Practical Example with Company Setup @ Job Costing in TallyERP9 : LAB Practice

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Let us consider Swayam Computer Zone to understand the Job Costing feature ofTally.ERP 9. Swayam Computer Zone  supplies  computers  configured  as  per  customer  requirements  and upgrades old computers. Company Setup Create a company called Swayam Computer Zone as shown below : The completed Company Creation screen appears as shown below:

Press Y or Enter to accept the company creation screen. Swayam Computer Zone  received  two  orders  from  EssBee Solutions  to  upgrade  existing systems and deliver new systems. The order details are given in the table. S.No Order Description Terms of Contract Amount 1. Servicing and Upgrading of existing machines. Lump  sum  contract,  inclusive  of replacement of parts 3,75,000 2. Installing  new  systems  as per specifications Rate contract based on requirement of systems 20,000 Other Details The company has given the servicing and upgrading job collectively to Raj and Archana. The Service Charges amounts to Rs. 62,500 and Travel Expenses for visits made onsite are Rs. 25,000 The company has given the job of installing new systems job to Rajesh Service Charge Rs. 62,500 and Travel Expenses for visits made onsite-Rs. 25,000 The company has a stores godown and regularly purchases items from Reliable Computers. Creating Jobs as Job Cost Centers in TallyERP9 Each job is identified with a name or number and this is used while creating the cost centre for the job. Create Upgading Job as a Job Cost Centre under Primary. Go to Gateway of Tally > Accounts Info. > Cost Centres > Single Cost Centre > Create 1. Name: Upgrading Job 2. (alias): Skip field 3. Under: Select Primary from List of Cost Centres 4. Use for Job Costing: Yes The completed Cost Centre Creation screen appears as shown below: Fig-3 5. Press Y or Enter to accept the screen Name Alias Under Use for Job Costing New Systems Job Skip Field Primary Yes Retail Trade Skip Field Primary No Fig-3a Fig-3b NOTES :         The Parallel allocation of cost to regular cost centres takes place when more than one cost category is enabled Creating Ledgers for Job Costing in TallyERP9 Create the following ledger, Name Under Inventoryvalues are affected Cost Centres are applicable Purchase PurchaseAccounts Yes Yes The completed ledger creation screen appears as shown below: Fig-4 Press Y or Enter to accept the screen. Similarly, create the following ledgers: Name Under Maintain balances bill-by-bill Inventoryvalues are affected Cost Centres are applicable Sales Sales Accounts — Yes Yes Service Charges Direct Expenses — No Yes Travel Expenses Indirect Expenses — No Yes NeXT  Computers Sundry Creditors Yes No No Notes : Create a Capital Account under the Capital Account group and enter Rs.10,00,000 as the Opening Balance for the Capital and alter the Cash account to a opening balance of Rs. 10,00,000. Creating Godowns dedicated to Jobs in TallyERP9 Godowns are  geographical  locations  or  persons  responsible  for  stock  handling. Whereas, Dedicated Godowns are created to keep track of stocks transferred, consumedand manufactured for each job. Note : In this lesson, godowns have been created in the names of persons respon- sible for stock handling Create a Dedicated Godown allotted to holding stocks for a default job and a normalGodown, used regularly and not assigned to any particular job. Create Stores godown Go to Gateway of Tally > Inventory Info. > Godowns > Create 1. Name: Stores 2. (alias): Skip field 3. Under: Primary 4. Allow Storage of materials: Yes 5. Set Job/Project Name for Job Costing: Not Applicable Fig-5 6. Press Enter twice to accept the screen. Similarly, create the following Godowns with the details given below: Godown Name Under Allow Storage of materials Default Job Name Raj Primary Yes Upgrading Job Archana Primary Yes Upgrading Job Rajesh Primary Yes New Systems Job Fig-5a Fig-5b Creating Units of Measure for Job Costing in TallyERP9 A Unit of Measure is created to measure the stock items. Create Units of Measure asNumbers Go to Gateway of Tally > Inventory Info. > Units of Measure > Create Ensure that the details are as shown in the following screen: Fig-6 Press Y or Enter to accept the screen Creating Stock Items for Job Costing in TallyERP9 Create stock item as Mother Board Go to Gateway of Tally > Inventory Info. > Stock Items > Create 1. Name: Mother Board 2. (alias): Skip field 3. Under: Select Primary from List of Groups 4. Units: Select Nos from Units list 5. Rate of Duty: Skip Field 6. Opening Balance: Do not enter any details The completed stock item creation screen appears as shown below : Fig-7 7. Press Y or Enter to accept the screen. Similarly, create the