Accounting for manufacturing costs and products pr 531052

Manufacturing cost management of Bac Ky Investment Joint StockCompany...10CHAPTER 2 PRATICE OF ACCOUNTING FOR MANUFACTURINGCOSTS AND PRODUCT PRICING AT BAC KY INVESTMENT JOINTSTOCK COMPA

NATIONAL ECONOMICS UNIVERSITY

ADVANCED EDUCATIONAL PROGRAMS

BACHELOR THESIS

Accounting

Topic: ACCOUNTING FOR MANUFACTURING COSTS

AND PRODUCTS PRICING AT BAC KY INVESTMENT JOINT STOCK COMPANY

Nguyen Thanh Hieu

HANOI, 2020

NATIONAL ECONOMICS UNIVERSITY

ADVANCED EDUCATIONAL PROGRAMS

BARCHELOR THESIS

Topic: ACCOUNTING FOR MANUFACTURING COSTS

AND PRODUCTS PRICING AT BAC KY INVESTMENT JOINT STOCK COMPANY

Student: Nguyen Thanh HieuSpeciality: Accounting

Class: Advanced Accounting58A

Student’s ID: 11161824Supervisor: Dr Doan Thanh Nga

HANOI, 2020

in the completion of this report

I would like to give thanks to Mr Nguyen Tran Hieu – the CEO and hugethanks to Mr Ata Onat – CFO & Ms Nguyen Thi Tuyet Trinh – ChiefAccountant

Last but not least, I would like to give thanks to all staff in Bac Ky InvesmentJoint Stock Company, who help me a lot to understand more about company

I am aware that that this is a valuable opportunity not only for mygraduation but also for my career path in the future This is very first step, but it

is absolutely lucky for me to get this opportunity

I tried to have a completed internship report; however, because of shortpractice time and limited knowledge, this report may get inevitable errors I hopethat I can get the feedback to have a better version of myshelf

TABLE OF CONTENT

ACKNOWLEDGEMENTS

TABLE OF CONTENT

STATUTORY DECLARATION

LIST OF TABLES

LIST OF FIGURES

OPENING 1

CHAPTER 1 CHARACTERISTICS OF SERVICE, MANUFACTURING ORGANIZATION AND COST MANAGEMENT AT BAC KY INVESTMENT JOINT STOCK COMPANY 4

1.1 Characteristics of service of Bac Ky Investment Joint Stock Company 4

1.1.1 Trucking Service 4

1.1.2 Warehouse Service 5

1.1.3 Barging Service 6

1.1.4 Container Yard 6

1.1.5 Custom Brokerage 7

1.2 Characteristics of service providing of Bac Ky Investment Joint Stock Company 8

1.3 Manufacturing cost management of Bac Ky Investment Joint Stock Company 10

CHAPTER 2 PRATICE OF ACCOUNTING FOR MANUFACTURING COSTS AND PRODUCT PRICING AT BAC KY INVESTMENT JOINT STOCK COMPANY 12

2.1 Accounting for Transportation service costs at Bac Ky Investment Joint Stock Company 12

2.1.1 Accounting for direct material costs 12

2.1.2 Accounting for direct labor cost 21

2.1.3 Accounting for manufacturing overhead costs 30

2.2 Service pricing 37

2.2.1 Subject and method of calculating service cost 37

2.2.2 Process of calculating overall service cost: 37

CHAP 3 ASSESSMENTS AND RECOMMENDATIONS FOR IMPROVINGACCOUNTING FOR MANUFACTURING COSTS AT BAC KYINVESTMENT JOINT STOCK COMPANY 383.1 Assessments of accounting for manufacturing costs at Bac Ky InvestmentJoint Stock Company 38

3.1.1 Strengths 38 3.1.2 Weakness and causes 38

3.2 Recommendations for improving of accounting for manufacturing costs atBac Ky Investment Joint Stock Company 39

3.1.1 Complete accounting for production cost from financial accounting perspective: 39 3.1.2 Complete accounting for production cost from management accounting perspective: 40

