What are the Methods used for Booking the Time on Individual Jobs?

There are a variety of methods of booking the time on individual jobs. Time may be booked manually or mechanically. Small organisations book the time manually, while large organisations book the time mechanically. The following methods are generally used for time booking:

1. Daily Time Sheet

2. Weekly Time Sheet

3. Job Cards

1. Daily Time Sheet:

Under this method, each worker is allotted a time sheet to record the time on each job during a day. The worker is supposed to enter the work order no a description of work done, the ‘quantity produced, and time at which he starts and iii at which he finishes.

The worker must give details of time which he spends in factory and the number of jobs performed during his stay in the factory. When he is usually engaged, he is supposed to record the reason for it and the time so spent be treated as idle time. After time sheet is duly recorded, it is countersigned by foreman to ensure correctness of the record. This method is ideal for small consent

Daily Time Sheet

Total Hours- Total Cost-

2. Weekly Time Sheet

This method is similar to the method of daily time sheet except those time sheets are prepared for a week in place of everyday.

This method of recording time is improvement over the daily time sheet since the number of documents to be prepared is considerably reduced. But there are chances of these sheets being lost or mutilate because they are continuously kept by the workers for a long period of one week. This draw back can be removed if the sheets are kept with a departmental clerk and these sheets can be filled up by the worker or foreman or departmental clerk.

3. Job Cards

This is another method of recording time spent by a worker on the job. A job card is a card which contains all the details regarding the time spent by a worker or a group of workers on a particular job.

A job card is prepared for every job. It authorises a worker to carry out the specified assignment. It also helps in having a correct allocation of wages to jobs, operations or processes. Whenever a worker takes up the job, he is given this card and he records the hours worked on the job. Generally four different types of job cards are used and these are;

(a) Job card for each job

(b) Job card for each worker

(c) Combined Time and Job Card

(d) Piece work card

(a) Job card for each job:

This type of job card is prepared separately for each job. As the job progress the card moves from worker to worker along with the job. Time spent by each works on the job is recorded on this card. This type of job card is very useful where the number of jobs is many and each job passes through different workers with different grades. It eliminates preparation of separate abstracts of the job cards for cost purpose

(b) Job card for each worker:

In this system, each worker is allotted a job card at the beginning of each week or each day. The time of starting and finishing each job is recorded along with the respective job number by the foreman of the department concerned. If the job has been completed during overtime hours, the time of completion may be recorded in a distinctive colour.

This card gives a complete record of the time spent by each worker on different jobs during a particular period. It also facilitates reconciliation between the time of attendance and time booked against each job. However, a separate labour cost abstract has to be prepared from all the job cards.

This type of card is suitable for an organisation where the workers are pail wages on piece rate basis. Quantity of work done by a worker and time spent on the work are recorded in this card. Though time spent on piece work is not important, it is recorded because bonus is to be paid to workers for time saved and his efficiency judged. Such cards are also maintained for ensuring regular production and disciple in the organisation.

Piece Work Card

Reconciliation of Gate Time with Time Booked

It is necessary to reconcile the time booked to different jobs of each worker with the time recorded at the gate of the factory. Time recorded at two different places must agree. But sometimes there is discrepancy between the gate time (time keeping) and time booked (time booking) to different jobs.

This is due to various reasons, namely, workers take some time to reach from the gate of the factory to actual work place, time lost due to breakdown of machinery, power failure, non-availability of materials and instructions, etc. If the time recorded in the time cards is more than the time booked on jobs, the difference is the idle time. The idle time so computed can be compared with the idle time recorded in the idle time cards, if maintained by the organisation.

IDLE TIME

Idle time is that time for which the worker has been paid without giving any production to the employer. Where workers are paid on time basis some difference is bound to arise between the time for which they are paid and that which they actually spend upon production. Such difference is known as idle time, i.e., the time for which the employer pays but derives no benefit.

Idle Time = Total Time spent by a worker – Actual Time spent on production

Causes of Idle Time

There are many reasons for the idle time. Causes for the idle time may be classified according to controllability or according to functions.

(a) Causes according to controllability:

According to this classification the causes of idle time are:

(i) Normal idle time – Normal idle time arises due to unavoidable factors in the factory. For example, time taken from the factory gate to the department where the worker is to work, time taken in picking up the work for the day, time taken for personal needs tea breaks, etc.

(ii) Abnormal idle time – Abnormal idle time arises due to avoidable factors. For example, time wasted due to breakdown of machinery, time wasted due to power failure, time wasted due to shortage of raw materials, strikes or lockouts, etc.

