentication code which I got from enom registrar. Few minutes ago, I got also guidance from Mahendra Ji at google talk because he has 3 years experience in web hosting and domain management.

2nd Try : To Open Account in HDFC for getting HDFC Visa Card

After failing PNB international debit card with MasterCard logo, I wrote one email to MasterCard Inc. and in reply, they said that there is not mistake of MasterCard company. It means some technical problem in PNB for declining the my payment. So, I am thinking to open HDFC bank account for getting Visa and it will be activated within 3 days.

From doing above to action, my main aim is to stop deadline of this site, so that all readers and fans can continually visit without getting 404 error of opening its pages after 20th sept. 2010. If you any other idea to pay for domain please tell me at vinod@svtuition.org

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Complaint Against PNB Bank

This website will expire on 20th Sept. 2010 and no one can see it online due to not paying 10$, even I have sufficient amount in my PNB bank account. I have also tried lots of time to pay 10$ domain name fees. I have also made 3D secure password.  My PNB international debit card has failed due to not giving authority for paying this small amount.

So, I have decided to write the letter to RBI in which I have written complaint against PNB bank. You can read this letter to RBI at here. If you have any idea to pay, please suggest  me at vinod@svtuition.org

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Teachers Day 5th Sept 2010

First of all, we salute to all great teachers of the world who are lighting our life with their knowledge. Today is 5th sept. 2010. This day is celebrated as teachers day. Teacher's Day history and origin in India lies in the birthday of Dr. Radhakrishnan who was great teacher and worked hard for development in the field of teaching and education.

In the life of student, the effect of teacher can not be ignored. He get all his education from his teacher. So, the position of teacher is respectable everywhere in the world. At this day, teacher's also should take important decisions for development of students which can be explained in following ways:

1. To teach to poor children

On teachers day, teachers should make target to teach one poor child. With this, they can become to get real honour of this day.

2. To adopt orphan and mental retarded children

Teachers also should adopt one orphan and mental retarded child. With this contribution, they can wash the mark of all evils of Indian society.

3. To encourage the students to ask questions

Teacher can become only successful, if his students have learned to ask questions because students can ask only questions if they have confidence and they feel teacher as one of member of their family.

4. To guide the society

There are lots of evils are spreading in the society. Teachers can guide society to leave all these evils.

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Source of Finance

In management accounting, source of finance provides the power to company to buy fixed and current assets and pay loans. In other words, without source of finance, it may be difficult for company to operate the business. For starting and surviving the business, we need fixed and current capital and source of finance can give us these capitals, with fixed capital, we buy fixed assets and with current capital or working capital, we pay debt and buy current assets. Sources of finance may be depend on the financial requirement. Short term financial requirement can be fulfilled from bank credit and customer’s credit and long term financial requirement can be fulfilled from shares and debentures. Company can also use internal sources and external sources.

source finance

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Following are the main sources of finance: -

Equity

 Debt

Bond

Credits

Advances

Bank Finance

 Public Deposits

Retained Earning

Mutual fund

Hedge Fund

Venture Capital

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How to Teach Accounting Online

Live Teaching Accounting Online by a professional Teacher

To teach accounting online is new profession which is not only new source of earning of 6 figure dollars  but with this, accounting teachers can learn new innovations of Internet. In teaching accounting online, accounting teachers needs not to go school or college for taking the class. Before teaching accounting online, to teach mathematics online has become so popular. Maths teachers have already become full time online maths teachers and USA's students are learning maths through Indians. After this, Indian accounting teachers have started to teach with this way and some of them also succeeded in this new profession.

Now, I come on the point, what are steps and tips you need for becoming successful online accounting teachers which I am discussing in following process.

1st Step : To Choose Specific Area of Accounting :-

You can not succeed in all area of accounting , if you want to teach accounting online. Take any one area of accounting and try to best for becoming specialize in it. These area may be divided into basic and financial accounting, cost and management accounting. To teach accounting at basic level, teachers should have capability to solve the problems relating to financial accounting. Some teachers may have good experience in offline cost accounting and management accounting teaching. They need just to convert their skills in online environment where there will no student physically in teacher's classroom but lots of students are ready to learn from you with the help of visual classroom technique.

2nd Step : What do You Need for Teaching Accounting Online

a) Website : In which you can show about yourself, your skills, your experience. You can use ready made google site by paying annual charge of google apps. It is best for making educational website.

b) Advertising : Your students may be all over the world. But how can they reach to you. Answer is clear, they can reach by searching on Google. So, you can buy text links from Google AdWords and by this advertising, you can get the students. These days, google is offering Rs. 1500 free advertising for educational sites, you can take this benefit also.

