Office Management

Purpose of an Office

The term "office" can be defined as any place where records are prepared, handled and preserved for subsequent reference, and making them available as and when required.

Office Management

Modern offices remain the integral part of organizations. Managers primarily depend on the office for their managerial functions. These offices collect and store necessary data for the managers to evaluate and take necessary decisions based on the records available in the office. Availability of previous records makes the manager to take fast and accurate decisions and give directions. It makes the job easier for the manager. It is the office that provides the documents, records, and data of the past and present. So modern offices play a vital role in the business of modern organizations. In our daily life we visit many offices like - post office, government office, municipal office, school office, college office, transport office, electricity office, telephone office, company office, the office of the advocate, office of professionals, etc. We visit these offices for some work or the other where we can get our work done within the shortest possible time. If you are able to manage the work done easily and without much hassle, you feel it is an efficient office. However, if you are not able to get the work completed even after frequent visits and efforts, you consider it an inefficient office. Private offices are considered as efficient offices than the government offices where you get stuck for absurd reasons.

Meaning of Office

Technology is growing rapidly. Human relations are spreading all over the world. The market is now becoming global. Technology is changing rapidly. If an organization has to sustain in this ever-changing world, they need to change according to the current global trend. In the present circumstances it is the requirement of every organization to keep a watch over the changes and provide necessary information, records, and data for the various purposes of different persons in the organization on the right time at the right manner in an economical way as per the need. Presently it is the fundamental requirement of an enterprise to perform such work. And these activities remain the important services performed in an office. Maintaining records, contact details, communication, and management of persons and their records are performed in the office.

When you think about an office, the immediate impression is that a clerk sitting on a chair with some files on the table and some officers sitting and completing some paperwork in a particular building. But doing paper work in a particular place routinely is not the key function of the office. The traditional view of an office held even today is that office work is concerned exclusively with the records of the organization. Making records, preserving records, and using records at the appropriate time for different departments. Another view is that providing clerical assistance to the various departments represent the function of an office. Which does not have any productive activity, but it only performs routine clerical activity is the general view about an office.

The traditional view does not explain all the functions performed inside the office. The modern view is that the office is the administrative center of the business where records are prepared, preserved, and made available for the purpose of efficient management of the organization.

In a broad sense office represents service functions which involve clerical work, receiving data and records, supplying data and records, preserving data and records, analyzing data, mailing letters, typing, and duplicating documents, preserving documents, maintaining files, receiving letters, assisting communication, etc. for the efficient management of the organization. All these clerical activities are performed in the office and constitute the office services. The term "office" can be defined as any place where records are prepared, handled and preserved for subsequent reference, and making them available as and when required.


It is the nature of the work that is significant neither the person who does it nor the place where it is performed.

Scope of the Office Activities

Creating records, collecting data, preserving records, processing, and supplying information to business managers who require it for decision making are the main activities performed in an office. It additionally includes the processing and presenting numerical data in the form of reports and statements, facilitating internal and external communication, handling outward and inward correspondence.

Record management includes receiving various documents, copying, filing papers, classification of files, preserving files, duplicating records, and arranging them in a manner to locate the same easily and quickly which needs to be made available to the suitable person at the right time and in the right form. Public relations through the press release and notifications and to respond to public inquiries and complaints, collecting public opinion and conveying it to the management also comes under the scope of the office function.

 

Objectives and Basic Concepts of Accounting

Accounting Maintains Systematic Records

The core objective of accounting is to record financial transactions like cash payments and cash receipts, purchase and sale of goods, etc. systematically

Basic Concepts of Accounting

In business, many transactions take place in a day. It is impossible to remember all transactions; hence, there is a need to record them. If you were asked to purchase several items and given $10,000, you will find it difficult to remember the details of various items purchased by you. So you must write it in a notebook or a piece of paper. In business, there are hundreds and thousands of transactions are taking place in a day. It becomes practically impossible to remember all those transactions.

Unless you record them properly, it will be difficult for you to determine the source of income and expenditure which makes it difficult for you to analyze the performance of your business. If you are supplying your goods on credit, you need to record the transactions. Otherwise, it will be challenging for you to determine the amount to be received by you. You need to record the transactions of goods received to ascertain the amount you owe to your supplier at a given point in time. For controlling your business properly, you have to record all the transactions systematically. Accounting serves the purpose of recording the transaction systematically.

Accounting helps the businessman to record all transactions of his business. By recording the transactions, the businessman will be able to ascertain whether there is a profit or loss at the end of a particular period. He can also communicate this information to the parties interested in his business such as his partners, investors, bankers who lend capital, and the government who claim tax on his profit, etc.

Whichever the form of business organization – a co-operative society, a sole proprietorship, a company, or a partnership – it has to maintain proper accounts. For decision making, planning, and controlling the business, management depends on accounting. Banks and creditors look at the financial results to determine the creditworthiness and the government looks at the financial results for the tax purpose.

Accounting is necessary not only for business organizations but also for non-business organizations like clubs, charitable societies, hospitals, schools, colleges, churches, and religious organizations.

Let us look at the core concepts employed in the double-entry method of bookkeeping. Altogether it is the debiting and crediting of amounts into the various accounts.

Objectives of Accounting

To Maintain Systematic Records: The core objective of accounting is to record financial transactions like cash payments and cash receipts, purchase and sale of goods, etc. systematically. Besides, it performs the function of recording assets and liabilities of the business properly.

To Ascertain the Net Profit or a Net Loss of the Business: A businessman is interested in knowing the result of his business. Whether it is making a profit or a loss? If it is making a loss, why? Which operation is to be monitored closely, etc? A proper record of receipt and payments can reveal whether the business is making a profit or loss. So, one of the objectives of accounting is to ascertain the net result of the business operation. To find out whether it is making a profit or loss.

To Ascertain the Financial Position of the Business: Another objective of accounting is to find out the financial position of the business. How much money is earned during the year? What are the assets? What are the liabilities? What is the position of the stock of finished goods and raw materials? The difference between the assets and liabilities is the net financial position of the business. By recording transactions, investments, assets, and liabilities in monetary terms, the businessman would be able to report the financial position of the business. A systematic record of assets and liabilities helps the preparation of a position statement called the Balance Sheet, which provides the financial position of the business.

To Provide Accounting Information to the Interested Parties: There are other external parties like bankers, investors, creditors, tax authorities, prospective investors interested in knowing the financial information of the business. They need it to ascertain the profitability and financial health of the business. This information can be communicated to the interested parties through the annual report of the company. Proper and systematic accounting helps the accountants or auditors to prepare such an annual financial report of the company.

 

How to make a difference in my behavior?

Behavioral problems are common among individuals of all genders and backgrounds. Everyone, regardless of their position or sex, can be affected in different areas. While someone may excel in one aspect, they may struggle in another. You might notice behavioral issues in your spouse, while perceiving your friend's partner as well-behaved and perfect. However, if you were to ask your friend, they would likely mention setbacks and challenges they have encountered in their own relationship.

