1 ANIL PRATAP SINGH DR ANIL PRATAP SINGH

1 ANIL PRATAP SINGH DR. ANIL PRATAP SINGH HOD COMMERCE HARISH CHANDRA POST GRADUATE COLLEGE VARANASI Monday, January 3, 2022

PART I ACCOUNTING FOR PLANNING AND CONTROL M. COM. III SEM. SYLLABUS ANIL PRATAP SINGH Monday, January 3, 2022 2

OBJECTIVE OF THIS PAPER : - The objective of this course is to Familiarize students with the accounting concepts and methods used by managers for Planning and controlling business operations. syllabus Unit I Budgeting Control: Meaning of Budget and Budgeting control, purposes of Budgeting, Importance, Essentials of an effective budget, classification of budgets Flexible budget and ZBB Capital Budgeting: meaning and Appraisal-Pay back period, method, Rate of return method and net present value method. Unit II Standard Casting and Variance analysis: - meaning and objectives of Standard Costing Setting of Standard, Variance Analysis: - Material, Labour and Overhead variances Unit III Marginal Casting: - meaning, Determination of Profit under marginal Costing, Importance and Applications: - Dropping a line or product or Department, Pricing of Product, make or by Decision, Selection of most profitable channel, Break even analysis: - Meaning, P/V ratios, BEP Chart and Practical Applications of Break even Analysis Unit IV Accounting: -Meaning and Advantages, Responsibility Centers –Cost, Profit and 3, 2022 Monday, January ANIL PRATAPResponsibility SINGH Investment Centers. Transfer Pricing- Meaning, Methods and Selection of Transfer Pricing Method. Inventory Contro. Meaning, Importance and Techniques(EOQ, ROP, ABC, VED)and. Determination of Inventory levels. 3

INTRODUCTION 4 • Name of this paper is related with three words ACCOUNTING, PLANNING AND CONTROL. Before discussing the paper content according to syllabus I would like to discuss these three words which you guys know very well. These words are familiar with all B. COM. pass students but I feel that this is necessary to explain these words in brief here and then discuss the paper according to syllabus. ANIL PRATAP SINGH Monday, January 3, 2022

ACCOUNTING 5 • Accounting is the measurement, processing and communication of financial and non financial information about economic entities such as business and corporation. Accounting, which has been called the language of business, measures the result of an organisation’s economic activities and convey this information to a variety of users including investors, creditors, management and regulators. Accounting can be divided in to several fields including Financial Accounting, Management Accounting, External Auditing, Tax Accounting and Cost Accounting. ANIL PRATAP SINGH Monday, January 3, 2022

PLANNING 6 • Planning is deciding in advance what is to be done. It involves the selection of objectives, policies, procedures and programs from am ong alternatives. M. E. HURL • Planning involves the determination of future course of action, that is, why an action, what is to be done, how to be done and when to be done. ANIL PRATAP SINGH Monday, January 3, 2022

PLANNING Planning is the process of thinking about the activities required to achieve a desired goal. It is the first and foremost activity to achieve desired results. It involves the creation and maintenance of a plan, such as psychological aspects that require conceptual skills. Planning is preparing a sequence of action steps to achieve some specific goal. If a person does it effectively, they can reduce much the necessary time and efforts of achieving the goal. A plan is like a map. When following a plan, a person can see how much they have progressed towards their project goal and how far they are from their destination. Planning is one of the executive function of the brain, encompassing the neurological process involved in the formulation, evaluation and selection of a sequence of thoughts and actions to achieve a ANIL PRATAP SINGH desired goal. 7 Monday, January 3, 2022

8 GOAL ORIENTED DYNAMIC PROCESS FORWARD LOOKING NATURE OF PLANNING INVOLVES CHOICE INTELLECTUAL PROCESS PRIMARY FUNCTION ANIL PRATAP SINGH Monday, January 3, 2022

• Better checks and control of organisation. • Sustained growth and profitability Benifits • Superior assessment of performance. Of Planning ANIL PRATAP SINGH 9 • Optimum utilisation of resources. • Development of strategy to meet objectives. • Timely remedy for action • Identification of possible areas of development • Improvement of managerial performance Monday, January 3, 2022

Limitations of planning 10 Lack of accurate information Failure of people Problems of change Inflexibilities Rigidity in planning Time and cost factors Environmental constraints ANIL PRATAP SINGH Monday, January 3, 2022

CONTROLLING 11 • Controlling is determining what is being accomplished, that is evaluating the performance and if necessary, applying corrected measures so that the performance takes place according to plans. George R Terry. • In the planning stage, managers decide how the resources would be utilised to achieve organisational objective; at the controlling stage, managers try to visualise whether resources are utilised in the same way as planned. ANIL PRATAP SINGH Monday, January 3, 2022

Controlling means ensuring that the organisation is actually achieving the planned objectives. 12 Is the process of comparing actual performance with standards and taking any necessary corrective actions. Is the pocess of monitoring activities to ensure that they are being accomplished as planned and of correcting any significant deviation. ANIL PRATAP SINGH Monday, January 3, 2022

Step 1 Establish performance objectives and standards Step 4 Take necessary actions The Control Process 13 Step 2 Measure actual performance Step 3 Compare actual performance with objectives and standads ANIL PRATAP SINGH Monday, January 3, 2022

characteristics of effective controls • Focus on critical control points • Economic feasibility ANIL PRATAP SINGH 14 • Comprehens ibility Accuracy Timeliness Integration Flexibility • Acceptability Monday, January 3, 2022

Importance of control function 15 Eliminates wastages and makes management accountable. Reduces uncertainties. Organizational effectiveness. ANIL PRATAP SINGH Monday, January 3, 2022

Importance of control function 16 Ensure better coordination among the functions of Management Prevent misuse of delegated authority Making planning effective ANIL PRATAP SINGH Monday, January 3, 2022

Limitations of controlling Many areas define measurement in quantitative terms. Enterprise has very little control over external influences. Employees do not like to be watched and offer resistance. ANIL PRATAP SINGH 17 It is expensive and takes time and effort. Setting control points is not easy Monday, January 3, 2022

Relationship Between Planning And Controlling Planning and Controlling are closely linked to each other planning is a process of setting organisations objectives goals and standards where is controlling is a process of ensuring that the goals are achieved as for the set plan Planning should be done in such a way that it lays foundations for the establishment of controlling standards and keeps controlling in view. Planning involves what an organisation aspires to achieve in the future where is controlling includes what the organisation has achieved in the past ANIL PRATAP SINGH Monday, January 3, 2022 18

Planning facilitates controlling • Planning facilitates existence of certain plant goes and standard of performance. ANIL PRATAP SINGH • in fact, planning and controlling are the two sides of a same coin. if learning is root controlling is the fruit. • It provides basis of controlling. Planning provides predetermined goes against which actual performance is compared 19 we cannot think of an effective system of controlling without existence of well thought out plans. Monday, January 3, 2022

20 THE END THANKS STAY HOME STAY SAFE HAPPY LEARNING ANIL PRATAP SINGH Monday, January 3, 2022