CONCLUSION 42REFERENCES (TÀI LIỆU THAM KHẢO) 43

STATUTORY DECLARATION

I hereby declare that the presented report of internship is uniquely prepared

by me after the completion of 3 months intern at Bac Ky Investment Joint StockCompany

I also confirm that the report is only prepared for my academic requirement,not for any other purpose It might not be used with the interest of the oppositeparty of the corporation

Hanoi, 10/05/2020Signature

Nguyen Thanh Hieu

LIST OF TABLES

Table 1.1: Type of Truck service 5

Table 2.1: Accounting source - General Journal 16

Table 2.1: Accounting source – Ledger Account 621 17

Table 2.3: Accounting source – Subsidiary Ledger Account 621 19

Table 2.4: Accounting source – Main drivers for calculating salary 22

Table 2.5: Accounting source – Deduction of Salary 23

Table 2.6: Accounting source – General Jounal Account 622 26

Table 2.7: Accounting source – Ledger Account 622 27

Table 2.8: Accounting source – Subsidiary Ledger Account 622 29

Figure 2.6: Process of recording Overhead cost 32

Table 2.9: Accounting source – General Jounal Account 627 33

Table 2.10: Accounting source – Leger Account 627 34

Table 2.11: Accounting source – Subsidiary Ledger Account 627 36

LIST OF FIGURES

Figure 1.1: Barging Volume at Two River Ports Source: BMT analysis based on

interviews with Bac Ky and industrial stakeholders 6

Figure 1.2: Providing service process 8

Figure 1.3: Management structure 10

Figure 2.1: How are material used 12

Figure 2.2: Process of recording material 14

Figure 2.3: Recording Direct Material Cost 15

Figure 2.4: Process of calculating driver salary 22

Figure 2.5: Process of recording direct labor cost 25

Figure 2.6: Process of recording Overhead cost 32

The urgency of the subject

In order to effectively manage the business activities or service production

of an enterprise in particular, the national economy of a country in general needs

to use different management tools and one of the indispensable managementtools is accounting

Businesses operating in the middle of the market are regulated andfiercely competitive, when deciding to choose a production method for acertain product, they need to consider the least amount of cost toproduce,which means businesses must gather sufficient and accurateproduction costs Product cost is an important quality indicator reflecting theresults of production activities or increasing, showing the results ofmanagement of materials, labor and cash This depends on the process ofgathering production costs of the business

Along with the renewal and general development of the economy, with theopen door policy, foreign investment and to show the career of technologydevelopment - modernize enterprises, they are increasingly diversifying products,type of business, renovating management methods, constantly developing andaffirming an important role in the national economy However, nowadays, in themanufacturing enterprises, accounting of production costs and calculatingproduct prices still do not meet the management requirements and integrationprocess Therefore, the completion of accounting in general, accounting ofproduction costs and calculation of product costs is not only in order toaccurately reflect costs but also serve as a basis for providing information foroperating, cost checking and strategic planning

Therefore, the accountant gathers the production costs and calculates theproduct costs as a continuous process, having a close relationship with eachother Through this, managers will find the reason why the cost increase and lead

to price increases and thereby find a suitable solution

Through practical research, I realized that the cost accounting and productcost in the company have some points that need to be improved Therefore, Ichose the topic: "Accounting of costs and product costs at Bac Ky InvestmentJoint Stock Company" for my graduation report

1

Research purpose

The thesis contributes to clarify the theoretical issues about the accounting

of product cost and product price calculation of Bac Ky Investsment Company

Based on the research, we can see the advantages and disadvantages of theaccounting of product cost and product price calculation of Bac Ky InvestsmentCompany

Then, I can propose solutions to overcome shortcomings and makerecommendations in order to contribute to perfecting the accounting of productcost and product price calculation of Bac Ky Investsment Company

Subjects, purposes and scopes of the research of the accounting on payroll and payroll deduction.