3rd Step : Demo Classes

5 to 10 video of demo classes, you have to make in which you can show how to make journal entries, final accounts, or to teach any topic of accounting. Before learning from you, your students will want to know your way of teaching. You can also show your accounting teaching skills by promoting you accounting video by advertising on YouTube.

4th Step : To Learn Text, Audio and Video Conferencing

To teach accounting online, you have to become perfect text, audio and video conferencing. You also need electric pen which can be used for live answer of accounting problems of students.

5th Step : To Understand Different Time Zones

To understand time zones of different countries is very important for you to teach accounting online at same time to all the students who live in different country. You can learn about this at here.

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Most Popular Accounting Questions in August 2010

Following are the most popular questions of AccountingCoach's blog. We have reviewed its answers and written below. Read previous month's review at here.

Q: - 1 How do you balance a checkbook?

Ans. There is only single way of balancing a checkbook. In that way, you have to compare your bank statement with your bank check book. If there is mistake, we can find from them and will start to recognize without any delay. If you want to reconciliation of whole passbook with your bank account, you will get more reasons of not matching bank account’s balance with your passbook’s balance.

Q:- 2. What is the difference between residual value, salvage value, and scrap value?

Ans. Professor explained that all terms are used to know the value at the end of useful life of any fixed asset. Residual value is expected value of fixed assets which have been taken on lease by us. At the end of lease we calculate residual value.


Q:- 3. What is the difference between an accrual and a deferral?

Ans. Accrual means outstanding, both expenses and revenue may be outstanding. Accrual expenses means that expenses which is due but not paid and accrual revenue means income earned but not received. Deferral expenses means expenses paid in advance but due in future. So, it is related to next accounting period. Deferral revenue means income received in advance but it will earn in next accounting period.

Q:- 4. What is the difference between the cash basis and the accrual
basis of accounting?

Ans. Cash basis accounting and accrual basis accounting are different on the basis of record of transaction. In cash basis accounting, a transaction will be recorded when cash amount will be paid or will be received. But in accrual basis of accounting, it is not basic condition of recording of transaction. All expenses will be recorded when it will be due whether paid or not and all income will be recorded when income earned whether received or not under accrual basis of accounting.


Q:- 5. What is the difference between an implicit cost and an
explicit cost?

Ans. Implicit cost which we can not show as separated cost. Simple example of implicit cost is the cost of salary of businessman, if he works in his own small business. At that time, business will not pay him salary. So, it is implicit cost of business, but same time, if he works in his company type business, he has right to get salary and it will be explicit cost of his company type business. There is no need to record implicit cost in business but it is need to record explicit cost in books of business.

Q:- 6. What is a rolling budget?

Ans. A rolling budget is also known as a continuous budget. If businessman continues the business for next financial year, it will become rolling budget. In case capital expenditure, company can make 5 years rolling budget.

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3D Password

What is 3D password?

Almost  all the Indian banks started 3D password service for security of buyer who wants to buy online or pay online.

Why is 3D password needed?

Ans. Before compulsory this password, anyone can go to online payment option and after mentioning master card or debit card of bank and CVC or CVV code, goods can bought or payment of any product can be done. Same way, I did the payment of my svtuition.org domain to google checkout for sept. 2009 to sept. 2010. But now system is totally changed. You have to go your bank's site and generate 3d password for more secure authentication. Now, I have to pay again for domain fees for sept 2010 to sept 2011 but my order declined or  failed due to this reason. So, today, I went to PNB and choose 3D secure service and generate password.

{ Note: Like PNB, SBI also started 3D secure services for verified by Visa.Verified by Visa is a new service that will let you use a personal password with your State Bank of India Visa card, giving you added assurance that only you can use your State Bank of India Visa card to make purchases over the Internet. }

How to Create 3D password for my master card?

We already told you that your online payment will fail, if you will create 3D password, so for generating 3D password, you have to go your bank's website and then, click 3D secure service and then write your card number, CVV, pin no., and write your password and rewrite it and then click ok or submit. After this you will get thank you message.

How can I change 3D password?

After writing your card number and password and click login, you will reach my account where you can change your 3d password.

When will I buy online or pay online  after generating 3D Password?

I asked same question from PNB's customer card no. 18001802222 and he said that anyone can buy online or pay online after 24 hours. It means, I have to again pay tomorrow evening.

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