following Stock Items. Stock Item Under Units Hard Disk Primary Nos Monitor Primary Nos CPU Primary Nos Keyboard Primary Nos Mouse Primary Nos Creating Stock Item with Bill of Materials Go to Gateway of Tally > Inventory Info. > Stock Items > Create 1. Name: Computers 2. Press F12: Stock Item Configuration, Set Allow Component list details (Bill of Materials) to Yes The F12: Stock Item Configuration screen appears as shown below : Fig-8 Accept the screen 3. Under: Select Primary from the List of Groups 4. Units: Select Nos from the Units list 5. Set Components (BoM) to Yes 6. Rate of Duty: Skip Field 7. In the List of Components screen, Define the Unit of Manufacture as 1 Type the name of the components and godown details as given in the following table: Item Godown Qty (Nos) Monitor Rajesh 1 CPU Rajesh 1 Keyboard Rajesh 1 Mouse Rajesh 1 The Components details screen appears as shown below : Fig-9 Notes : New systems jobs are despatched from the Rajesh Godown 8. Rate of Duty: Skip Field The completed stock item creation screen appears as shown below: Fig-10 9. Press Y or Enter to accept the screen. Creating Voucher Type with Voucher Class for Job Costing in TallyERP9 In Tally.ERP 9, stock journals are used for the following purposes: To record the stages in the manufacturing process. To record the transfer of materials between godowns. To record the consumption of materials for Job Costing. Create one new Voucher Type and two Voucher Classes to deal with the scenarios in a manufac- turing as well as non-manufacturing environment. Create Manufacturing Journal Voucher Type Go to Gateway of Tally > Inventory Info. > Voucher Types > Create Enter Manufacturing Journal as Name of the Voucher Type. Select the Type of Voucher as Stock Journal from the list of voucher types. Type the Abbr. as Mfg. Select the Method of Voucher Numbering as Automatic. By default Use Common narration is set to Yes. Set Use as a Manufacturing Journal to Yes  The completed Voucher Type creation screen appears as shown below: Fig-11 7. Press Y or Enter to accept the screen Create Transfer Journal Voucher Type with Voucher Class Go to Gateway of Tally > Inventory Info. > Voucher Types > Create Enter Transfer Journal as Name of the Voucher Type. Select the Type of Voucher as Stock Journal from the list of voucher types. Type the Abbr. as Transfer. Select the Method of Voucher Numbering as Automatic. By default Use Common Narration is set to Yes. Set Use as a Manufacturing Journal to No. Type the Name of Class as Transfer Notes :             Voucher classes are available when stock journals are not used as manu- facturing journals. The options available are as follows: Use class for inter Godown transfers : Create this class to record transfer of materials from one godown to another. Use class for Job Costing consumption : Create this class to record the consumption of materials at godown level.  Press Enter and set Use Class for Inter Godown Transfers to Yes. Fig-12 The completed Voucher Type Creation screen appears as shown below: Fig-13 9. Press Y or Enter to accept the screen Create Consumption Journal Voucher Type Go to Gateway of Tally > Inventory Info. > Voucher Types > Create Enter Consumption Journal as Name of the Voucher Type. Select the Type of Voucher as Stock Journal from the list of voucher types. Type the Abbr. as Consumption. Select the Method of Voucher Numbering as Automatic. By default Use Common Narration is set to Yes. Set Use as a Manufacturing Journal to No. Type the Name of Class as Consumption Press Enter. Set Use Class for Inter-Godown Transfers to No and set Use Class for Job Costing Consumption to Yes Fig-14 The completed Voucher Type Creation screen appears as shown below : Fig-15 9. Press Y or Enter to accept the screen. Creating Receipt Note for Job Costing in TallyERP9 On  1-4-2016,  Swayam Computer Zone,  placed  an  order  with  NeXT Computers  for  the following items : Name of Item Quantity Rate per Unit Value Mother Boards 12 3,000 36,000 Hard Disk 12 4,500 54,000 Mointors 22 7,500 1,65,000 CPU 22 2,750 60,500 Keyboard 27 725 19,575 Mouse 27 250 6,750 i.          