Research subjects: Study Accounting Procedures for product cost andproduct price at Bac Ky Investment joint stock company according to accountingsystem – circulars 133/TT-BTC

Research scope: Focus on researching theoretical issues and realityaccounting procedures for product cost and product price from financialaccountant in 2019

Research methods:

To complete this report, the authors used the following research methods:

- Method of document research: collecting information from circulars, stateresolutions, existing documents circulating in the enterprise

- Observation method: In order to directly approach and observe workingoperations of employees in the enterprise so that they can understand thecost accounting process at the enterprise level

- Methods of summarizing and analyzing data: summarizing survey results,generalizing them into groups of issues

Main structure of the thesis

The thesis includes 3 chapters:

Chapter 1: Characteristics of service, manufacturing organization and cost management at Bac Ky investment joint stock company

Chapter 2: Practice of accounting for manufacturing costs and product pricing

at Bac Ky investment joint stock company

Chapter 3: Assessments and recommendations for improving accounting for manufacturing cost at Bac Ky investment joint stock company

2

The base of my thesis is not only the documents but also the accountingbooks at Bac Ky Investment Joint Stock Company in December 2019 andJanuary 2020.

Due to limited conditions and my cognitive experiences in accountingwork, it is unable to avoid mistakes

Thank you sincerely

Hanoi, May 2020

3

CHAPTER 1 CHARACTERISTICS OF SERVICE,

MANUFACTURING ORGANIZATION AND COST MANAGEMENT AT BAC KY INVESTMENT JOINT

STOCK COMPANY

1.1 Characteristics of service of Bac Ky Investment Joint Stock Company

Bac Ky Investment Joint Stock Company was established in 2005, wasformerly an investment and financial consulting company Since 2009, reflecting

to the development trend of supporting industries, the Board of Directors has

decided to invest in Logistics industry, which is considered to be the core

investment area of the company

After nearly 10 years, Bac Ky has achieved remarkable achievements: fromthe initial investment of VND 30 billion, this figure increased to 173,175 billion

by 2015 Bac Ky invested in Inland Container Depot (ICD) in Tien Son, which isthe largest and the most modern in the North of Vietnam In April 2018, Bac Kystarted to construct a river container port in Tri Phuong, Bac Ninh and put intooperation in April 2019

There are 5 business lines in Bac Ky Investment Joint Stock Company:

Table 1.1: Type of Truck service

Short-range

Trucking

Drop customer’s emptyimported containers or pick upcontainers for export purpose

in ICD Tien Son

o Bac Ky offers the bestprice incentives to reducetransports cost

o With over 150 tractorsand trailers, Bac Kyensures on time delivery

o With customers that havestable outputs, Bac Kyarranges schedulevehicles in factory toserve container rotation.Long-range trucking

Bac Ky is the firstcompany to be licensed bythe government to supplycross-border transportroutes Vietnam-China (donot transit containers atborder gate)

1.1.2 Warehouse Service

Bac Ky Investment Joint Stock Company is the direct investor and operator

of ICD Tien Son (Tien Du – Bac Ninh) with the total area of over 12 ha (thelargest in Northern Vietnam) ICD Tien Son is located at a strategic locationwhich is convenient for the storage and distribution of goods to Vietnam Northenprovinces Bac Ky currently provides the following services:

 Storage, lifting, counting, packing, labelling

 Consolidation and distribution

5

1.1.3 Barging Service

The barge frequency for two proposed routes, namely Tri Phuong – HaiPhong and Viet Tri – Hai Phong, were assessed respectively At the moment, TriPhuong just deployed the route: Tri Phuong – Hai Phong, due to the effectmarket demand & Covid-19

