Marathon class | CA inter Costing

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[00:04:51]Good evening my dear students.

[00:04:53]Hope you have returned group one examination well.

[00:04:57]Now it's a time for you to start your preparation for group two.

[00:05:04]Don't waste what and all happened in the previous examination. Don't do any research on that. Don't put even to do the evaluation for post exam. That is what was the group one examination already countdown started with respect to your upcoming examination.

[00:05:22]Always remember winning the war is more important than winning the battle.

[00:05:29]Each and every examination is called a battle. Ultimately who is going to clear the entire exam that's entire inter as a whole? That is a war for you. Therefore sometime accounts may be tough, law may be easy, PT may be tough like that quarter one paper may be easy, one paper may be tough. Ultimately combine together whether you have cleared group one or group two or both that is more important. So whatever the hiccup it may be don't quit the examination at any cost. Who knows even the toughest paper valuation will be moderate. You may have the chance to get 40 plus and next examination that is what next paper maybe the easy paper you may have the chance to get above 60 also. It is not in your hand. So do your duty without do your duty without the research. Let us start our preparation with respect to costing paper.

[00:06:26]We are having maximum one and a half day strategy with respect to preparation of the costing paper.

[00:06:33]Today night you may have the house to study with respect to costing part.

[00:06:39]Tomorrow full day you are having it and the day after tomorrow the morning till you're going to go for the examination you may have that time. So roughly you may have one and a half one and a half days within that one and a half days you have to complete entire paper. So how we have to prepare that is what important.

[00:07:01]Yeah definitely we clear don't worry now today from today onwards that is tonight onwards you have to prepare you know examination question paper pattern accordingly we can be the question prepare the strategy you know with respect to exam question paper pattern part one and part two two parts are there in the costing paper part one is a MCQ part 30 mark is awarded for the MCQ part case scenario based MCQs and part two totally five questions are there out of five question any four questions you have to write out of this first question is a compulsory questionage for the compulsory question is 14 marks remaining questions 2 3 4 5 and six out of five question any one question out there that is any One question is a choice question. Any four questions you have to write. Out of five question you can write four questions.

[00:08:07]Each question carries 14 marks. So the first part two first question compulsory question also 14 mark. Remaining question out of any four questions you have to write each question carries 14 mark. So totally 56 mark plus 14 mark.

[00:08:21]Total marks comes to 100. This is the examination question paper.

[00:08:25]Now we are addressing from the last question. What is the last question?

[00:08:29]Question number six.

[00:08:30]Sixth question is a theory question.

[00:08:33]With respect to theory question, there is no amendment at all. With respect to costing theory part, most of the students failing in the examination because of they are not studying the theory part, they are not touching the sixth question.

[00:08:45]It is always advisable to address the sixth question because confirmed mark happily can get 14 marks coming. Even worst to come worst case normal load you'll get 10 to 11 mark happily can get within less time because whatever the questions they are asking the last two question theory question everything copy paste from the previous examination mode even if you're going to post examination question paper alone that is more than sufficient to score 14 marks if you don't have any post exam question paper you can text me DM direct message you can WhatsApp me so that I will send the all the question papers and s receptive stand for the first examination you still. So then the last question theory you can complete tonight. So how we have to address the fourth four last question if you're going to address means tonight if you're going to sleep happily above one confirmed question 14 marks in my package peacefully can sleep.

[00:09:40]If you see the specialtity of the costing paper or in this XC examination as a whole part 30 mark is MCQ in part two first question 14 marks compulsory question both are compulsory MCQ also compulsory 14 marks also compulsory totally how many marks compulsory 30 + 14 is equal to 44 marks roughly 50% of the question paper it's compulsory understood or not now if you are not studying the theory part Then entire paper is a compulsory only for because you yourself are vomiting the choice you are not studying the theory part always remember when compared to practical problem theory is easy theory you can easily can score especially in cost even one problem small twist is there that's all that you can omit as a choice question you can address a sixth question theory question happily can score highest mark therefore prepare this strategy most of my students cleared with a good mark above 80 it's purely based on what they are touching the a part proper. So tonight we can complete not much time at all. Tonight you can complete to the text possible all the post exam questions even I will also send you the what PDF if you want all post exam questions and tonight we are going now we are going to discuss quickly how we have to address the post exam theory part. Now with respect to strategy concern how to prepare for the upcoming period already we have discussed now we are going to discuss post exam theory and all the formulas and formula all the formulas and format should be there your fingertips in examination only thinking only inking time not thinking time therefore inking time only have to improve for that everything should be there in your fingertips what what should be there in your fingertip Because within three hours covering the entire 100 mark is a difficult part.

[00:11:34]Therefore for that you have to segregate the part into controllable and uncontrol.

[00:11:41]Controllable represent what? What and all within my control. I should not think in the examination hall.

[00:11:46]Uncontrollable decision making question practical question. Clearly you have to think and write that is beyond your control. So what and all within your control theory part within your control direct theory question distinguish between theory question all the formula formats those things and all in examination you should not think at all thinking time only the moment you saw immediately you should be the right area how many points are there as it is you have to write what about the format what is all safe formula what is roen formula what is economic ordering point what's the minimum level maximum level budgetary control format reconcilation format everything should be that your fingertips Within less time you can complete entire paper 100 mark easily can be. So tonight we are going to address the report part as well as all the for tomorrow morning. Tomorrow morning clear 6:30 to 9 we are going to discuss chapter 2 to chapter 5 few post exam question like RP model so that we can cover all the areas with quickion question and answer solution part including solution part we are going to discuss and we'll have the interactive section if you have any doubts also you can read the letter so that I can help you why 69 thereafter you need some time for you to do the revision whatever I discuss in the class may not be sufficient right the second chapter 2 chapter 3 chapter 4 and chapter 5. You need some time for it to do the one more revision. Okay? Few more problem. So after completion of 6:30 to 9 or 9:30, I will again I'll catch you from 1:30 to 3:30 p.m. Chapter 6 to chapter 9 I'll have a privation based on that you can do the revision for your own revision part from your side. Again I will catch you in the evening 7:00 to 9:00. Okay.

[00:13:27]Chapter 10 to chapter 12 we have the Piction and next day morning 11th morning 6:30 to 9 again I will catch you 13th and 14th chapter and examination tips also so totally we having 14 chapter in this speed if you are going to what address all the areas first one we are not omitting any chapter right you can have that better grip over because one question consist of one one question consist of more than one sub question fourth question fourth question A fourth question B fourth question C will be Who knows? Fourth question A may be the process costing. Fourth question B may be the standard costing. Fourth question C may be the material cost. If you are not studying the process costing or material costing then the fourth question to it or not. Therefore all the whatever the loss mark is a loss for.

