Life Studying ACCA

SECTION 4(b) : Employment Income

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Advantages:

HR is the basic rights that all human beings are entitled to enjoy.
Kofi Annan:- HR is the foundation of human existance and coexistence. They are the priciple nby which we create sacred home for human dignity.

FUNDAMENTAL LIBERTIES
the federal constitutiom contains sevral provision which are designed to protect the freedom of the individual - referred to as fundamental rights/liberties- to be entrenced/enshrined cause these rights cannot be altered @ taken away unless the constitution itself is amended- can only be done with approval of 2/3 mojority of all members of parliament.

1. no person may be deprived of his life or personal liberty except in accordance with the law : prevents unlawfully imprisoned or put to death.
2. no person may subject to slavery or forced labour:- should not be regarded as property of aothers.
3. no person can be punished under a law which was not in force when the alleged crime was commited:-protects 4m being charged for a crime theat was not recognised as a crime at that time it was done.
4. a person cannot be tried more than oce for the same crime, where he has already been acquitteed or convicted earlier:-should not be placed in double jeopardy where he may undego mare than one trial for the same offence if he had already been...
5. all person are equal before the law and entitled to its protection.
6. citizens cannot be discriminated against in relation to the providing of education merely on grounds of religion, race, decent or place of birth.
7. freedom of religion
8. no citizens may be banished from the country.
9. every citizen have the right to freedom of speech, peaceful assembly and assosiation.

	Deductible
Bad debt	Own trade debtor
General provision	-
Specific provision	trade debtor
EPF	Only 19% of the employees’ remuneration	Remuneration is salary, bonus, allowances n commission.
DGIR	Initial contribution by employer 2 approved funds.	Have 2 be approved by DGIR.
Premises	Provision of equipment on alteration/renovation	disabled employees.
Library	Prov/donation library	Restricted 100
Infrastructure	Prov of infrastructure 4 public
child care centre	Maintain child care centre	By employer 4 employee
musical/ cultural	Managing musical/cultural	Approved by ministry
Arts/ cultural/ heritage activity	(foreign art is restricted to 200,000 and total art is restricted to 500,000)	Loc. art 320,000 For. Art 210,000 530,000 F=10,000 so choose higher T=30,000 2 add back=30,000
Scholarship	Scholarship expenses (parents income is less than 5,000)	Higher education in Malaysia.
Halal	Halal certification	Double deduction
Practical Training	Non employee	resident

SECTION 7(1)(a)

An individual must be physically present in Malaysia for a period or periods of at least 182 days in a calender year.

For YA ----, Mr. ---- was a resident under Section 7(1)(a) because he was physically present in Malaysia for at least 182 days (---days)

SECTION 7(1)(b)

An individual must be physically present in Malaysia for a period of less than 182 days and this period is either:-

• Linked To another period of at least 182 consecutive days or
• Linked By another period of at least 182 consecutive days.
  

Any gap during the linked period of 182 consecutive days must be filled by temporary absences, provided the person is in Malaysia both before and after the absence. Temporary absence include:-

• attending seminar/conference/study abroad due 2 job in m'sai.
• ill health involving him or immediate family members.
• social visits of not more than 14 days in total.

For YA ----, Mr. ---- was a resident under Section 7(1)(b) 'Linked To' because his presence in Malysia for YA ---- was linked to least 182 consecutive days in the following YA (YA ----). The temporary absence of -- days (reason..ex..social vsit) is acceptable by law since it is not exceeding 14 days.

For YA ----, Mr. ---- was a resident under Section 7(1)(b) 'Linked By' because his presence in Malysia for YA ---- was linked by least 182 consecutive days in the previous YA (YA ----). The temporary absence of -- days (reason..ex..social vsit) is acceptable by law since it is not exceeding 14 days.

SECTION 7(1)(c)

An individual must be physically preesnt in Malaysia for a period of at least 90 days and 3 out of 4 immediate preceding years is either a resident or physically present in Malaysia for a period of 90 days.

For YA ----, Mr. ---- was a resident under Section 7(1)(c) because he was in Mlaysia at least 90 days in that YA (--days) and also being a resident or in Malysia for at least 90 days in 3 out of 4 immediate preceding YAs (resident YA--, 90 days YA--)

SECTION 7(1)(d)

An individual ,ust be a resident in the following year and also being a resident in 3 immediate preceding years.

For YA ----, Mr. ---- was a resident under Section 7(1)(d) because he was a resident in 3 immediate preceding YA's (YA--, YA--, YA--) and also being a resident in the following YA (YA--)

When a department or a product is unprofitable, decisions must be taken whether 2 shut-down that area or not.

The Quantifiable Cost or Benefits of closure.

• lost of contribution
• savings in specific FC
• penanlties n other costs resulting 4m closure:-redundancy, compensation 2 customers
• additional contribution of alternative use of resource.

Non-quantifiable Costs and Benefits of Closure(value unknown)

• penalties n other costs
• additional contribution alternative
• reorganisation costs
  

A product must be made in house if the relevant costs of making the product in house is less that the cost of buying the product.