None of us are perfect, yet we often seek perfection in a spouse, child, or friend. Instead of trying to correct others' behavioral problems, it is more productive to focus on addressing our own.

Let me share a personal example. I used to have a habit of sneaking sweets from my mother's cupboard when I was a child. My mother tried to keep sugary treats out of our reach, but my love for them drove me to find their hiding spots. I became quite skilled at discovering and indulging in them without her knowledge. My mother even arranged the cookie box in a way that would reveal if someone tampered with it, but I was cautious and knew how to manipulate its positioning and lid. I had become quite the skilled thief.

Searching for cookies felt like an exciting detective adventure. I also had a tendency to consume excessive amounts of sugar, which led me to resort to stealing since my mother restricted my intake. Over time, this behavior became a bad habit and caused me trouble on numerous occasions.

Eventually, my behavior became problematic. As I entered the workforce, I noticed my colleagues bringing cookies to the office and keeping them in the kitchen. I would sneak in and take them, often getting caught in the act. I realized I needed to change. However, whenever I saw cookies, I couldn't resist the temptation. I desperately needed a change and felt guilty after each instance of indulgence.

Here's how I managed to break my stealing habit: One day, I made a firm decision to change. I told myself that I would no longer steal, starting from that day forward. Sometimes I succeeded, but on other occasions, I found myself reverting to my old ways. Each time, I felt remorseful and resolved not to repeat the behavior. It was a challenging journey, but gradually, over time, I managed to transform my behavior. I avoided going to the kitchen altogether, which helped me resist the temptation.

Even when I spotted cookie boxes, I would remind myself that they were not meant for me. Through determination, I successfully achieved the behavioral change that I desperately needed. I made every effort and eventually succeeded. I had read that if you consistently practice something for 30 days, it becomes a habit, but I cannot personally vouch for the truthfulness of that statement.

Although I have successfully changed my habit, some of my colleagues still suspect me of taking cookies. I have to bear the guilt as others take advantage of my past actions, but that is another story altogether.

Another behavioral problem I faced involved fantasizing about the opposite sex. Since my early adulthood, I would create mental images of women I encountered in my daily life or during my commute to work or school. This habit involved envisioning their bodies in a sexual manner. Unfortunately, it became a costly habit for me. Regardless of the situation, whether in class, church, on a bus, or a train, these thoughts would invade my mind. I initially believed that marriage would put an end to these thoughts, but they persisted even after tying the knot.

I encountered fellow students who could discuss sex but manage to control their thoughts. However, I struggled to do so, constantly battling with these intrusive thoughts. It affected my studies, causing repeated failures. I was addicted to these thoughts, which would distract me even when I was reading my books. I often felt guilty about these thoughts and attempted to change, but my efforts were largely unsuccessful. They significantly impacted my behavior, making me avoid interactions with the opposite sex. I sought refuge in solitude, indulging in unworthy fantasies and daydreams.

Desiring change, I made various attempts to resist these thoughts. However, the more I resisted, the more forcefully they persisted. It felt as though they grew stronger and more persistent with each resistance. In my quest for deliverance, I turned to the church and earnestly prayed for guidance. I noticed that these thoughts primarily emerged when I had idle time and was not engaged in any particular activity, such as during bus rides or when alone.

After purchasing a bike for my daily commute, I utilized that time to pray and focus on my faith. At work, I occupied my free time by writing articles for a website, which absorbed my attention and provided respite from these unwanted thoughts. In hindsight, I now realize how many hours and days I wasted dwelling on these unhealthy and inappropriate thoughts. Such fixation on sex consumes one's attention and prevents engagement in other meaningful activities. Occasionally, these thoughts manifested through behavior, but most of the time, they remained private due to the accompanying shame.

I discovered that engaging in creative pursuits and redirecting my thoughts toward productive endeavors, such as money-making ventures or other positive outlets, proved to be an effective solution. Additionally, harboring anger within oneself is another detrimental behavior, but that is a topic for another discussion.

Satan, the cunning deceiver, often seeks to manipulate our thoughts in order to divert us from godly pursuits and lead us toward sin. Our minds are a battleground where the forces of good and evil fiercely contend for control. Satan understands the power of our thoughts and realizes that if he can influence and corrupt our thinking, he can sway our actions and distance us from a relationship with God.

The enemy employs various tactics to infiltrate our minds. He whispers subtle lies, tempting us with alluring fantasies and sinful desires. He preys upon our weaknesses, exploiting our vulnerabilities and planting seeds of doubt and rebellion. Satan understands that our thoughts are the starting point for our actions, and he strategically works to captivate our minds with worldly distractions, selfish ambitions, and impure thoughts.

By infiltrating our thoughts, Satan attempts to cloud our judgment and distort our perception of truth. He cunningly distorts God's Word, injecting doubt and questioning into our minds. He skews our understanding of right and wrong, convincing us that our sinful inclinations are merely harmless indulgences. He tempts us with immediate gratification, luring us away from the long-term blessings and spiritual growth that come from aligning our thoughts with God's will.

Furthermore, Satan capitalizes on our vulnerabilities and past experiences to fuel negative thoughts and emotions. He stokes the fires of anger, envy, and bitterness, manipulating our minds into dwelling on resentments and grudges. By magnifying our insecurities and fears, he seeks to paralyze us with self-doubt and hinder our progress in God's purpose for our lives.

To counteract Satan's schemes, we must remain vigilant and guard our minds. We are called to renew our thoughts and align them with God's truth. Through prayer, meditation, and the study of Scripture, we can equip ourselves with the spiritual armor necessary to resist the enemy's attacks. By meditating on God's promises, we can fill our minds with thoughts of love, joy, peace, and righteousness.

It is important to surround ourselves with fellow believers who can encourage and hold us accountable in our thought life. Together, we can offer support, pray for one another, and remind each other of the power and victory we have in Christ. Additionally, cultivating a lifestyle of worship and praise can help shift our focus from worldly distractions to the glory and goodness of God.

In the face of Satan's attempts to divert us toward sin through our thoughts, let us remember that we have the authority and strength through Christ to resist him. By actively surrendering our minds to the Lord, seeking His guidance, and submitting to the leading of the Holy Spirit, we can overcome the enemy's tactics and experience the transformative power of godly thinking.

 

It will certainly come and will not delay

Updated on November 11, 2013

Habakkuk 2:3 For the revelation awaits an appointed time; it speaks of the end  and will not prove false. Though it linger, wait for it; it will certainly come and will not delay.

Joseph, a young man of seventeen, was tending the flocks with his brothers, the sons of Bilhah and the sons of Zilpah, his father's wives, and he brought their father a bad report about them.  Now Israel loved Joseph more than any of his other sons, because he had been born to him in his old age; and he made a richly ornamented robe for him.  When his brothers saw that their father loved him more than any of them, they hated him and could not speak a kind word to him. Joseph had a dream, and when he told it to his brothers, they hated him all the more. He said to them, "Listen to this dream I had: We were binding sheaves of grain out in the field when suddenly my sheaf rose and stood upright, while your sheaves gathered around mine and bowed down to it."