[00:14:14]Therefore you are not afford to omit anything in the professional course to that possible complete all the chapter.

[00:14:20]Clear quickly we can check. Hope you understood the revision strategy for the runoff days. Okay. Tonight theory as well as all the formula tomorrow chapter 2 to chapter 12 because chapter one is a basic concept theory only chapter 2 to chapter 12 and the next day morning 13th and 14th chapter you're going to have the correction all are happy kindly put the thumbs up so that I can understand whether you are hearing properly or not all are happy with the revision chat thank you ladies Thank you. Thank you.

[00:15:02]Yes.

[00:15:05]Now we can start with theory part division post exam theory part in general with respect to theory each point carries half a mark half a mark.

[00:15:18]Therefore if it is a four mark question it is better to write yeah it is better to it better to write eight points. So I'll repeat each point carries half a mark. Okay. In that angle your preparation should be there. Don't overdump the theory part also. Don't overrite what is that you can write and read the question twice. Understand the question and address the answer part properly. Just like that you should not vomit. What are the answer? Okay. What are the objectives of costing? Very frequently asked question. Three more question. Six points are why we need a costing for the purpose of attainment of cost. Without knowing cost we can't push to fix the selling price. Therefore for the purpose of fixation of selling price difference between selling price and the cost is called the profit. Thereforement of profit if you want to minimize the cost controlled cost reduction and based on we going to the decision decision making purpose. These are all what six objectives of costing. Then cost reduction. What are the three-fold assumption in cost reduction? Definition of the cost reduction itself they saying saying as a three-fold assumption. What are the three-fold assumption? Permanent savings savings in cost per unit without affecting the quality of the product is called cost reduction. The very frequently asked questions different between cost action and cost control.

[00:16:31]What is called cost reduction? What is called cost control? Five more question.

[00:16:34]Cost reduction represent real and permanent savings in cost per unit of the product without affecting the quality of the product is called cost reduction. Whereas cost control represent temporary savings in overall total cost of the product. that quality may going to get compromised. Not always, chances are there may going to get compromised. With respect to cost reduction, implement the cost reduction, we need technically qualified person should have the knowledge of the business is important. Whereas cost control to implement the cost control, we need a good administrator with with leadership quality is important. Cost reduction is a corrective punchion.

[00:17:11]Whereas cost control is a preventive function. Cost reduction is a dynamic approach. There is no dynamism with respect to cost control. Cost reduction it's a continuous process whereas cost control once object once object has been achieved we can stop a cost example with respect to cost reduction tools for cost reductions are value engineering value analysis time and motion study clear just in time these are all what price negotiation the raw material these are all what example with respect to cost action whereas cost control example budgetary control standard costing these are the tools or cost are with me or not this is what the difference between cost fraction and cost clear then even for your kind information each and every chapter wise I have I'm having the PDF notes also for a quick revision purpose both practical problem as well as theory included in chapter wise if you want you can message me I'll send the one that particular chapters also okay whatever the chapter you are not comfortable you can tell me or all the chapter you want also you can be the question so that I'll give all the chapters happily you can complete within quick revision you can complete entire chapters Then two users of cost and management account who are all going to be the user. One is internal user another one is called external user. Internal within the company is internal user policy makers managers operating level staff employee. These are all internal users.

[00:18:36]External users, regulatory authorities, auditors, shareholders, creditors and lenders. These are all external users.

[00:18:46]Benefits of digital costing system recently they asked question okay attainment of digital bond digital costing system we can accurate cost it's not the time data on time spent we can the time data on resource consumption you can quickly you can be the get data on current market price we can we can data on lead time also we canain data on availability of raw material we can be the data on production product demand how much demand in the market helps to identify and eliminate nonvalidated activity. Helps to set standards. These are all what nine benefits of digital costing system. That's the simplest one general information. Okay. Next, it's nothing but costing benefit only. They asking us a digital costing system within less time you can get that's why it's called digital costing system. The same thing remodified again. They ask impact of they won't give the numbers in examination. Impact of information technology in cost accounting system. I have started with the numbers so that you can remember how many points you can find. Five mark question 10 points. Each point carries half of impact on information technology everywhere.

[00:19:56]Information technologies impact is there in costing what the impact it's the integral part of each activity insec enterprise resource pack. Aids for saving in terms of in terms of time, money and effort. Time saving, money, money saving and effort saving because of information technology saves an organization from participaring different sets of document you don't need to prepare so many document consolidated they can prepare the document those days and all carbon copy will be there 1 plus 1 1 now control C control U one time preparation is sufficient bill of material material notes are no longer required after introducing cost in information technology and cost accounting Help to shift towards J just in time is possible. Cost center and cost object are assertained with accuracy cost information can be customized.

[00:20:53]Uniformity in preparation of report helps to eliminate nonvalid.

[00:20:58]So withdrawal bond in impact of information technology with respect to cost of system. What are the three main roles of cost and management account? It provide information to management.

[00:21:10]Health for planning, measurement, evaluation and controlling and helps for cost allocation. These are all the three roles of cost.

[00:21:21]Same four functions are there with respect to cost and collection and accuration accumulation of cost.

[00:21:28]Assigning cost to cost to object set budget and standard for cost controlling and provide necessary information to the manage. These are all one four functions.

[00:21:41]Then three items in cost center.