Create Receipt Note Notes :             In  the  F11:  Inventory  Features,  set  Yes  to  Use  Tracking  Numbers                         (Delivery/Receipt Notes) and Use Rejection Inward/ Outward Notes Go to Gateway of Tally > Inventory Vouchers > Alt + F9 to view Receipt Note entry screen Press F2 to change voucher date. Type 1-4-2016. In the Party’s A/c Name select NeXT Computers from the List of Ledgers Accounts. Press Enter to view the order details screen and accept the default screen. In the Purchase Ledger field, select Purchases from the List of Ledger Accounts. Select Mother Boards from List of Items. The Item Allocation screen appears. Enter the details as shown below: Tracking No Godowns Quantity Rate Amount Select 1 (from List of Track- ing Numbers) Stores 12 Nos 3,000 36,000 The completed Receipt Note appears as shown below : Fig-16 Creating Purchase Invoice for Job Costing in TallyERP9 On 2-4-2016, received a purchase bill from NeXT Computers for the supply booked. Create Purchase Invoice Go to Gateway of Tally > Accounting Vouchers > F9: Purchase Press F2 and change the date to 2-4-2016. Enter the Supplier Invoice No. and Date. In the Party’s A/c Name select NeXT Computers from the List of Ledgers Accounts. In the Receipt Details screen, select 1 from the List of Tracking Numbers. In the Purchase Ledger field select Purchases from the List of Ledgers Accounts. In the Bill-Wise Details screen, Select New Ref Type the name as RC1 Enter the amount as Rs. 341825 Fig-16-a The completed Purchase Invoice appears as shown below: Fig-17 Note :  If the Bill-wise Allocation screen does not appear then in F12: Configuration set Use Defaults Bill for Allocations to No Press Y or Enter to accept the screen View Godown Summary Go to Gateway of Tally > Display > Statements of Inventory > Godowns ‡                        Select Primary ‡                        Press Alt+F1 to view the Godown Summary of Stocks. The Godown Summary appears as shown below: Fig-18 Creating Transfer Journal for Job Costing in TallyERP9 Swayam Computer Zone has employed Raj and Archana. The following componentshave been issued to them on 4-4-2016 for the upgrading job. Details of Stock issued to Raj : Name of Item Godown Quantity Rate Value Mother Boards Stores 6 3,000 18,000 Hard Disk Stores 6 4,500 27,000 Details of Stock issued to Archana : Name of Item Godown Quantity Rate Value Mother Boards Stores 6 3,000 18,000 Hard Disk Stores 6 4,500 27,000 Create Transfer Journal Go to Gateway of Tally > Inventory Vouchers > press Alt + F7 The Voucher Type subscreen appears as shown: Fig-19 Select Transfer Journal as Voucher Type and Class as Transfer Press F2 and change the date to 4-4-2016. Select Raj as the Destination GodownEnter the details as shown below : Name of Item Godown Quantity Rate Value Mother Boards Stores 6 3,000 18,000 Hard Disk Stores 6 4,500 27,000 The completed Transfer Journal appears as shown below Fig-20 The Rate and Amount are automatically displayed. Press Y or Enter to accept the screen Similarly, make an entry in a Transfer Journal, selecting Archana as the DestinationGodown and ensure that the date is 4-4-2016  The completed Transfer Journal appears as shown below Fif-20-a Creating Consumption Journal for Job Costing in TallyERP9 On 5-4-2016, Raj and Archana found that 8 Systems needed a replacement of MotherBoards and Hard Disk. The respective consumption has to be recorded as a job cost. Name of the Item Godown Quantity Rate Value Mother Boards Raj 4 3,000 12,000 Mother Boards Archana 4 3,000 12,000 Hard Disk Raj 4 1,000 4,000 Hard Disk Archana 4 1,000 4,000 Go to Gateway of Tally > Inventory Vouchers > press Alt + F7 Select Consumption Journal as Voucher Type Select Consumption as Voucher Class Press F2 to change the voucher date. Type 5-4-2016. Ensure that the screen is displayed as shown: Fig-21 Notes : On recording the above entry, the stock available in the godowns decrease. This value is considered for the consumption of materials during a job work analysis. A Manufacturing Journal can also be used to obtain the same result, but in this, a voucherclass cannot be used and the voucher should not have any output Both direct and indirect expenses can be recorded through accounting vouchers byassigning them to job cost centres Creating Payment Voucher for Job Costing in TallyERP9 On 6-4-2016, Swayam Computer Zone made a cash payment of Rs. 31,250 as ServiceCharges and Rs.  20,000 as Travel Expenses, collectively to Raj and Archana. The costs were assigned to Upgrading Job. Create Payment Voucher Go to Gateway of Tally > Accounting Vouchers > F5: Payment Note :   In F12 : Configuration, set Use Single Entry Mode for Pymt/Rcpt/Contra to YES Select Cash in the Account field. Select Service Charges from List of Ledger Accounts. Enter 31,250 in the Amount field Press Enter to view the Cost Allocations screen Select Upgrading Job from List of Cost Centres Fig-22 6. Select Travel Expenses from List of Ledger Accounts, enter 20000 in the Amount field and press Enter to view the Cost Allocations screen. 7. Select Upgrading Job from List of Cost Centres. 8. Press Y or Enter to accept the screen. Fig-22-a View Godown Summary Go to Gateway of Tally > Display > Statement of Inventory > Godowns > Select Primary Press Alt+F1 to view the Godown summary in detailed format. In the F12: Configuration, set Show All Items (incl. zero balance) to Yes Fig-22-b Fig-23