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Employee Cost

CAS - 07 - Companies Law - CAS - 07 - CAS - 7 The following is the COST ACCOUNTING STANDARD 7 (CAS - 7) issued by the Council of The Institute of Cost and Works Accountants of India on "". In this Standard, the standard portions have been set in bold italic type. This standard should be read in the context of the background material, which has been set in normal type. 1 Introduction 1.1 This standard deals with the principles and methods of determining the . 1.2 This standard deals wit .....

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ng those requiring attestation. Definitions 4. The following terms are being used in this standard with the meaning specified. 1[4.1 Abnormal cost: An unusual or atypical cost whose occurrence is usually irregular and unexpected and/ or due to some abnormal situation of the production or operation.] 4.2 Abnormal Idle time: An unusual or atypical employee idle time occurrence of which is usually irregular and unexpected or due to some abnormal situations. E.g.: Idle time due to a strike, lockout .....

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it is ready for despatch until it reaches the ultimate consumer] The cost of any non-manufacturing operations such as packing, repacking, labelling, etc. at an intermediate storage location will be part of distribution cost. 5[4.6 Direct : The cost of employees which can be attributed to a Cost Object in an economically feasible way.] 6[4.7 : The aggregate of all kinds of consideration paid, payable and provisions made for future payments for the services rendered by employees of an enterprise .....

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shall not form part of . 3. Short provisions of prior period made up in current period shall not form part of the in the current period. includes payment made in cash or kind. For example: Salaries, wages, allowances and bonus / incentives. Contribution to provident and other funds. Employee welfare Other benefits - Future benefits Gratuity. Leave encashment. Other retirement/separation benefits. VRS/ other deferred . Other future benefits Benefits generally include Paid holidays. Leave with pay .....

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ween the time for which the employees are paid and the employees' time booked against the cost object. The time for which the employees are paid includes holidays, paid leave and other allowable time offs such as lunch, tea breaks. 7[4.9 Imputed Costs: Hypothetical or notional costs, not involving cash outlay, computed for any purpose.] 8[4.10 Indirect : The cost which cannot be directly attributed to a particular cost object] 4.11 Marketing overheads: Marketing Overheads are also known as S .....

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used interchangeably. 10[4.14 Selling Overheads: Selling Overheads, also known as Selling Costs, are the expenses related to sale of products and include all Indirect Expenses in sales management for the organization] 4.15 Standard Cost: A predetermined cost of resource inputs for the cost object computed with reference to set of technical specifications and efficient operating conditions. Standard costs are used as scale of reference to compare the actual costs with the standard cost with a vi .....

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all also be treated as part of the . 5.3 Remuneration payable to Managerial Personnel including Executive Directors on the Board and other officers of a corporate body under a statute will be considered as part of the of the year under reference whether the whole or part of the remuneration is computed as a percentage of profits. Explanation: Remuneration paid to non-executive directors shall not form part of but shall form part of Administrative Overheads. 5.4 Separation costs related to volunt .....

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ant, Incentive or any such payment received or receivable with respect to any shall be reduced for ascertainment of cost of the cost object to which such amounts are related. 5.9 Any abnormal cost where it is material and quantifiable shall not form part of the . 5.10 Penalties, damages paid to statutory authorities or other third parties shall not form part of the . 5.11 The cost of free housing, free conveyance and any other similar benefits provided to an employee shall be determined at the t .....

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f costs 6.1 Where the Employee services are traceable to a cost object, such Employees' cost shall be assigned to the cost object on the basis such as time consumed or number of employees engaged etc. or similar identifiable measure. 6.2 While determining whether a particular is chargeable to a separate cost object, the principle of materiality shall be adhered to. 6.3 Where the s are not directly traceable to the cost object, these may be assigned on suitable basis like estimates of time ba .....

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t or treated as overheads depending on the economic feasibility and the specific circumstance requiring such overtime. 6.7 Idle time cost shall be assigned direct to the cost object or treated as overheads depending on the economic feasibility and the specific circumstances causing such idle time. Cost of idle time for reasons anticipated like normal lunchtime, holidays etc. is normally loaded in the while arriving at the cost per hour of an Employee/a group of Employees whose time is attributed .....

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