[00:21:44]Location, person and item of equipment are called the cost center. What is called the cost center? Where we are going to incur the cost is called the cost center. So cost center it consist of location person item of equipment combination of all for the purpose of assertainment of cost and for the purpose of controlling the cost is called the cost center understood so cost center where I'm going to have the industry I need the factory factory I have to invest money so the place the location is the cost center to take care of the factory I have to appoint the people manager should be there labor should be there the person is the cost and equipment missionary and all therefore equipment is a cost center in industry as a whole all the threes are called cost center nothing but where I'm going to incur the cost is called cost center it consist of location person item of equipment it is for the purpose of attainment of cost for attaining the cost and for the purpose of controlling the cost this is for the definition of cost center next three types of cost center with respect to three types of cost one is based on manufacturing industry another one is based on non-manufacturing industry and last one is based Input output relationship bon manufacturing industry it is called production cost center and service cost center bon non-manufacturing industry personal cost center and impersonal cost center bon input output relationship it's a standard cost center and discretionary cost center the only one three types of cost centers then three limitations of cost of x1 expensive. The moment if you want to introduce costing system it's expensive requirement for reconcilation you know reconation cost accounting system separate chapter is that integral and non- integral accounting system reconcilation arises only in case of non integral accounting system not for integral accounting system I'm going to maintain cost accounting systems cost accounting record separately and the financial accounting records separately financial accounting profit may not be equal to cost opening profit in this juncture we have to do reconcilation arises only in case of one costing system okay nonal accounting system then duplication of work why duplication of work purchase of raw material I have to post the entry cost accounting also financial accounting also I have to pass sales I have to pass the entry in cost accounting also financial accounting therefore more than one time double time I have to pass entry therefore duplication is possible So these are all what three limitations of costing system. Then cost unit represent what cost unit represent it's a unit of product or service or time or combination of all for the purpose of expression of cost and for the purpose of controlling the cost. Expression of cost is important unit of product or service or where I am going to incur the cost is called cost center. How I am going to recover the cost is called center.

[00:24:54]How I going to recover the cost is called cost. How I am going to recover the cost. Factory I'm incurring the cost. The factory is the location is the cost center for out of the factory I'm producing the product by way of selling the product. I'm recovering the money.

[00:25:09]Therefore the product is the cost unit for then associates in audit firm. I'm incurring the cost. Talent associate firm is a cost center form by way of rendering services by way of rendering audits I'm collecting the recovering the money therefore the service is a cost unit form browsing center is a cost center by way of time you spend how many client what spend accordingly I'm going to collect the money the time is a cost in combination of all is called cost so cost you need to represent how I am going to recover the money it's a product or service or time or combination of All for the purpose of expression of cost and for the purpose of controlling the cost. They'll have list of industries or product and they ask you to find out cost change. With respect to list of industries for example steel industry what could be the cost you need? Kindly respond. Steel industry you know cement industry. What would the cost you need?

[00:26:20]Bus transport, passenger transport. What would the cost you need?

[00:26:27]Lori vehicle. Okay. Transport. What would the cost you need?

[00:26:33]Yes. In case of steel industry, ton number of tons is a cost. In case of cement, number of bags is a cost.

[00:26:43]How many bags cement has been produced and sold? In case of bus number of passenger kilome is a cost. In case of lorry number of 10 kilome is a cost. How we are going to express the cost is called the cost. Understood what is called the cost unit.

[00:27:01]Next eight factors for installing cost accounting system.

[00:27:06]Before installing cost accounting system what all the factors you have to consider? Objectives of the system.

[00:27:12]Scope and extent of coverage. General organization setup. Technical aspects of the concern. Attitude and behavior of the people. The manner in which different variable expenses affect the organization. The manner in which constant financial accounting could be interlocked. Availability of sufficient information.

[00:27:33]Eight factors of the Yeah. What do you want? Yes. This PDF you want you can message me. I I'll share it. Share it with you. Yes.

[00:27:43]Then five practical difficulties in installing cost of funding system. If you want to install the cost operating system, what are the difficulties are there? The first one lack of support from doc management, lack of support from accounting staff, lack of support from operating level stuff. So if there is a change, some sort of hesitation will be there. All the three levels hesitations shortage of trained staff cost of operating system. These are all one five practical difficulties while installing cost operating system.

[00:28:15]Four categories of responsibility center. What is called a responsibility center activity center of business organization interested with the special cost are known as responsibility center.

[00:28:27]It's a cost center. It consists of cost center, profit center, investment center and revenue center. So four types of responsible center. When short not on responsible center is also equal frequently as two types of differential cost with respect to cost the cost classification which the cost are broadly classed into eight basis out of any of the basis of frequency with three mark to four mark or max five mark. What are the basis in which you have to classify the cost? Time based classification, element based classification, behavior or nature or variability, relationship, controllability, normality, functionality and decision making. These are all the eight basis in which you have to classify cost. Based on time, cost can be class historical cost, current cost and predetermined cost.

[00:29:19]Byron on element, material, labor and other expenditure.

[00:29:25]Pre on behavior, fixed cost, variable cost, semivariable cost. Pre on relations, direct cost and indirect cost. Pre on controllability, controllable cost and uncontrollable cost. Pre on normality, normal cost and abnormal cost. based on functionality, production, administration, selling and distribution, research and development, pre-production and conversion cost.

[00:29:50]Based on decision making, relevant and irrelevant cost. These are the eight basis in which we have to classify the cost yet based on controller because nowadays they are not asking the question short notes on variable cost, short notes on fixed cost. Very easy.

[00:30:04]Explain the cost classification based on relationship. Four more question. So you should know based on relationship what all the costs are there. How you have to draft on the bas of relationship cost can be classed into two types. One is direct cost is indirect cost.

[00:30:22]Then you have to explain what is called direct cost. Cost which are directly attributable to producer products are called direct cost. Definition collection of all direct cost are called prime cost. Example for the direct cost direct material direct labor direct expenses.

[00:30:39]Similarly indirect cost collection costs which are indirect helps you to produce a products are called indirect costs.

[00:30:46]Collection of all indirect costs are called overhead. Thereafter you have to give the example for the production overhead selling a distribution over so that you'll get the full demand. Okay.

[00:30:56]Two types of differential cost. Okay.

[00:30:58]What is called differential cost? Change in cost due to change in level of activity is called differential cost. It can be collected into two types. One is incremental cost. Another one is decremental cost. Because of the change cost got increased that is called incremental cost. Because of this cost got decreased mean that is called one decrement.

[00:31:16]Clear? Now based on behavior you know cost can be classed fixed variable and what is called fixed cost irrespective of the production cost remain constant mean that is called fixed cost. Total cost remain constant that is called fixed cost. Depending upon the volume of production cost also going to vary mean that is called variable cost. All the way through number based on fixed variable cost they're having twist total cost remain constant irrespective of level of production mean fixed cost total cost varies according to volume of production mean that is called variable cost this total cost but but fixed cost per unit cost will vary according to volume of production in variable cost per unit cost remain constant irrespective of lot of production based on per unit cost only frequently asked questions if remain constant total cost remain constant very easy it's a fixed cost but in fixed cost total cost remain constant whereas per unit cost vary according to volume of production with respect to variable cost total cost varies according to volume of production whereas per unit cost remain constant most of the questions are based on per unit cost based on whether you are strong in the theory or not so please be care with respect to semi cost partly fixed in nature the partly variable nature is What is cost? What all the methods are there with resp to segregation of cost?