His brothers said to him, "Do you intend to reign over us? Will you actually rule us?" And they hated him all the more because of his dream and what he had said. Then he had another dream, and he told it to his brothers. "Listen," he said, "I had another dream, and this time the sun and moon and eleven stars were bowing down to me."  When he told his father as well as his brothers, his father rebuked him and said, "What is this dream you had? Will your mother and I and your brothers actually come and bow down to the ground before you?" His brothers were jealous of him, but his father kept the matter in mind.

Now his brothers had gone to graze their father's flocks near Shechem, and Israel said to Joseph, "As you know, your brothers are grazing the flocks near Shechem. Come, I am going to send you to them." 
"Very well," he replied.
So he said to him, "Go and see if all is well with your brothers and with the flocks, and bring word back to me." Then he sent him off from the Valley of Hebron. When Joseph arrived at Shechem, a man found him wandering around in the fields and asked him, "What are you looking for?" He replied, "I'm looking for my brothers. Can you tell me where they are grazing their flocks?" "They have moved on from here," the man answered. "I heard them say, 'Let's go to Dothan.' "

So Joseph went after his brothers and found them near Dothan. But they saw him in the distance, and before he reached them, they plotted to kill him. "Here comes that dreamer!" they said to each other. "Come now, let's kill him and throw him into one of these cisterns and say that a ferocious animal devoured him. Then we'll see what comes of his dreams." When Reuben heard this, he tried to rescue him from their hands. "Let's not take his life," he said. "Don't shed any blood. Throw him into this cistern here in the desert, but don't lay a hand on him." Reuben said this to rescue him from them and take him back to his father.

So when Joseph came to his brothers, they stripped him of his robe—the richly ornamented robe he was wearing and they took him and threw him into the cistern. Now the cistern was empty; there was no water in it. As they sat down to eat their meal, they looked up and saw a caravan of Ishmaelites coming from Gilead. Their camels were loaded with spices, balm and myrrh, and they were on their way to take them down to Egypt. Judah said to his brothers, "What will we gain if we kill our brother and cover up his blood? Come, let's sell him to the Ishmaelites and not lay our hands on him; after all, he is our brother, our own flesh and blood." His brothers agreed. So when the Midianite merchants came by, his brothers pulled Joseph up out of the cistern and sold him for twenty shekels of silver to the Ishmaelites, who took him to Egypt.  When Reuben returned to the cistern and saw that Joseph was not there, he tore his clothes. He went back to his brothers and said, "The boy isn't there! Where can I turn now?" Then they got Joseph's robe, slaughtered a goat and dipped the robe in the blood. They took the ornamented robe back to their father and said, "We found this. Examine it to see whether it is your son's robe."

He recognized it and said, "It is my son's robe! Some ferocious animal has devoured him. Joseph has surely been torn to pieces." Then Jacob tore his clothes, put on sackcloth and mourned for his son many days. All his sons and daughters came to comfort him, but he refused to be comforted. "No," he said, "in mourning will I go down to the grave to my son." So his father wept for him. Meanwhile, the Midianites sold Joseph in Egypt to Potiphar, one of Pharaoh's officials, the captain of the guard.  The LORD was with Joseph and he prospered, and he lived in the house of his Egyptian master.  When his master saw that the LORD was with him and that the LORD gave him success in everything he did, Joseph found favor in his eyes and became his attendant. Potiphar put him in charge of his household, and he entrusted to his care everything he owned. From the time he put him in charge of his household and of all that he owned, the LORD blessed the household of the Egyptian because of Joseph. The blessing of the LORD was on everything Potiphar had, both in the house and in the field. So he left in Joseph's care everything he had; with Joseph in charge, he did not concern himself with anything except the food he ate. Now Joseph was well-built and handsome,  and after a while his master's wife took notice of Joseph and said, "Come to bed with me!" 

But he refused. "With me in charge," he told her, "my master does not concern himself with anything in the house; everything he owns he has entrusted to my care.  No one is greater in this house than I am. My master has withheld nothing from me except you, because you are his wife. How then could I do such a wicked thing and sin against God?" And though she spoke to Joseph day after day, he refused to go to bed with her or even be with her.

One day he went into the house to attend to his duties, and none of the household servants was inside. She caught him by his cloak and said, "Come to bed with me!" But he left his cloak in her hand and ran out of the house.  When she saw that he had left his cloak in her hand and had run out of the house, she called her household servants. "Look," she said to them, "this Hebrew has been brought to us to make sport of us! He came in here to sleep with me, but I screamed. When he heard me scream for help, he left his cloak beside me and ran out of the house." She kept his cloak beside her until his master came home. Then she told him this story: "That Hebrew slave you brought us came to me to make sport of me. But as soon as I screamed for help, he left his cloak beside me and ran out of the house." When his master heard the story his wife told him, saying, "This is how your slave treated me," he burned with anger.  Joseph's master took him and put him in prison, the place where the king's prisoners were confined.

But while Joseph was there in the prison, the LORD was with him; he showed him kindness and granted him favor in the eyes of the prison warden. So the warden put Joseph in charge of all those held in the prison, and he was made responsible for all that was done there. The warden paid no attention to anything under Joseph's care, because the LORD was with Joseph and gave him success in whatever he did. Some time later, the cupbearer and the baker of the king of Egypt offended their master, the king of Egypt.  Pharaoh was angry with his two officials, the chief cupbearer and the chief baker, and put them in custody in the house of the captain of the guard, in the same prison where Joseph was confined. The captain of the guard assigned them to Joseph, and he attended them. After they had been in custody for some time, each of the two men—the cupbearer and the baker of the king of Egypt, who were being held in prison—had a dream the same night, and each dream had a meaning of its own.

When Joseph came to them the next morning, he saw that they were dejected. So he asked Pharaoh's officials who were in custody with him in his master's house, "Why are your faces so sad today?"
"We both had dreams," they answered, "but there is no one to interpret them."  Then Joseph said to them, "Do not interpretations belong to God? Tell me your dreams."  So the chief cupbearer told Joseph his dream. He said to him, "In my dream I saw a vine in front of me, and on the vine were three branches. As soon as it budded, it blossomed, and its clusters ripened into grapes. Pharaoh's cup was in my hand, and I took the grapes, squeezed them into Pharaoh's cup and put the cup in his hand." "This is what it means," Joseph said to him. "The three branches are three days. Within three days Pharaoh will lift up your head and restore you to your position, and you will put Pharaoh's cup in his hand, just as you used to do when you were his cupbearer. But when all goes well with you, remember me and show me kindness; mention me to Pharaoh and get me out of this prison. For I was forcibly carried off from the land of the Hebrews, and even here I have done nothing to deserve being put in a dungeon."

