Page 121 - DCOM202_COST_ACCOUNTING_I

Unit 6: Labour Cost

Time-keeping will serve the following objectives: Notes
(i) Ascertainment of labour cost of a job,

(ii) preparation of payrolls,
(iii) Determining productivity and control of labour cost,
(iv) Meeting for statutory requirements, and
(v) Apportionment of overhead costs.
Usually, recording of time is the responsibility of personnel department or security department
of the organisation or industry.

Methods of Time-keeping

The two methods used for recording time may be grouped into two categories:
(i) Manual Methods: This method is very simple and in this method these will be included:
(a) Attendance Register Method: Under this method, an attendance register is kept at the
entrance of the factory or organisation and the workers’ attendance in and out of
the factory gate or organisation gate is being noted. The noting down of arrival and
departure time of the workers may be done by the workers themselves or by an
employee appointed for this purpose. Thereafter, the entries are made to individual
attendance records from the attendance register.
The disadvantages of attendance register method are:
 z There will be hold-ups of workers at the time of arrival and departure,

 z It cannot reasonably act as a check on the dishonest practice of noting down
wrong time by the workers, and
 z It involves extra clerical costs for maintaining individual attendance records.
(b) Disc Method: This method is generally used in a small organization or factory
which has limited financial resources. Under this method, metal discs bearing the
numbers of the workers are placed on hooks on a board provided at the entrance
of the department or organisation. While entering into the department and factory,
as the case may be, the workers remove their respective discs and place them in a
box on empty tray provided nearby. After a short while of the scheduled time of
the department or organisation or factory, the original box or tray is removed and
a late box or tray is substituted. The late box or tray is also taken at the end of the
maximum late time allowed by the personnel department. The time-keeper records
the attendances in a register or book which is subsequently passed on to the payroll
department for the payment of workers.
(ii) Mechanical Methods: For recording the ‘In’ and ‘Out’ times of workers entering and leaving
the factory, the machines that are generally used are of the following two categories:

(a) Dial Time Recorders or Time Recording Clocks: The time recording clock is a mechanical
device which automatically records the time of the workers. This method has been
developed to obviate some of the difficulties experienced in case of manual methods
and this method is useful when the number of workers is fairly large. There is a radial
arm at the centre of the dial. When a worker enters into the factory or department, he
is to press the radial arm after placing it at the appropriate hole. The time recorder
will then automatically record the time on a roll of paper within the machine against

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