[00:32:39]Okay. Graphical method, analytical method, high point, low point method, least pair method and comparison. This all five methods of segregation of seable cost.

[00:32:51]Then seven features of good cost accounting system. If it is called a good cost accounting system, it should be tailor made. There are two kinds of one is called readym made. Another one is called tailor made. ready made you know direct available can go and buy tailor made depending upon the organization we are going to create that's why it's called tailor made it should be costing should be tailor made collected data should be accurate cooperation from all other department cost benefit should be matched it should not sacrifice the utility of including unnecessary data itself usage of network analysis faith and confidence these are all one features of good cost of context system.

[00:33:33]So two types of cost under decision making based on decision making cost can be into two types. One is relevant cost another one is irrelevant cost. Costs which are useful for the purpose of decision making that is called relevant cost. Cost which are not useful for the purpose of decision making then it is called irrelevant cost. Example for the relevant cost opportunity cost out ofhead cost differential cost incremental cost decremental cost. This all comes under one example with respect to relevant cost. Irrelevant cost s cost absorbed fixed over again committed costs under irrelevant cost. Then with respect to labor cost all are comfort with respect to basic concept kindly put the thumbs up. All are comfortable.

[00:34:20]Shall I go for labor costing employee costing? Yes.

[00:34:31]Thank you. With respect to stores record, three types of stores records are there. PIN card, stores ledger and stock control card. PIN card is a mere quantity record. Stores ledger is a combination of quantity and value based record. Stock control card near quantity record.

[00:34:54]Two parts in two bin system with respect to two parts. One is called base part.

[00:34:59]Another one is called issue part. In the bin bin means what? Container. Base part. Bottom part is called base part.

[00:35:06]Issue part. Whenever I need raw, I'm going to issue the raw material from the issue part. The moment ra come down to the extent of base part. The moment I'm going to touch the baseboard, it's a time for me to reorder. That level is called what? Reorder level. Okay. Two bin system. Then expand. HML, Val expansion based question. HML stands for high price, medium price, low price.

[00:35:32]Bed represent vital, essential and desirable item.

[00:35:38]FSN represent fast moving, slowmoving and non-moving item.

[00:35:42]G of government supply, ordinary supply, local supply and foreign supply. Sys stands for seasonal and offseason.

[00:35:52]Then three categories of inventory under par analysis. What are all the three categories? A category, B category item and C category item. It's also called ABC analysis. Also called selective stock control analysis. It's purely based on value involved. A category item high value item. Category item low value item. B category item moderate value A category item 70% of the value goes to A category item out of total value of the stock 70% value of the stocks come to A value item then 20% value for B value B category item and 10% value goes for C category with respect to quantity A category item 10% of the quantity up 10% of quantity has 70% value that is called A category B category 20% of the quantity of the stock comes value 20% value that is a B category and C category 70% quantity of the stock value only 10% that is called C category what are all the advantage of ABC analysis cost saving control by exception smooth flow standardization of we can have the better for that purpose only AB analysis then four types of material losses with respect to four type of material losses based stage scrap spoilage and defective. Four wast four types are there. Even the material losses can be broadly considered two types. Two types come one is not due to damage and is due to damage. Very frequently asked question not due to damage and due damage. Whenever they asking this type of question, scrap oil is defective or look similar students unable to write sufficient point to score them on.

[00:37:34]Therefore you have to be careful with respect to the concept not due to material loss can be broadly considered to two types not due to damage and duty damage. Under duty damage and not duty damage wastage and scrap under duty damage spoilage and defectivity. Wastage mean no resale gun then that's called wastage. Scrap means it has some resale gun. Spoilage mean not rectifiable.

[00:37:59]Defective means it's rectified.

[00:38:01]Understood. Sometime they're asking different wastage and scraps. Scraps and spoil it also. Clearly another one there absence also they're asking what is called absessence outdated. Okay. Out of fashion is called absolesence.

[00:38:16]Two types of wastage. Visible wastage and invisible wastage. In petroleum industry and all what all the waste become invisible wastage. Okay. Two types of wastage visible and invisible.

[00:38:28]Two methods of time keeping manual method and mechanical method. Under manual method advancements register and metal disc register. Under mechanical method time recording clock, tile time record, punch card and biometric system.

[00:38:44]So these are all one two different types of time keeping. What is called time keeping? Total time spent by the worker inside the factory. How many hours workers are there inside the factory?

[00:38:56]For that we are going to maintain some register. That register is called time keeping record.

[00:39:01]Then time booking. What is called time booking? First of all, worker by worker, day by day, department by department, how many hours they spend productively, that is called time booking. Five methods of time bookings are there. Job ticket, combined time and job ticket, daily time sheet, peace work and clock card. These are all one. Five methods of time booking. Job ticket, combined time and job ticket, daily time sheet, peace work and clock card. Then two methods of computation of labor turnover. What is called labor turnover? Inflow and outflow of labor force is called labor turnover. How many workers are joining in the organization? How many workers are going out from the organization?

[00:39:42]That ratio that calculation is called ratio. That called labor labor turnover.

[00:39:47]Change in labor force during a particular period of time is called labor. Always labor turnover you have to express in percentage percentage. Clear.

[00:39:57]How to compute? Two methods are there.

[00:39:58]One is without expansion method. Another one is called with expansion method. And then without expansion method three different methods are that they come to separation method, replacement method, mixed method. Under with the expansion, separation method, accession method and the flex method. Dear student, dear student, remember carefully. It's a dangerous part. In examination they won't specify the problem is based on with the expansion or without expansion.

[00:40:23]After giving the data they ask you to compute labor turnover. So with expansion without expandment three different sets of formulas are there.

[00:40:31]All right without expans separation replacement with method with expansion separation access in method. How to identify if the expansion happen I need additional work there. Whenever new recruitments are there in this question we have to solve the problem by way of with expansion. New recruitment is not there then we have to solve it by without expansion. So please be careful.

[00:40:52]Another important question also they asking nowadays equivalent annual labor whatever the labor turn you have computed that you have to convert into peranom basis called equivalent labor suppose given data per month data one month information. So one month information whatever the labor turn you got 10% means what to do 10% 12 is equal to 120% is the equivalent annual labor got it my dear converting labor turnover into paranal basis called equivalent labor therefore kindly read the question whether the question is based on with expansion or without expansion and we have to identify whether equable equivalent lab equivalent labor turnover also they ask or not that you have to verify clear I have posted the videos in the to common mistakes with respect to costing chapter wise posted and permits you can verify so that you can avoid those mistake in exam then three causes of labor what were the reason for labor very frequently asked question then personal causes avoidable causes and unavoidable cause due to my illness I'm resigning the office then it comes under personal causes poor wages or hectic schedule okay then it's avoidable causes Due to mal practice they removed then it comes under unavoidable costs.