When the chief baker saw that Joseph had given a favorable interpretation, he said to Joseph, "I too had a dream: On my head were three baskets of bread. In the top basket were all kinds of baked goods for Pharaoh, but the birds were eating them out of the basket on my head."   "This is what it means," Joseph said. "The three baskets are three days.  Within three days Pharaoh will lift off your head and hang you on a tree. And the birds will eat away your flesh." Now the third day was Pharaoh's birthday, and he gave a feast for all his officials. He lifted up the heads of the chief cupbearer  in the presence of his officials:  He restored the chief cupbearer to his position, so that he once again put the cup into Pharaoh's hand, but he hanged  the chief baker, just as Joseph had said to them in his interpretation.  The chief cupbearer, however, did not remember Joseph; he forgot him.

When two full years had passed, Pharaoh had a dream: He was standing by the Nile, when out of the river there came up seven cows, sleek and fat, and they grazed among the reeds. After them, seven other cows, ugly and gaunt, came up out of the Nile and stood beside those on the riverbank. And the cows that were ugly and gaunt ate up the seven sleek, fat cows. Then Pharaoh woke up. He fell asleep again and had a second dream: Seven heads of grain, healthy and good, were growing on a single stalk. After them, seven other heads of grain sprouted—thin and scorched by the east wind. The thin heads of grain swallowed up the seven healthy, full heads. Then Pharaoh woke up; it had been a dream.  In the morning his mind was troubled, so he sent for all the magicians and wise men of Egypt. Pharaoh told them his dreams, but no one could interpret them for him.

Then the chief cupbearer said to Pharaoh, "Today I am reminded of my shortcomings. Pharaoh was once angry with his servants, and he imprisoned me and the chief baker in the house of the captain of the guard. Each of us had a dream the same night, and each dream had a meaning of its own. Now a young Hebrew was there with us, a servant of the captain of the guard. We told him our dreams, and he interpreted them for us, giving each man the interpretation of his dream.  And things turned out exactly as he interpreted them to us: I was restored to my position, and the other man was hanged."

So Pharaoh sent for Joseph, and he was quickly brought from the dungeon. When he had shaved and changed his clothes, he came before Pharaoh. Pharaoh said to Joseph, "I had a dream, and no one can interpret it. But I have heard it said of you that when you hear a dream you can interpret it." "I cannot do it," Joseph replied to Pharaoh, "but God will give Pharaoh the answer he desires." Then Pharaoh said to Joseph, "In my dream I was standing on the bank of the Nile, when out of the river there came up seven cows, fat and sleek, and they grazed among the reeds.  After them, seven other cows came up—scrawny and very ugly and lean. I had never seen such ugly cows in all the land of Egypt.  The lean, ugly cows ate up the seven fat cows that came up first.  But even after they ate them, no one could tell that they had done so; they looked just as ugly as before. Then I woke up.

"In my dreams I also saw seven heads of grain, full and good, growing on a single stalk.  After them, seven other heads sprouted—withered and thin and scorched by the east wind. The thin heads of grain swallowed up the seven good heads. I told this to the magicians, but none could explain it to me." Then Joseph said to Pharaoh, "The dreams of Pharaoh are one and the same. God has revealed to Pharaoh what he is about to do. The seven good cows are seven years, and the seven good heads of grain are seven years; it is one and the same dream. The seven lean, ugly cows that came up afterward are seven years, and so are the seven worthless heads of grain scorched by the east wind: They are seven years of famine.

"It is just as I said to Pharaoh: God has shown Pharaoh what he is about to do. Seven years of great abundance are coming throughout the land of Egypt, but seven years of famine will follow them. Then all the abundance in Egypt will be forgotten, and the famine will ravage the land. The abundance in the land will not be remembered, because the famine that follows it will be so severe. The reason the dream was given to Pharaoh in two forms is that the matter has been firmly decided by God, and God will do it soon.

"And now let Pharaoh look for a discerning and wise man and put him in charge of the land of Egypt. Let Pharaoh appoint commissioners over the land to take a fifth of the harvest of Egypt during the seven years of abundance. They should collect all the food of these good years that are coming and store up the grain under the authority of Pharaoh, to be kept in the cities for food. This food should be held in reserve for the country, to be used during the seven years of famine that will come upon Egypt, so that the country may not be ruined by the famine." The plan seemed good to Pharaoh and to all his officials. So Pharaoh asked them, "Can we find anyone like this man, one in whom is the spirit of God?"

Then Pharaoh said to Joseph, "Since God has made all this known to you, there is no one so discerning and wise as you. You shall be in charge of my palace, and all my people are to submit to your orders. Only with respect to the throne will I be greater than you."  So Pharaoh said to Joseph, "I hereby put you in charge of the whole land of Egypt." Then Pharaoh took his signet ring from his finger and put it on Joseph's finger. He dressed him in robes of fine linen and put a gold chain around his neck.  He had him ride in a chariot as his second-in-command, and men shouted before him, "Make way!" Thus he put him in charge of the whole land of Egypt.

Then Pharaoh said to Joseph, "I am Pharaoh, but without your word no one will lift hand or foot in all Egypt." Pharaoh gave Joseph the name Zaphenath-Paneah and gave him Asenath daughter of Potiphera, priest of On, to be his wife. And Joseph went throughout the land of Egypt.  Joseph was thirty years old when he entered the service of Pharaoh king of Egypt. And Joseph went out from Pharaoh's presence and traveled throughout Egypt. During the seven years of abundance the land produced plentifully. Joseph collected all the food produced in those seven years of abundance in Egypt and stored it in the cities. In each city he put the food grown in the fields surrounding it. Joseph stored up huge quantities of grain, like the sand of the sea; it was so much that he stopped keeping records because it was beyond measure.  Before the years of famine came, two sons were born to Joseph by Asenath daughter of Potiphera, priest of On. Joseph named his firstborn Manasseh and said, "It is because God has made me forget all my trouble and all my father's household." The second son he named Ephraim and said, "It is because God has made me fruitful in the land of my suffering."

The seven years of abundance in Egypt came to an end, and the seven years of famine began, just as Joseph had said. There was famine in all the other lands, but in the whole land of Egypt there was food. When all Egypt began to feel the famine, the people cried to Pharaoh for food. Then Pharaoh told all the Egyptians, "Go to Joseph and do what he tells you." When the famine had spread over the whole country, Joseph opened the storehouses and sold grain to the Egyptians, for the famine was severe throughout Egypt. And all the countries came to Egypt to buy grain from Joseph, because the famine was severe in all the world.