Figure 1.1: Barging Volume at Two River Ports

Source: BMT analysis based on interviews with Bac Ky and industrial

stakeholders Barge Capacity

Number of barges: 4

Number of round trips/barge/month (26 working days/month): 13

Barge size: 120 TEUs/trip

4 barges: 66,000 TEUs/year

Currently, cargo movements in North Vietnam predominantly rely ontrucking – due to the lack of alternative transport modes With the launch ofbarging services to link the cargo bases around Hanoi and gateway port of HaiPhong, cargo demand for barging services is expected to grow gradually BKI isone of pioneers in this type of service, which can reduce the pressure ontraditional transportation

1.1.4 Container Yard

Using ICD Tien Son depot, our clients save on average 20% ontransportation costs Instead of travelling empty half of the route between Hanoi

6

and Haiphong, importers can drop empty containers at ICD Tien Son (afterunloading at nearby factories), while exporters can pick up those emptycontainers to load cargo for export en-route back to Haiphong.

 40,000 m2 of CY

 2 container reach stackers

 11 shipping lines (including Maersk, CMA, SITC, Evergreen, Hyundai, etc.)

 Container services: LOLO; storage; cold storage; repairs; weighing

1.1.5 Custom Brokerage

With the bill of lading's final destination set to ICD Tien Son, clients caneffectively complete customs procedures (import, export or transit clearances) atdry port, instead of doing the procedures at the congested borders (seaports orborder gates)

This is a very convenient, cost-effective and time-saving solutions forclients

Bac Ky was appointed by the General Department of Vietnam Customs ascustoms supervision agent of all transport enterprise engaged in the Vietnam-China Transport Agreements

 Situated a strategic location, ICD Tien Son was chosen by the Ministry ofTransport as the transit point for all vehicles from China, Thailand to Hanoi andvice versa

Customs Sub-department of ICD Tien Son is able to execute all customsprocedures for importers and exporters Our clients can complete customsprocedure, such as import, export and transit clearances instead of doing theprocedures at seaports or the Vietnamese border

This is a very convenient cost and time-saving scenario for our clients inHanoi and is surrounding area

7

1.2 Characteristics of service providing of Bac Ky Investment Joint Stock Company

Figure 1.2: Providing service process

Functions & Duties of each departement

 Marketing & Sales:

o Be in charge of finding targeted customers and maintain active ones

o Build sales price & negotiate with customers

o Be in charge of after-sale-service (receive feedback & spread out to otherdepartments, give out some policies for loyal customers…)

 Operation Planning

o Receive specific orders, arrange suitable route & service

o Investigate & improve service

o Corporate with direct operation departments

 Direct Operation Departments: includes: Trucking, Warehousing, Barging,Container Yard, Customer Brokerage

o Receive & perform services

 Accounting

o Issue invoices & receive payment

o Keep track with account receivable & payable

o Collect invoices from other departments to record cost

o Follow cash flow & record revenue

o Prepare monthly reports & financial statements at the end of the year

1.3 Manufacturing cost management of Bac Ky Investment Joint Stock Company

Figure 1.3: Management structure

BOD: Board of Direction

CCO: Chief Customer Officer

COO: Chief Operation Officer

CFO: Chief Financial Officer

CHRO: Chief Human Resource Officer

CRM: Customer Relationship Management

Functions, duties and authorizations of BOD Functioning departments of Bac

Ky Investment Joint Stock Company:

BOD: With the help of CEO, BOD will establish, approve plans, budgets

& production norms

CEO: be in responsibility with whole company & BOD Otherwise, inBac Ky, CEO have to control some specific departments, such as: marketing,operation planning… because either it is extremely important part in the businessstructure or they are quite stable to handle

Operation Planning: This is the key of process They build up the

beginning plan and estimate the prices (with the help of Financing) for sales to

deal with customers

CCO: be in charge of dealing with customers

COO: directly control trucking & barging business lines since they areboth complex in reality

CFO: Control costs in operating process with the support of bothaccounting & financing departments Additionally, calculate for new project &control cash flow