[00:42:11]Two cost associated to labor turnover.

[00:42:13]If the labor turnover happen mean it involves some cost. What are the two types of cost? One is called the preventive cost. One is called the replacement cost. What is called the preventive cost? Employee should not go from the organization for that. What are all the prevention meth method prevention mechanism they're having?

[00:42:29]That is called preventive cost.

[00:42:31]Incentive bonus. Okay. What whatever the perisites doesn't all indirectly they are pre they are preventing from you to go out from the office that those things are come as preventive cost replacement cost person goes out from the organization to replace they are going to give they going toward what income expenses what adisement expenses recruitment expenses new employee because of new employee some wastage may going to happen extra wages this all comes under replacement cost ultimately Our organization has to have them keep it in mind to minimize the le.

[00:43:06]What are the steps to minimize le? Exit interview. Very very important question.

[00:43:10]Five more question frequently asked question.

[00:43:13]Exit interview. Job evaluation and analysis. Scientific system of recruitment. Enlightened attitude of management and use of commit. These are five steps with respect to minimization of then four different accounting treatment of overtime pre. So you know what is called overtime time during which with respect to overtime whatever the time they spend over and above the normal working hours that is called overtime. So as per the Indian factories act if the workers worked more than 9 hours a day or 48 hours a week then it is called over time more than 9 hours a day or 48 hours a week then it is called over time. Then over time premium whatever the excess amount they are paying that amount is called overtime premium that is logical or not clear more than 9 per 10 rupees for example ruba has ruby has worked okay 10 so how many house over time I n more than nine hours a day is called over time group has worked in particular day 10 so how many house over time can you Please post in a comment.

[00:44:34]Yes.

[00:44:37]One hour. Okay.

[00:44:39]Rakuman. What about you? NPK.

[00:44:46]Okay. So, one hour is a one. Very good.

[00:44:49]Satish. Good. I said 10 rupees wages am right 10 rupees the wages in general in India in case of over time double the normal rate of wages they'll pay the excess amount is called what over time please so one hour over time is correct can you please tell me it's a common mistake from many student in the examination how much overtime premium amount can you please text me rate 10 rupees I said you know rules for overtime more than 9 hours a day or 48 hours a week or condition either 9 hours a day or 48 hours a week is called overtime. Clear? In general in India in case of overtime workers are enter double the normal rate of wages. The excess payment is called overtime premium. Can you please tell me how much overtime premium amount in this case?

[00:45:40]Over time or not that is correct. Yes.

[00:45:43]How much overtime premium dishes?

[00:45:53]Rockes is telling how much overtime premium satan selling 20 rupees. Yeah.

[00:46:03]Lesh 20 rupees.

[00:46:07]Any other answer?

[00:46:13]The answer is the answer is 10 rupees only not 20 rupees. That excess amount is called overtime premium. Understood?

[00:46:23]During the overtime double the normal rate they are paying 10 rupees wages additional 10 rupees a premium logical they'll pay 20 rupees total payment the 20 but out of 10 rupees 10 rupees wages only additional 10 rupees only called overtime premium. Understood my dear?

[00:46:40]Therefore the accounting treatment and all applicable only for the premium one not for the wages. So please be careful.

[00:46:46]Okay?

[00:46:50]So in general I'll repeat the definition in general in India in case of overtime workers are entitled to get double the normal rate of wages. Double the normal rate of wages the excess amount is called overtime premium. So for that overtime premium what the accounting treatment why overtime has happened and accounting treatment due to labor shortage because of the shortage of labor means accounting treatment charge to cost of production. Over time happen due to customer's desire due to urgency from the customer then charge the particular job itself due to fault of the particular department then defaulting department has to back and due to abnormal condition transfer to costing you understand. So very very very frequently asked the question upon treatment of overtime. Okay. Then six different basis of overhead absorption.

[00:47:43]Percentage of direct material, percentage of direct labor, percentage of prime cost, labor hour rate, missionar rate and based on output.

[00:47:52]These are all the basis in which we can apportion.

[00:47:56]Three methods of reaportion you know direct distribution method, step method and reciprocal method. under reciprocal method, simultaneous equation method, repeated distribution. Another way I'm going to solve is called as order repeated distribution method or trial and error method also. Okay. Then when direct distribution method is applicable service department render services only to the production department then we have to solve it by way of direct distribution.

[00:48:23]When step me one service department render services to the production department as well as another service department whereas another service department services only to the production department then step is the both the service departments are service to each other then reciprocal is understood my ideas. Then two conditions for using blanket overhead rate you know one is called departmental rate is there another is called bank blanket overhead rate. Departmental rate represent what?

[00:48:52]For each and every department we are going to incur separate separate rate over again. Then it is called what?

[00:48:58]Department rate. Blanket rate means one rate for all the department we are going to apply then it is called blanket rate.

[00:49:07]Clear rate for all the department that is called one blanket rate. When in which circumstantion blanket rate is applicable okay that's the next one.

[00:49:17]Okay. In which circumstant blanket rate is applicable?

[00:49:21]When only one major product is produced.

[00:49:26]Okay. Only one major product or when several products are prod more than one product produced then all the product processed through all the department and all the process are all the products are processed in the same length of time in each and every department. The two condition Then only we can apply blanket.

[00:50:00]Then capacity. What is called capacity?

[00:50:04]Unutilized capacity is called idle capacity.

[00:50:10]With respect to idle capacity accounting treatment due to unavoidable reason it's treated as a overgate due to avoidable reason transfer to costing due to seasonal factor charged to cost of production. Understood?

[00:50:27]Then three accounting treatment of packing expenses.

[00:50:31]Three different types of packing they are mentioned. One is primary packing.

[00:50:34]Another one is called sec secondary packing. Last one is called special packing. In case of primary packing form part of prime cost secondary packing it's form part of selling and distribution over and special packing we are going to charge to the separate charge you separately to the specific customer itself.