When Jacob learned that there was grain in Egypt, he said to his sons, "Why do you just keep looking at each other?" He continued, "I have heard that there is grain in Egypt. Go down there and buy some for us, so that we may live and not die."  Then ten of Joseph's brothers went down to buy grain from Egypt. But Jacob did not send Benjamin, Joseph's brother, with the others, because he was afraid that harm might come to him. So Israel's sons were among those who went to buy grain, for the famine was in the land of Canaan also. Now Joseph was the governor of the land, the one who sold grain to all its people. So when Joseph's brothers arrived, they bowed down to him with their faces to the ground. (The first dream of Joseph become true) As soon as Joseph saw his brothers, he recognized them, but he pretended to be a stranger and spoke harshly to them. "Where do you come from?" he asked. "From the land of Canaan," they replied, "to buy food."

Although Joseph recognized his brothers, they did not recognize him. Then he remembered his dreams about them and said to them, "You are spies! You have come to see where our land is unprotected."  "No, my lord," they answered. "Your servants have come to buy food. We are all the sons of one man. Your servants are honest men, not spies." "No!" he said to them. "You have come to see where our land is unprotected."

But they replied, "Your servants were twelve brothers, the sons of one man, who lives in the land of Canaan. The youngest is now with our father, and one is no more."   Joseph said to them, "It is just as I told you: You are spies!  And this is how you will be tested: As surely as Pharaoh lives, you will not leave this place unless your youngest brother comes here. Send one of your number to get your brother; the rest of you will be kept in prison, so that your words may be tested to see if you are telling the truth. If you are not, then as surely as Pharaoh lives, you are spies!" And he put them all in custody for three days.

On the third day, Joseph said to them, "Do this and you will live, for I fear God: If you are honest men, let one of your brothers stay here in prison, while the rest of you go and take grain back for your starving households. But you must bring your youngest brother to me, so that your words may be verified and that you may not die." This they proceeded to do. They said to one another, "Surely we are being punished because of our brother. We saw how distressed he was when he pleaded with us for his life, but we would not listen; that's why this distress has come upon us."

Reuben replied, "Didn't I tell you not to sin against the boy? But you wouldn't listen! Now we must give an accounting for his blood."  They did not realize that Joseph could understand them, since he was using an interpreter.  He turned away from them and began to weep, but then turned back and spoke to them again. He had Simeon taken from them and bound before their eyes. Joseph gave orders to fill their bags with grain, to put each man's silver back in his sack, and to give them provisions for their journey. After this was done for them, they loaded their grain on their donkeys and left.  At the place where they stopped for the night one of them opened his sack to get feed for his donkey, and he saw his silver in the mouth of his sack. "My silver has been returned," he said to his brothers. "Here it is in my sack." Their hearts sank and they turned to each other trembling and said, "What is this that God has done to us?"

When they came to their father Jacob in the land of Canaan, they told him all that had happened to them. They said, "The man who is lord over the land spoke harshly to us and treated us as though we were spying on the land. But we said to him, 'We are honest men; we are not spies. We were twelve brothers, sons of one father. One is no more, and the youngest is now with our father in Canaan.'  "Then the man who is lord over the land said to us, 'This is how I will know whether you are honest men: Leave one of your brothers here with me, and take food for your starving households and go. But bring your youngest brother to me so I will know that you are not spies but honest men. Then I will give your brother back to you, and you can trade in the land.' "

As they were emptying their sacks, there in each man's sack was his pouch of silver! When they and their father saw the money pouches, they were frightened. Their father Jacob said to them, "You have deprived me of my children. Joseph is no more and Simeon is no more, and now you want to take Benjamin. Everything is against me!" Then Reuben said to his father, "You may put both of my sons to death if I do not bring him back to you. Entrust him to my care, and I will bring him back."  But Jacob said, "My son will not go down there with you; his brother is dead and he is the only one left. If harm comes to him on the journey you are taking, you will bring my gray head down to the grave in sorrow."

Now the famine was still severe in the land. So when they had eaten all the grain they had brought from Egypt, their father said to them, "Go back and buy us a little more food." But Judah said to him, "The man warned us solemnly, 'You will not see my face again unless your brother is with you.' If you will send our brother along with us, we will go down and buy food for you. But if you will not send him, we will not go down, because the man said to us, 'You will not see my face again unless your brother is with you.'" Israel asked, "Why did you bring this trouble on me by telling the man you had another brother?"

They replied, "The man questioned us closely about ourselves and our family. 'Is your father still living?' he asked us. 'Do you have another brother?' We simply answered his questions. How were we to know he would say, 'Bring your brother down here'?" Then Judah said to Israel his father, "Send the boy along with me and we will go at once, so that we and you and our children may live and not die.  I myself will guarantee his safety; you can hold me personally responsible for him. If I do not bring him back to you and set him here before you, I will bear the blame before you all my life. As it is, if we had not delayed, we could have gone and returned twice."

Then their father Israel said to them, "If it must be, then do this: Put some of the best products of the land in your bags and take them down to the man as a gift—a little balm and a little honey, some spices and myrrh, some pistachio nuts and almonds. Take double the amount of silver with you, for you must return the silver that was put back into the mouths of your sacks. Perhaps it was a mistake. Take your brother also and go back to the man at once. And may God Almighty grant you mercy before the man so that he will let your other brother and Benjamin come back with you."

So the men took the gifts and double the amount of silver, and Benjamin also. They hurried down to Egypt and presented themselves to Joseph. When Joseph saw Benjamin with them, he said to the steward of his house, "Take these men to my house, slaughter an animal and prepare dinner; they are to eat with me at noon."
The man did as Joseph told him and took the men to Joseph's house. Now the men were frightened when they were taken to his house. They thought, "We were brought here because of the silver that was put back into our sacks the first time. He wants to attack us and overpower us and seize us as slaves and take our donkeys."

So they went up to Joseph's steward and spoke to him at the entrance to the house. "Please, sir," they said, "we came down here the first time to buy food. But at the place where we stopped for the night we opened our sacks and each of us found his silver—the exact weight—in the mouth of his sack. So we have brought it back with us. We have also brought additional silver with us to buy food. We don't know who put our silver in our sacks." 

"It's all right," he said. "Don't be afraid. Your God, the God of your father, has given you treasure in your sacks; I received your silver." Then he brought Simeon out to them.  The steward took the men into Joseph's house, gave them water to wash their feet and provided fodder for their donkeys. They prepared their gifts for Joseph's arrival at noon, because they had heard that they were to eat there.  When Joseph came home, they presented to him the gifts they had brought into the house, and they bowed down before him to the ground. He asked them how they were, and then he said, "How is your aged father you told me about? Is he still living?"  They replied, "Your servant our father is still alive and well." And they bowed low to pay him honor.

As he looked about and saw his brother Benjamin, his own mother's son, he asked, "Is this your youngest brother, the one you told me about?" And he said, "God be gracious to you, my son." Deeply moved at the sight of his brother, Joseph hurried out and looked for a place to weep. He went into his private room and wept there. After he had washed his face, he came out and, controlling himself, said, "Serve the food."  They served him by himself, the brothers by themselves, and the Egyptians who ate with him by themselves, because Egyptians could not eat with Hebrews, for that is detestable to Egyptians. The men had been seated before him in the order of their ages, from the firstborn to the youngest; and they looked at each other in astonishment. When portions were served to them from Joseph's table, Benjamin's portion was five times as much as anyone else's. So they feasted and drank freely with him.