(b) Causes according to functions:

The causes of idle time according to this classification are: (i) Productive causes-

1. Machine breakdown,

2. Power failure,

3. Waiting for work,

4. Waiting for tools and or raw materials,

5. Waiting for instructions, etc.

(ii) Administrative causes-

1. Lack of supervision,

2. Distance between factory gate and place of work,

3. Poor planning,

4. Interval between one job and another,

5. Unusual Tea break, etc.

(iii) Economic causes-

1. Lack of demand for the product,

2. Strikes or lockouts,

3. Under-utilisation of production capacity,

4. Closure in seasonal industries,

5. Surplus man power, etc.

Treatment of Idle Time

The idle time cost includes wages paid for lost hours. The treatment of idle time cost is as follows:

(a) Normal and controllable idle time cost is charged to factory or works] overhead.

(b) Normal and uncontrollable idle time cost is treated as direct wages and charged to the job by inflating the rate of wages. Suppose a worker spends’ 8 hours a day and his wage rate is Rs.10 per hour but the effective working time is 7 hours. Therefore, the wage rate should be calculated as Rs.

(c) A basic principle of cost accounting is that abnormal expenses and losses should not be included in costs. It is on this principle that the abnormal idle time costs are excluded from the cost and hence they do not from the part of cost of production. Abnormal idle time cost is directly transferred to costing profit and loss account.

Control of Idle Time

iii) Effective Supervision: Effective supervision reduces wastage of time because the workers become more alert

v) Fixing responsibility: The management should fix responsibility for various activities associated with the control of idle time at different stages.

OVERTIME

(i) Wages for overtime paid at a higher rate, Cost of idle time is wastage for the organisation as the wages for the idle time are paid for, without getting any production. Hence it is necessary to minimise the idle time by taking proper steps. Some of the steps are given below:

(i) Control over flow of raw materials: There should be an even flow of raw materials from the stores to the machines and workers, so that the workers will not remain idle for want of raw materials.

(ii) Regular maintenance of plant and machinery: Machine breakdown can be prevented by keeping proper maintenance system. A routine check of all machines at periodical intervals is a cure for any major breakdown.

(iv) Prompt reporting: Supervisors and foreman are required to report promptly about the wastage of time so that corrective steps are initiated. Where wastage of time is frequent, it should be investigated and causes analysed by the management for remedial action.

Overtime is the extra time worked by a worker over and above his normal hours of work. In India, if a worker works for more than 9 hours in a day or for more than 48 hours in a week, he is treated to be engaged in overtime. Overtime rate is always a higher rate than normal time rate.

It is usually double the normal rate. The additional amount expended on overtime work is called overtime premium. Overtime should be avoided as far as possible because it adversely affects the cost of production due to the following reasons:

(ii) Overtime is done when the efficiency of the worker is generally falling after day’s work,

(iii) Workers develop a habit of postponing the normal work to be done in overtime, and

(iv) Other overhead expenses increase disproportionately during the overtime.

Causes of Overtime Work

Overtime is usually required for the following reasons:

(i) Seasonal nature of industry – Seasonal industries like w walled industry 1 only for a part of the year and to meet the seasonal demand, overtime is needed.

(ii) Rush orders – Sometimes rush orders are received or a delivery dated approaches and the job is yet to be completed. In such situations overtime work is necessary.

(iii) Lack of supervision – Workers are tempted to go for overtime work since wage rate for overtime is more than normal working hour. Due to lack of supervision the requisition for overtime work is frequent and excessive.

(iv) Other causes – Breakdown of machinery, power failure, strikes or lockouts, etc. may necessitate overtime work.

Treatment of Overtime Work

Additional payment for overtime work is treated in cost accounts differently under different circumstances which are as follows:

(i) If overtime is worked on customer’s request so as to complete the job within the specified period, it is charged to the job directly.

(ii) If overtime is paid because of general pressure of work, it is charged as works overheads.

(iii) If overtime is due to delayed schedule, it is charged to the department which has been responsible for causing delay.

(iv) If overtime is due to seasonal rush in the factory, it is charged to the prime cost.

(v) If overtime is required to mala up the time lost due to breakdown of machinery, power failure or due to any abnormal reason, it is charged to costing profit and loss account.

Control over Overtime

Payment of overtime should be kept under control and the practice of working overtime should be discouraged. It should be permitted only in emergency? Liberal attitude on overtime policy by management leads to a tendency on the part of the workers to create work for overtime and to adopt go-slow tactics during normal working hours. If at all necessary, overtime must have a prior sanction of the competent authority. To exercise control over overtime work, the following points are worth- noting:

(i) Analysing causes – It is necessary to analyse the causes of overtime and report to management where overtime is becoming frequent and substantial.

Requisitioning overtime – Overtime must be requisitioned well in advance by the foreman or supervisor and should have sanction of the departmental head or Works Manager.

Effective supervision – It is necessary that there should be effective supervision to reduce the tendency on the part of the workers to create work for overtime.

(iv) Overtime reports – Weekly overtime reports must be made to the Works Manager who can initiate action to cut down overtime.