[00:50:54]Then integral accounting system what are the free prerequisites four sorry four prerequisites of integral accounting system most frequently asked question extent of integration coding system standardization and coordination extent of integration coding system okay four question you have to explain what is called extent of integration kindly refer material so that we can write graph some few item okay so two to line at least you have to write them so extent of integration coding system, standardization and coordination. Why we need reconcilation? Already we discussed reconcilation applicable only for non integral accounting system. Reason for reconcilation few items applicable only in cost accounting but not in financial accounting. Few item applicable only in financial accounting but not in cost accounting. Difference in method of depreciation the sense what cost of money you going to charge step letter method. Financial going to call WDB method because of the difference in profit income. The difference is based on inventory values. Cost of money are going to value the inventory based on cost of production. Financial accounting cost and NR whichever is lower. So because of that difference in profit may arise.

[00:52:05]Two types of computation of composite.

[00:52:09]What are the absolute 10 km commercial 10 km? This examination absolute and commercial 10 km practical problem expert question. Please be care. Okay.

[00:52:19]10 km is equal to 10 km. absolutely are going to come. So that is called absolute 10 km average 10 into total kilm is equal to commercial 10 km. So you have to remember the formula.

[00:52:30]Two advantages of interprocess profit.

[00:52:34]What is called interprocess profit? In general output of the one product we are going to transfer to next product.

[00:52:39]Output of the one process we are going to transfer to next process after as as it is as a cost. If output of the one process transfer to next process after adding profit then it is called interprocess profit. So after adding markup profit that one that is called interp process profit advantage one for compare the cost of output and market price what the cost and how what the market price we can compare. Second one each process is considered as a profit center. Understood? Now in you know profit center and the cost center each and every process is a cost center only they are going to incur the cost. But if you're going to add profit then become profit center.

[00:53:25]Three accounting treatment of byproduct you know join product and byproduct.

[00:53:31]Even different between joint product and by product is a very frequently asked question. What is called joint product and what is called by product. The main difference between the joint product by product is intention be the manufacturer secretary. As a manufacturer I want to produce product A and the product B.

[00:53:43]Intentionally producing all the product having commercial value in the market and it's called joined product. Byp product I want to produce one main product while producing the main product incidentally or accidentally another product is also emerged in then it's called byproduct. Main product is a costly one. Byproduct is a small value.

[00:54:01]Clear? Soap manufacturing company soap is a main product glycering is a by product understood. So of the question what the accounting treatment of the type product if small value it treated as a mis if it's a considerable value treated as a join cost it should be considered as a joint suppose the byproduct record some further processing and such NRV is small value then we have to show income in credit side of the costing if the conser value same above above case okay treated as a joint cost.

[00:54:38]What are the methods of aortionment of join cost? Physical unit method, average unit cost method, technical point method, all technical point is also called survey method. Okay, technical point or survey method, contribution margin method, market value method under market value, market value at top point, market value after further processing and NRV method. These are all the five methods of aortionment of joint cost.

[00:55:04]What are all the ways to improve PV ratio? Increase in selling price, reduce the variable cost or change in sales.

[00:55:11]These are the three different ways to improve profit quantification.

[00:55:15]Six types of break even chart.

[00:55:17]Contribution break even chart, cash B chart, control break even chart, analytical B chart, product break even chart and profit graph. These are the six types of break even chart. Four four practical applications of marginal cost.

[00:55:34]What are the use of marginal cost?

[00:55:36]Pricing policy for the purpose of pricing policy. Decision making purpose.

[00:55:40]Assertainment of realistic profit.

[00:55:42]Determination of production.

[00:55:45]Three different purpose of computing product cost. Preparation of financial statement. Product pricing. Contracting with the government agents agencies.

[00:55:54]Three different groups of functional budget. Even the last exam they ask.

[00:55:58]Okay. Physical budget. cost budget and profit budget. Two cost drivers in ABC resource cost driver and activity cost driver. Four types of hierarchy in ABC.

[00:56:09]Four types of activities called hierarchy. Unit level activity, patch level activity, product level activity and the facility level activity. For each and every unit I'm going to incur the cost that is called unit level activity. Irrespective of the number of unit batch as a whole, I'm going to incur the cost that is called the batch level activity. irrespective of the number of unit respect to the number of batch the product as a whole I'm going to incur the cost that is called product level activity what all the cost I'm going to incur facility to produce and sell the product that is called facility level okay the one hierarchy the last question not requ last last question is important sorry four main reason for abs why we need ABC production overhead are high in relation to direct cost diversity in product range product uses different amount of overhead resources computation of overhead resources not primarily driven by one only four meets of are necessary for ABC activity based cost that's important now with respect to ABC always remember ABC is advanced version of overhead therefore whenever overhead comes that time only have to apply ABC nothing but in case of up to prime cost remain irrespective of irrespection cost only impact on so enjoy the theory exam theory then shall have a bit of important formulas also formula okay for the first exam how we have to present the answers clear like that what how we have to remember the formula is important so remember all the formula all the formula should be in your fingertips then only time consumption to solve the problem okay the Quick revision of formulas chapter wise again the formula variable cost segregation you know segregation of seable cost variable cost per unit is equal to how up to this stage are you happy put the thumbs up my happy with the theory partick picking Hope you're listening, enjoying useful marsh.

[00:58:33]Yes.

[00:58:38]Now how quickly you can device all the formula. Okay.

[00:58:50]Segregation of cost. How to variable cost per unit. Formula for variable cost per unit is change in cost by change in number of units equal to variable cost per unit. Change in okay delta. Okay.

[00:59:02]Change in total cost numerator change in quantity output is the denominator change in cost by change in number of unit with respect to material costing.

[00:59:11]Formula for material cost reorder level.

[00:59:13]Formula for reorder level maximum usage into maximum lead time. Listen my dear usage represent usage of raw material.

[00:59:21]Usage of raw material not finished goods. Nowadays in examination they g the finished goods information. You have to identify you have to derive raw material data. Okay. Maximum usage into maximum lead time. Okay. Then formula for maximum level reorder level plus reordering quantity minus minimum usage into minimum lead time. Formula for minimum level reorder level minus average usage into average lead time.

[00:59:46]Formula for average level, minimum level plus maximum level divided by two or minimum level plus half of the reordering quantity. Clear? Both the formula going to give the two different answer. Any one of the answer you can write both answers are correct answer.

[01:00:00]What do you think? Danger level formula with respect to danger level. Minimum usage to minimum lead time or minimum usage to minimum time for emergency purchase. With respect to danger level, minimum time for emergency purchase given in this question means that particular formula only have to take. If it is not there rush delivery, minimum time for emergency purchase is not there. Then you can use minimum usage to minimum date time. Sometime instead of minimum usage they use what normal usage also. So normal usage into normal day.