Now Joseph gave these instructions to the steward of his house: "Fill the men's sacks with as much food as they can carry, and put each man's silver in the mouth of his sack. Then put my cup, the silver one, in the mouth of the youngest one's sack, along with the silver for his grain." And he did as Joseph said.

As morning dawned, the men were sent on their way with their donkeys. They had not gone far from the city when Joseph said to his steward, "Go after those men at once, and when you catch up with them, say to them, 'Why have you repaid good with evil? Isn't this the cup my master drinks from and also uses for divination? This is a wicked thing you have done.' " When he caught up with them, he repeated these words to them. But they said to him, "Why does my lord say such things? Far be it from your servants to do anything like that! We even brought back to you from the land of Canaan the silver we found inside the mouths of our sacks. So why would we steal silver or gold from your master's house?  If any of your servants is found to have it, he will die; and the rest of us will become my lord's slaves."

"Very well, then," he said, "let it be as you say. Whoever is found to have it will become my slave; the rest of you will be free from blame."  Each of them quickly lowered his sack to the ground and opened it. Then the steward proceeded to search, beginning with the oldest and ending with the youngest. And the cup was found in Benjamin's sack. At this, they tore their clothes. Then they all loaded their donkeys and returned to the city.  Joseph was still in the house when Judah and his brothers came in, and they threw themselves to the ground before him. Joseph said to them, "What is this you have done? Don't you know that a man like me can find things out by divination?"

"What can we say to my lord?" Judah replied. "What can we say? How can we prove our innocence? God has uncovered your servants' guilt. We are now my lord's slaves—we ourselves and the one who was found to have the cup."

But Joseph said, "Far be it from me to do such a thing! Only the man who was found to have the cup will become my slave. The rest of you, go back to your father in peace."

Then Judah went up to him and said: "Please, my lord, let your servant speak a word to my lord. Do not be angry with your servant, though you are equal to Pharaoh himself.  My lord asked his servants, 'Do you have a father or a brother?' And we answered, 'We have an aged father, and there is a young son born to him in his old age. His brother is dead, and he is the only one of his mother's sons left, and his father loves him.'

"Then you said to your servants, 'Bring him down to me so I can see him for myself.' And we said to my lord, 'The boy cannot leave his father; if he leaves him, his father will die.' But you told your servants, 'Unless your youngest brother comes down with you, you will not see my face again.' When we went back to your servant my father, we told him what my lord had said.  "Then our father said, 'Go back and buy a little more food.' But we said, 'We cannot go down. Only if our youngest brother is with us will we go. We cannot see the man's face unless our youngest brother is with us.'

"Your servant my father said to us, 'You know that my wife bore me two sons. One of them went away from me, and I said, "He has surely been torn to pieces." And I have not seen him since. If you take this one from me too and harm comes to him, you will bring my gray head down to the grave in misery.' "So now, if the boy is not with us when I go back to your servant my father and if my father, whose life is closely bound up with the boy's life, sees that the boy isn't there, he will die. Your servants will bring the gray head of our father down to the grave in sorrow.  Your servant guaranteed the boy's safety to my father. I said, 'If I do not bring him back to you, I will bear the blame before you, my father, all my life!'  "Now then, please let your servant remain here as my lord's slave in place of the boy, and let the boy return with his brothers. How can I go back to my father if the boy is not with me? No! Do not let me see the misery that would come upon my father."


Then Joseph could no longer control himself before all his attendants, and he cried out, "Have everyone leave my presence!" So there was no one with Joseph when he made himself known to his brothers. And he wept so loudly that the Egyptians heard him, and Pharaoh's household heard about it. Joseph said to his brothers, "I am Joseph! Is my father still living?" But his brothers were not able to answer him, because they were terrified at his presence.  Then Joseph said to his brothers, "Come close to me." When they had done so, he said, "I am your brother Joseph, the one you sold into Egypt! And now, do not be distressed and do not be angry with yourselves for selling me here, because it was to save lives that God sent me ahead of you. For two years now there has been famine in the land, and for the next five years there will not be plowing and reaping. But God sent me ahead of you to preserve for you a remnant on earth and to save your lives by a great deliverance.

"So then, it was not you who sent me here, but God. He made me father to Pharaoh, lord of his entire household and ruler of all Egypt. Now hurry back to my father and say to him, 'This is what your son Joseph says: God has made me lord of all Egypt. Come down to me; don't delay. You shall live in the region of Goshen and be near me—you, your children and grandchildren, your flocks and herds, and all you have. I will provide for you there, because five years of famine are still to come. Otherwise you and your household and all who belong to you will become destitute.'

"You can see for yourselves, and so can my brother Benjamin, that it is really I who am speaking to you. Tell my father about all the honor accorded me in Egypt and about everything you have seen. And bring my father down here quickly."  Then he threw his arms around his brother Benjamin and wept, and Benjamin embraced him, weeping. And he kissed all his brothers and wept over them. Afterward his brothers talked with him.

When the news reached Pharaoh's palace that Joseph's brothers had come, Pharaoh and all his officials were pleased.  Pharaoh said to Joseph, "Tell your brothers, 'Do this: Load your animals and return to the land of Canaan, and bring your father and your families back to me. I will give you the best of the land of Egypt and you can enjoy the fat of the land.'

"You are also directed to tell them, 'Do this: Take some carts from Egypt for your children and your wives, and get your father and come. Never mind about your belongings, because the best of all Egypt will be yours." So the sons of Israel did this. Joseph gave them carts, as Pharaoh had commanded, and he also gave them provisions for their journey. To each of them he gave new clothing, but to Benjamin he gave three hundred shekels of silver and five sets of clothes. And this is what he sent to his father: ten donkeys loaded with the best things of Egypt, and ten female donkeys loaded with grain and bread and other provisions for his journey. Then he sent his brothers away, and as they were leaving he said to them, "Don't quarrel on the way!"

So they went up out of Egypt and came to their father Jacob in the land of Canaan. They told him, "Joseph is still alive! In fact, he is ruler of all Egypt." Jacob was stunned; he did not believe them. But when they told him everything Joseph had said to them, and when he saw the carts Joseph had sent to carry him back, the spirit of their father Jacob revived. And Israel said, "I'm convinced! My son Joseph is still alive. I will go and see him before I die."

Elisha and Naaman

 

Elisha and Naaman

Naaman was commander of the army of the king of Aram. He was a great man in the sight of his master and highly regarded, because through him the LORD had given victory to Aram. He was a valiant soldier, but he had leprosy. Now bands from Aram had gone out and had taken captive a young girl from Israel, and she served Naaman's wife.  She said to her mistress, "If only my master would see the prophet who is in Samaria! He would cure him of his leprosy."

