Study Notes management accounting acca f2

2. Preventive costs 
➢
 
Improving working condition 
➢
 
Keeping wages of labour up with market rate 
➢
 
Provision of a pension 
➢
 
Provision of welfare services 
➢
 
Cost of medical facilities offered to employee and his family 
➢
 
Cost of other benefits offered like interest free or low interest loans, training programs, sports 
facilities and vacations etc 
➢
 
Bonuses or profit sharing schemes 
ACCOUNTING
 
FOR
 
LABOUR
 
COST:
Integrated system (Gross Wages)
Debit 
Wages control account
Credit
Cash/ bank/ payables
Interlocking system (Gross Wages)
Debit 
Wages control account
Credit
cost ledger control account
Charging Direct Wages to production department
Debit 
Work in progress account
Credit
Wages control account
Charging Indirect Wages to production department
Debit 
Production overhead account
Credit
Wages control account
Charging Indirect Wages to non-production department
Debit
Non-production overhead control account
Credit
Wages control account

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F2 Management Accounting 
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Wages control a/c
$ 
Bank
xxx 
___
xxx 
$ 
WIP(direct labour)
xxx 
Production overhead: 
Indirect labour
xxx 
Overtime premium
xxx 
Idle time
xxx 
Shift allowance
xxx 
Sick pay
xxx 
___ 
xxx 

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F2 Management Accounting
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