Mangament also should consider ather issues in making the decision of wheather 2 buy or make:-

• realibilty of external supplier:-quantity, quality, delivery time, & price stability.
• specialist skills-available outside but not in house
• alternative use of resource
• social:- will redundancy occur if outsource
• customer reaction
• confidentiality.
  

A relevent cash flow is a future incremental cash flow. Relevant cash flow that arice from the following decisions must be considered in making a short-term decision.

FUTURE

• only future CF that that occur as a result of the decisions should be considered.
• sunk and commited costs should be ignored.

INCREMENTAL

• only extra cash flow that inccur as a result of the decision must be considered.
• FC must be ignored unless there is a increment cost attached 2 it.
• Oppurtunity costs should be included.

CASH FLOW

• Only cash items are relevent to the decision
• depreciation is not relevent.
  

COST PLUS PRICING

• suited in business that sell products in large volumes; operate in markets dominated by price.
• Advantages:- simple 2 calculate; widely used and accepeted; justification 4 price increases; SP decisions can be taken by junior managment.
• Disadvantages:- ingnores relationship between price and demand; does not guarantee profit;no attempt 2 establish optimum price; diff absobtion methods are used, diff SP.

MARKET SKIMING PRICING

• charging high price when product is first launced in order 2 maximise short-term profitability.
• condition suitable:- product is new and diffand has little direct competition; product has a short life cycle; demand is uncertain; need high cash flow to increase liquidity.

PENETRATION PRICING

• charging low prices when the product is launced, in order 2 get rapid acceptence.
• conditions suitable:- if the firm wishes 2 increase market price; dicourages competitors 4m entering in the market; demand is high elastic.

COMPLEMENTARY PRODUCT PRICING

• selling complementary product, one at a low price (single purchase), low profit margin, another at higher profit margin (multile).
  
• ex:- printer and cartridges.

PRODUCT LINE PRICING

• selling a line of products which are related, in diff size, colour, quantities and price.
• make the staring line or cheaper products...then increase the price or the other products so that the cunsumer has 2 still buy them 2 ccomplete the set.

VOLUME-DISCOUNTING PRICING

• quantity discounts and cummulatitive quantity discounts
• benefits 2 business:-increase customr's loyalty; attracting new customer; lower sales processing costs; clearance of stock.

PRICE-DISCRIMINATION PRICING

• company sells the same product at diff prices at diff markets.
• condition:- seller must hav some defree of monopoly power; customers can be divided into diff markets.
• dangers:- black market may develope; competitors sell at lower prices.

COST BASED PRICING- accountant's approach

• calculating unit cost and adding mark-up or margin 2 provide profit.
• unit cost may reflect full, production or variable costs only.
• profits may reflect risk involved in the product; competitor's mark up; desired profit; type of costs; type of product.

CUSTOMER BASED PRICING- marketer's approach

• reflects customer's percepyiyionof the benefits they will enjoy 4m the product.
• greater the understanding that you have of ur customer, the better placed you are to price the product.

COMPETITION BASED PRICING

• setting a price based upon the prices of competing product.

Key factor Analysis:-

1. identify the bottleneck constraint.
2. calculate contribution per unit 4 each product.
3. calculate contri per unit divided by the bottleneck resource 4 each unit.
4. rank the products.
5. allocate resources using the ranking/

Linear Programming:-
LP can be used 2 solve profit maximising and cost minimising problems in a limiting factor situation.

Assumptions 4 LP factor analysis:-

• each product always use the same quantity of the scarce source per unit.
• contribution per unit is constant (constant SP and VC)
  
• scenario is short term - ignore fixed costs.

Slack:-
Amount of resource is under-utilised. Max available resource is not used.

Shadow/Dual Price:-
calculating the extra contributin (increase in value) of one extra unit of the scarce resource at its original price. company can use shadow price to calculate the maximum premium that the company is willing to pay 2 get one more unit of the limiting factor. only critical contraints have zero shodow price.

VARIANCES	FAVORABLE	ADVERSE
Material Price	Unforeseen discount received Greater care in purchasing Change in material std	Price increase careless purchasing change in material std
Material Usage	DM used of higher quality Effective use of DM	Defective material Waste; theft
Labour Rate	Pay lower	Wages increase
Idle Time	Always adverse	Mac breakdown; illness
Labour Efficiency	High motivation Better quality of DM and Mac	Lack of training Low motivation
Overhead Expenditure	Saving in cost More economical use of service	Increase in service costs Excessive use of services
Overhead volume	Production greater than budgeted	Production less than budgeted
Selling Price	Unplanned price – increase in market demand, decrease in market supplies	Vice-versa
Sales Volume	Additional demand	Fall in demand, production difficulties.

Inter-relationship between variances:-

• Material Price and Usage - cheaper materials, adverse usage, lower labour efficience.
• Labour rate and efficiency - high labour rate (high skill), high efficiency, favorable usage.
• Selling Price and volume - lower price, higher sales demand