Naaman went to his master and told him what the girl from Israel had said. "By all means, go," the king of Aram replied. "I will send a letter to the king of Israel." So Naaman left, taking with him ten talents of silver, six thousand shekels of gold and ten sets of clothing. The letter that he took to the king of Israel read: "With this letter I am sending my servant Naaman to you so that you may cure him of his leprosy."

As soon as the king of Israel read the letter, he tore his robes and said, "Am I God? Can I kill and bring back to life? Why does this fellow send someone to me to be cured of his leprosy? See how he is trying to pick a quarrel with me!"  When Elisha the man of God heard that the king of Israel had torn his robes, he sent him this message: "Why have you torn your robes? Have the man come to me and he will know that there is a prophet in Israel." So Naaman went with his horses and chariots and stopped at the door of Elisha's house. Elisha sent a messenger to say to him, "Go, wash yourself seven times in the Jordan, and your flesh will be restored and you will be cleansed."

But Naaman went away angry and said, "I thought that he would surely come out to me and stand and call on the name of the LORD his God, wave his hand over the spot and cure me of my leprosy. Are not Abana and Pharpar, the rivers of Damascus, better than any of the waters of Israel? Couldn't I wash in them and be cleansed?" So he turned and went off in a rage.  Naaman's servants went to him and said, "My father, if the prophet had told you to do some great thing, would you not have done it? How much more, then, when he tells you, 'Wash and be cleansed'!" So he went down and dipped himself in the Jordan seven times, as the man of God had told him, and his flesh was restored and became clean like that of a young boy.

Then Naaman and all his attendants went back to the man of God. He stood before him and said, "Now I know that there is no God in all the world except in Israel. Please accept now a gift from your servant."  The prophet answered, "As surely as the LORD lives, whom I serve, I will not accept a thing." And even though Naaman urged him, he refused. "If you will not," said Naaman, "please let me, your servant, be given as much earth as a pair of mules can carry, for your servant will never again make burnt offerings and sacrifices to any other god but the LORD. But may the LORD forgive your servant for this one thing: When my master enters the temple of Rimmon to bow down and he is leaning on my arm and I bow there also—when I bow down in the temple of Rimmon, may the LORD forgive your servant for this."

"Go in peace," Elisha said. After Naaman had traveled some distance, Gehazi, the servant of Elisha the man of God, said to himself, "My master was too easy on Naaman, this Aramean, by not accepting from him what he brought. As surely as the LORD lives, I will run after him and get something from him." So Gehazi hurried after Naaman. When Naaman saw him running toward him, he got down from the chariot to meet him. "Is everything all right?" he asked.  "Everything is all right," Gehazi answered. "My master sent me to say, 'Two young men from the company of the prophets have just come to me from the hill country of Ephraim. Please give them a talent of silver and two sets of clothing.' "

"By all means, take two talents," said Naaman. He urged Gehazi to accept them, and then tied up the two talents of silver in two bags, with two sets of clothing. He gave them to two of his servants, and they carried them ahead of Gehazi. When Gehazi came to the hill, he took the things from the servants and put them away in the house. He sent the men away and they left. Then he went in and stood before his master Elisha.

"Where have you been, Gehazi?" Elisha asked.
"Your servant didn't go anywhere," Gehazi answered.

But Elisha said to him, "Was not my spirit with you when the man got down from his chariot to meet you? Is this the time to take money, or to accept clothes, olive groves, vineyards, flocks, herds, or menservants and maidservants? Naaman's leprosy will cling to you and to your descendants forever." Then Gehazi went from Elisha's presence and he was leprous, as white as snow.

Concepts of Revenue under Different Market Conditions

 

Concepts of Revenue under Different Market Conditions

Total Revenue, Average Revenue, and Marginal Revenue behave differently in diverse situations. The principal forms of the Market situations are:

1. Perfect Competition
2. Monopoly and
3. Monopolistic Competition.

Concepts of Revenue under Perfect Competition

Perfect competition is the market situation in which there is a considerable number of buyers and sellers. The homogeneous commodity is sold at a uniform price.

All the three concepts of revenue that are total revenue, average revenue and marginal revenue under perfect competition are described hereunder:


1. Total Revenue: Under perfect competition because the price is fixed, total revenue increases at a constant rate. We note that if the price is Rs. 5, the total revenue of 2 units is Rs. 10 and of 3 units is Rs. 15. Thus, it is increasing by a constant amount of Rs. 5 for every additional unit sold.

2. Average Revenue: Average revenue or price under perfect competition does not change with the change in output sold. It is Rs. % whether the firm sells one unit or 4 units. It is because under perfect competition, price (average revenue) is determined by the industry and the firm can sell any amount at the given price.

3. Marginal Revenue: Under perfect competition, the firm has the same marginal revenue that is Rs. 5 no matter how much it sells. In fact, if Average Revenue is fixed, Marginal Revenue must also be fixed because the firm is receiving the constant price for every additional unit it is selling. Consequently, it implies that AR=MR. MR is calculated by dividing the change in total revenue by change in Quantity sold ΔTR ÷ ΔQ

For the second unit, the change in total revenue ΔTR is Rs. 10 – Rs. 5 and the change in quantity ΔQ is 2-1 = 1. Consequently, average revenue is 5 ÷ 1 = Rs. 5
Likewise, for the third unit and the fourth unit, it is Rs. 5

Objectives of Pricing

 

Objectives of Pricing

The objective of pricing should be the same as the objective of the firm's existence. If it is a profit-oriented company, the strategy used for fixing the price also profit-oriented. If it is a non-profit organization, the objective of the pricing would be non-profit oriented. At the same time, a firm can pursue more than one objective in the area of pricing. A firm should have the following objectives in its mind before fixing the price of its products.

1. Maximize profit in the short run as well as in the long run.
2. Maintain good relations with the consumers.
3. Maintain good relations with the workers.
4. Also, comply with the legal requirements imposed by the Government regarding pricing.
5. Increase sales and maintain goodwill.

To pursue all the above goals, a firm has to strike a balance between all the above objectives. The pricing should be harmonious with the objectives of the organization.

Objectives of the pricing can be classified into the following 3 categories:

1. Profit Oriented Objectives.
2. Sales Volume Oriented Objectives.
3. Other objectives.

Profit Oriented Objectives

The core objective of pricing is profit-oriented. The traditional pricing objective of a business enterprise is profit maximization. Profit-oriented objectives can be divided into the following two categories:

1. Profit Maximization.
2. To achieve Desired Return on Investment.

Profit Maximization: Profit maximization is the most general objective of business organizations. These results in a heavy margin of profit and high prices. The objective of profit maximization leads to soaring prices and consumer exploitation. If profit maximization is the objective of the firm, it will estimate the demand and costs at different prices and select the price that will generate maximum profits. This objective is beneficial for the organization. But to maximize profit in the long run, the firm sometimes has to accept short-term losses. To attract customers, a company that is entering into a potential market or introducing a new product often fix low prices.