[01:00:29]Both the formulas are correct formula.

[01:00:31]Both the formula you get what's not same answer two different answer you can get.

[01:00:34]Depending upon the availability of the information you can make use of the information.

[01:00:38]Then formula for E you know square root of 2 A by C or 2 A by C also A or O is not important expansion is important. A represent annual requirement of raw material in quantity that is important annual requirement of raw material in quantity not in finished goods. Okay. O represent buying cost ordering cost or buying cost per order per order is important. C represent carrying cost per unit peranas. That is important. Okay.

[01:01:09]Ordering cost formula number of order into cost per order is equal to ordering cost. Okay. Formula for carrying cost half of the order size into carrying cost per unit per is equal to formula total carrying cost. So you know formula for the carrying cost is half of the order size into carrying cost per unit per. Can you please tell me in which circumstance 1x2 not applicable? Formula for carrying cost is equal to the quantity into carrying cost per unit peranom.

[01:01:37]Who is going to tell the correct answer is in general formula for the total carrying cost is equal to half of the order size into carrying cost per unit per 1 by2 not available you don't question first exam question most of the company say they put half not arises when when when try post no idea Ah very good Rakkesh.

[01:02:13]Yes yes yes yes Haripria. Very good.

[01:02:15]Welcome. Yes. Whenever safety stock arises with respect to safety carrying cost for the safety stock 1 by2 will not understood. Safety stock into carrying cost per unit parameal to total carrying cost of safety stock. Very good. Please be careful because safety stock throughout the year you have to maintain. Therefore 1x2 concept not.

[01:02:37]Good good good. Yes.

[01:02:40]Associated cost is equal to ordering cost plus carrying cost is equal to associated cost. Total cost is equal to associated cost plus purchase value is equal to cost. Stock turnover ratio.

[01:02:49]Formula for stock turnover ratio. Raw material consumption by average stock of raw material. Raw material consumption represent what? Opening stock of raw material plus purchase of raw material minus closing stock of raw material is equal to raw material consumption.

[01:03:01]Average stock opening stock plus closing stock 2 is equal to average raw.

[01:03:07]Then with respect to employee time rate system time taken into rate per hour. P rate system number of unit produced into rate per unit. Rate per hour and rate per unit not same. Please be careful.

[01:03:20]All say formula for all say basic plus bonus. Basic is equal to time taken into rate per hour. Bonus is equal to half of the time saved 50% half of the time saved into rate per hour. Roman system time taken into rate per bonus is equal to time taken by standard time into time saved into rate per half.

[01:03:39]Okay. So in general student used to interchange and row one for please be careful. Okay. Hall say start with H. H represent half therefore half of the time saved. Row one start with the R ratio therefore time taken by standard time into time set it's a ratio now what the clarity you won't commit the mistake percentage efficiency identify in based on output means percentage efficiency actual output by standard output percent efficiency based on time means standard time actual time nothing but time taken okay we'll talk for please earning total earning by time taken is equal to FT earning Labor cost per unit is equal to total earning number of unit produce equal to labor cost per unit. Ard time is equal to total time minus product time is equal to time or time as per the time keeping record minus time as per the time booking record is equal to time.

[01:04:36]Over time already we discussed if you work workers work more than 9 hours a day or 48 hours a week or condition or condition. Most important then average labor number of workers at the beginning plus number of workers at end by two is equal to average labor force.

[01:04:56]Overabsorption absorbed over is greater than actual overhead mean that is called overabsorption. Very commonly committed mistake here. Absorbed over more than actual overgate.

[01:05:08]Absorbed over is more than actual over absorption. Absorption more in the over.

[01:05:13]Okay. Absorbed is more actual is less.

[01:05:15]Under absorption absorbed overhead is less than actual under absorption.

[01:05:19]Capacity represent practical capacity minus actual capacity is equal to capacity. Overhead recovery rate total overheads of the production department number of hours equal to overhead recovery. Cost driver rate formula. Cost pulled by cost driver is equal to cost driver rate. Economic batch quantity formula square root of 2 A by IC. A represent annual demand of the product.

[01:05:42]S represent setting setting up cost per setup cost per batch. C represent carrying cost per unit of product.

[01:05:51]EQ represent EOQ for the purpose of raw material. EQ for the purpose of finished good finance. Okay.

[01:05:59]I represent interest carrying cost. C rep with respect to operating costing cost per passenger kilome is equal to total operating cost number of pass equal to cost per passenger k is inclusive of the profit total operating cost plus profit number of pass total operating cost plus profit is total operating revenue nothing but total taking total takingalvenue then fire passenger trips they will ask.

[01:06:31]So total operating revenue by number of trips. So please be careful cost per passenger kit of the question cost per passenger kilometer or fair per k or fair per passenger trip. You should be careful like this. Then how to identify number of passengers go by the same order number of seats?

[01:06:50]Number of passenger. Number of passenger number of kilometers equal to number of passenger. Number of person how to identify number of seats into percentage of occupancy is equal to number of person. Whereas number of kilometer apply the same rule so that you can avoid mistake. Number of buses into number of kilometers into number of ways into number of trips into number of days is equal to number of trip. All are happy. Then marginal costing contribution formula sales minus variable cost equal to contribution or fixed cost plus profit is equal to contribution or sales into PV ratio is equal to contribution. Depending upon the availability of the information you have to make use of the formula all the formula you get the same answer only. P ratio contribution by sales in data is equal to P ratio or change in profit by change in sales in data is equal to P ratio or change in contribution by change in sales is equal to P ratio or 100 minus variable cost ratio nothing but 1 minus variable cost ratio is equal to PV ratio total sales formula contribution to PV ratio is equal to total sales p margin of safety is equal to total sales or variable cost plus fixed cost plus profit total cost plus profit is equal to total Formula for desired sales in unit fixed cost plus desired profit by contribution per unit is equal to desired sales in value means fixed cost plus desired profit by P ratio always remember always remember denominator is a contribution per unit means answer in quantity denominator is a PV ratio means answer in value irrespective of the all the forms okay same manner applicable for B also fixed cost by contribution per unit mean square B in quantity Fixed cost by PV ratio means P in value. Then P total sales minus MOS sales is equal to break even sales. If you're going to take the quantity, quantitative answer will come.

[01:08:42]If you take the value, value based answer B in percentage 100 minus MOS percentage is equal to B percentage. Cash B cash fixed cost by contribution per unit is equal to cash B. Cash fixed cost other than depreciation. Depreciation non-cash MOS formula. MO is in unit mean profit by contribution per unit. MO is in value mean profit by PV ratio. 100 minus B sales is equal to margin of safety sales. Okay. Total sales minus B is equal to margin of safety sales in bank.