To achieve the Desired Return on Investment: A firm may fix the price of its product at a level that helps in achieving a reasonable return on the investment. Some companies calculate the manufacturing and distribution cost and add a reasonable profit margin to it. This will ensure a fair return on the investment. The actual rate of return differs from company to company and industry to industry. The pricing strategy of achieving a target return on investment is predominantly used by manufacturers who are leaders in their industry so that they can get their pricing goals more independent of competitors.

Sales Volume Oriented Objectives.

To increase the firm's market share or sales volume, some companies use the following pricing strategy:

1. Maximization of Sales Volume.
2. Maximization of Market Share.

Maximization of Sales Volume: Some companies opt for maximizing the sales volume by resorting to price cuts or heavy discounts which may result in an actual loss to the company. Management is willing to take a short-term loss in order to increase sales volume. Once the product is positioned in the market, they gradually increase the price and make a profit. In such situations, the company will set a minimum or lowest acceptable profit level and then seek to maximize sales. They believe that increased sales are more important in the long run than immediate high profits.

Maximization of Market Share: Market share is a better indicator of corporate strength. So big organizations are interested in increasing the market share. When the total market is growing and the competitor also may be growing at a fast rate, to check the growth of the competitor, companies keep a close watch on their market share. Pricing of the product will be adjusted so that the market share can be increased, as a good market share guarantees a long-term profit for the company.

Other Objectives.

Other than the above objectives of the pricing, there are some other important considerations in setting up the price of a product. They are:

1. To Improve Company Image as a Quality Goods Supplier.
2. To Prevent Competitors Entry.
3. .To Survive.
4. To Stabilize Prices.

To Improve company image as a quality-goods supplier: For supplying high-quality goods, the company may have to incur heavy expenditure in production. As the expenditure increases the price also increases.

To prevent Competitors Entry: Sometimes it is important for a manufacturer to prevent the possible entry of a competitor than earning profit in the short run. By lowering the price of the product, companies try to discourage the competitor. No one would enter into a market where there is no attractive profit in doing the business. To divert the attention of the competitor from the profit manufacturers adjusts the price of the products. This strategy is also known as the market penetration objective. This strategy prevents a potential competitor from entering the market.

To survive: When a company faces a lack of demand for its product or overcapacity or facing fierce competition, its objective may be to survive in the business. In such circumstances, a company may set low prices so that it can stay in the business for the time being.

To stabilize prices: When a company is faced with a key competitor who acts as a price leader and where the product is a standard one, in order to minimize competition, the company will follow the leader's prices. It can avoid price wars between companies. Most of the time the companies will follow the price of the leader.

Costing and Cost Accounting.

 

Costing and Cost Accounting.

Costing or cost accounting represents a branch of accounting that deals with recording classifying and appropriate allocation of expenditure to determine the cost of product and services. After determining the cost one can fix the profit margin and also fix the selling price. In this complex and competitive market scenario, it is essential to determine the cost of products and services. It also helps the management to take an informed decision to reduce costs and increase the profit, reduce the manufacturing cost, thereby reducing the selling price. To sustain in this competitive market, producers need to reduce the selling price and increase the quality.

Definition of Costing.

According to Harold J Wheldon "Costing is the classifying, recording and appropriate allocation of expenditure for the determination of the costs of products or services; and for the presentation suitably of arranged data for purposes of control and guidance of management."

The term "Costing" and "Cost Accounting" are used interchangeably. However, Costing refers to the technique and process of ascertaining costs. There are specified rules and principles used to determine the cost of products and services. Whereas the term Cost Accounting refers to the process of finding out the cost.

According to the Institute of Cost and Management Account "Cost accounting is that part of management accounting which establishes budgets and standard costs and actual costs of operations, processes, departments or products and the analysis of variances, profitability or social use of funds."

Use of Costing

Every economic activity such as production and services involves some expenses. These expenses may be of raw materials, labor costs, or other direct and indirect expenses. The purpose of production or services is to earn a profit. Cost accounting serves the purpose of identifying the expenses and cost and the profit margin of the product. For example, a cloth factory launches a new shirt. It has to incur $30 for materials $ 20 for labor and $ 25 for other overheads. The selling price is fixed at $ 100. The cost of the shirt is $ 75 (30+20+25) Profit is $ 25 (100-75).

Every manufacturer requires such information for planning, decision making, and cost control. Most of the time it is challenging to extract such information from financial accounting. A modern system of accounting is developed to cater to the requirement of the management to control the cost. Various limitations and deficiencies of financial accounting gave rise to the need for cost accounting.

Benefits of Costing

Costing provides the following benefits:

1. Fast Decisions: Costing helps the management to take a fast and informed decision based on data provided by the Cost Accounting.
2. Optimum Profit: Costing helps the organization to maximize the profit by exercising efficient control in the personal, financial, production, and marketing activities.
3. Maximum Utilization of Limited Resources: By minimizing the wastage, one can minimize the wastage and maximize the utilization of resources.
4. Maintain Social Responsibility: Social responsibility in terms of regular supply, reasonable price, proper quality can be attained by effectively utilizing the cost accounting.
5. Effective Management: In large manufacturing plants requires special attention in every stage and process of manufacturing. Cost accounting helps the management to easily control every stage of the manufacturing process efficiently. It'll help the management to identify the inefficient department or process and address the issue and correct it.
6. Help the Organization Globally Competitive: In this ever-changing global market, stringent control over costs can help the organization to compete globally with other manufactures/markets.

Due to the numerous advantages, many companies are opting for the help of costing to control the cost. It is now a widely recognized branch of accounting and generating employment for people specialized in Cost accounting. Costing helps in checking wastage, pricing, control of resources, management of the process, the discharge of social obligations, the flow of data for decision making, and provides an opportunity for profit growth in the organization.

Items in a Cost Sheet

Some of the items that are frequently arriving in a cost sheet related to cost of direct materiel are: opening stock of raw material, add purchase of raw material, add: carriage inwards, less: closing stock, direct labor, direct expenses, prime cost (total of all the above)

Some of the items that are frequently arriving in a cost sheet related to factory overheads are: office salaries, power/fuel consumed, other consumable stores, indirect wages, repairs of machines/plant, depreciation of plant & machinery, less: amount received from the sale of scrap, factory/works cost (total of all the above + prime cost)

Some of the items that are frequently arriving in a cost sheet related to office and administrative overheads are: office rent, directors fees, office salaries, general charges, cost of production (total of all the above + factory/works cost)

Some of the items that are frequently arriving in a cost sheet related to selling and distribution overheads are: carriage outward, advertisements, sales department salaries, traveling expenses, cost of sales (total of all the above + cost of production)

Last items that are frequently arriving in a cost sheet are profit (balancing figure) and sales (actual sales value of the product)