[01:09:15]Indifference point change in fixed cost by change in variable cost per unit or change in fixed cost by change in P ratio equal to indifference point.

[01:09:24]Shutdown point avoidable fixed cost by contribution per unit or avoidable fixed cost by PV ratio.

[01:09:31]Formula for NR net realizable value sales value after further crossing less profit margin less selling and distribution less further crossing cost equal to NR.

[01:09:46]Suppose a distributed model is not there. So remaining balance equal to one NR based on NR to approach the joint cost sheet you know format for the cost. It's a comprehensive cost you pick because with considering opening and the closing stock opening stock of raw material add purchase value of raw material less closing stock of raw material is equal to raw material consumption cost of raw material consumed and direct labor is equal to prime cost and factory overhead is equal to factory cost also called works cost opening stock of WAP less closing stock of WP is equal to cost of manufacturer add administration overhead is equal to cost of production add opening stock of finished goods is equal to Cost of goods available for sale. Less closing stock of finished goods equal to cost of goods sold. Okay. So cost of goods available for sale. You have to add. Okay. Add selling and distribution is equal to cost of sales. Add profit is equal to sale value. That format you should be in the fingertips and a cost sheet frequently asked question. Reverse working question they're asking. If you remember the comprehensive cost sheet format it's easy for you to understand. Okay.

[01:10:50]Quickly can solve. Add opening stock of finished goods. The balance is called cost of goods available for sales.

[01:10:59]Thereafter less closing stock of finished goods is equal to cost of goods sold. Okay.

[01:11:08]Methods of computation are to be discussed with comp without expansion with expansion. Three different method and without expansion separation replacement and mix method with expansion separation access and the flex method. Separation method formula S by L. Replace method formula R by LL. Mix method form S plus R by L under expansion separation method S by L.

[01:11:28]Replace method R uh accession method R + N by L. Flux method S + R + N by L.

[01:11:36]Okay. So A represent accession A a= R + N is equal to since you have to express in terms of percentage everything with 100 you'll get the percentage lower the labor is advised. So remember the process costing format for the process costing debit side all expenses credit side normal loss abnormal loss and output transfer the next process formula for input quantity minus output quantity is equal to process loss quantity the process loss can be classed into normal loss and abnormal loss or abnormal okay per unit formula with respect to process loing is gross cost minus normal loss salvage value by input quantity minus normal loss value equivalent Production formula number of physical unit unfinished unit WAP stage into percentage of completion. So with respect to equivalent production we are having FIFO method and weight method degree of completion for the open WP given in this question you have to solve the problem by way of FIFO method.

[01:12:35]Degree of completion for open WP is not given then we have to solve the problem of only question specifically says average cost we can use the format we have input output monitor reconation percentage of completion memor of reconation it is better to start with profit as per financial accounting ends with the profit as per cost always advisable to start with Memorandum of cons format.

[01:13:08]Then in debit side decrease in income increase in expenses will be debited.

[01:13:13]Credit side decrease in expenses.

[01:13:15]Increase in income should be credited.

[01:13:18]And in debit side income included in the financial accounting but not in cost accounting. For example sale on profit on sale of land, share transfer fees and debit side.

[01:13:28]Similarly, credit side sale expenses included in the financial accounting but not in cost accounting like loss on sale of machine expenses.

[01:13:40]If you remember the for easily automatically accounts will then with respect to variance analysis material cost variance can be classed into price and usage variance. Usage variance second class mix and yield variance formula 1 - 2 1 - 3 1 - 4 4 - 3 3 - 2 1 2 3 4 represent standard quantity into standard price actual quantity into actual price actual quantity into standard price revised actual quantity into standard price standard quantity represent what expected quantity of raw material required for the of actual production is called standard quantity. The word standard always ends with actual quantity. Then revising the actual quantity is called revised actual quantity. Revising the actual quantity in standard proportion proportion is called revised active with respect to labor variance. Labor cost variance can be classed to rate and efficiency variance. Efficiency varian mix and revised efficiency formula 1 - 2 1 - 3 1 - 4 4 - 3 - 2 1 2 3 4 standard standard rate acts and action rate acts rate loss and standard rate.

[01:14:48]Whenever you come across adult time adult time variance you have to compute always addit time variance at birth only formula for adult time variance is actual addit time standard rate that adult time variance have to park it in efficiency efficiency further class into reise added time variance and revisition is the balance integral with respect to variable variance variable cost variance can be classed into expenditure variance and volume variance expenditure variance and efficient Okay. All efficiencies are the efficienc one is without calendar variance and other is with the calendar variance. In case of without calendar variance, fixed order cost variance can be expenditure and the volume variance. Volume again classified to capacity efficiency variance. Whereas with the calendar variance cost variance can cost variance can be classified expenditure variance into volume variance volume again class into capacity efficiency in the calendar variance formula 1 - 2 1 - 3 1 - 4 4 - 5 5 - 3 3 - 2 1 2 3 4 5 represent actual output in standard rate actual fixed overhead whether fixed work actual standard rate and possibility fixate.

[01:16:15]What is formula for possibility?

[01:16:17]Budgeted fixed budgeted days into actual days equal to possibility. Here you should be careful. One represent actual output to standard rate. Here standard rate represent rate per output because they're multiplying with output.

[01:16:29]Therefore rate per unit in four standard rate represent rate per hour because they multiply with the okay rate per unit and rate per not. Please be care for respect to production budget.

[01:16:42]Whatever the finished production budget mean finished goods. So sales quantity add closing stock of finished goods less opening stock of finished goods equal to production. Similarly format for purchase budget purchases for raw material. Therefore raw material consumption add closing stock of raw material less closing stock of raw material is equal to raw material purchase.

[01:17:01]Understood?

[01:17:03]So I hope theory as well as formula quick enjoy the session.

[01:17:13]So tomorrow morning 6:30 we can meet again for chapter 2 onwards we have a big revision practical problem big corion hope you enjoyed the session understood so don't waste the time study have nice food okay dinner and at least 1 hour kindly study revise all the past examinations answer what all the question they ask okay and tomorrow morning happily you can wake up and what 6:30 shortly we can meet to revise the practical questions thank you my kindly informed reference also tomorrow 6:30 the same link same YouTube link okay bye-bye thank you my yes thank you ma'am thank you