Trucking, Barging, Warehousing: Provide actual cost related-information

CHAPTER 2 PRATICE OF ACCOUNTING FOR MANUFACTURING COSTS AND PRODUCT PRICING AT BAC KY INVESTMENT JOINT

STOCK COMPANY

2.1 Accounting for Transportation service costs at Bac Ky Investment Joint Stock Company

2.1.1 Accounting for direct material costs

2.1.1.1 Characteristics of direct material costs

 Feature of direct materials

BKI use International USA Tractors in Transportation Service that transport

container between Hai Phong – Bac Ninh – customer’s factory In average, atractor (with the combination with trailers) is able to carry about 38 tons ofgoods This kind of transportation contribute a lot to economy in general Recentresearch shows that tractors travel about 272 billion km, providing up to 68% ofthe freight volume each year

These tractors use Diesel Oil as direct material Fuel consumption of tractors in the8-s was usually about 40 liters/100km, due to low engine manufacturing technology.Nowadays, fuel consumption is significantly reduced, about 26 litters/100km

However, tractor’s fuel consumption is not always a specific and exactnumber, it depends on the usage conditions, roads, cargo weight… For example:

 Fuel consumption increases significantly when going up a slope anddecrease when going down a slope

 If cargo is empty, fuel consumption decrease about 10%,

 Maintenance regularly is also one way to help the engine achieveoptimal performance and durability

Figure 2.1: How are material used

Buy Diesel Oil

every week

Hand over

to 2 stations (in Bac Ninh & Hai Phong)

Tractors come to station for filling fuel

Bac Ky’s Shopping department usually buys Diesel oil every week forwholesale Based on the number of orders received in advance & predictingorders will receive in that week, BKI will know the amount of oil to consumeand buy close to that quantity.

Oil purchased will be handed over to 2 oil stations in Bac Ninh & HaiPhong

Tractors will be poured Diesel oil at the oil station in condition havingrequired document to confirm how much oil is taken, for about how many KMand for which order… This document is provided by a transportation accountingdepartment

2.1.1.2 Used Accounts

To record Direct Material Cost for Transportation, BKI use Account 621- TRAN

- Debit: Record of actual direct material (oil) initial value

- Credit: Forward the actual direct material cost used for Trucks in the

period in Account 154 TRAN – Unfinished Product Cost

2.1.1.3 Detailed accounting Procedure

Direct Material (Oil) Cost takes 40% of the service cost Thus, accountingthis type of cos accurately play an important role in determining the price ofservice, as well as provide important information for manager to save cost,reduce price and increase company performance

In BKI, there is a separated accounting department for Transportation withthe aim that can keep track with Transportation Revenue & Cost; collect, store &prepare all the relevant documents Because Transportation service is quitecomplicated to manage Revenue & Cost, a separated accounting department forthis business line is necessary

Then, transportation accounting department has to summarize periodicallyand send to General Accounting Department General Accounting Departmenttake the responsibility to check the the validity and legality of the documents andtables submitted by the transport accountant, then record in the General Journal,the ledger of related accounts and the detail book of the accounts

Example: Purchase oil and hand over to station:

 Because of the characteristics of business and material, oil is immediatelyhanded over to 2 station for service purpose (no warehousing)

 The process of purchasing Direct material (Oil) is below:

Figure 2.2: Process of recording material

 From the original invoice, TRAN Accountant will record the transaction

in Subsidiary Ledger – Account 621, as well as General Journal and

Ledger – Account 621.

Station send Oil Order Request to TRAN Accounting

Department every week

TRAN Accounting Department check that request and order

oil with the supplier

After confirming the price & amount, supplier ship the oil tank

to the station in Hai Phong/Bac Ninh

(BKI signed the contract with supplier for long period of time)

Station sign the Reciept Delivery to confirm that they recieve

enought amount of Oil

Invoice (02) is sent to TRAN accounting department after

delivery TRAN Accounting Departmetn will record this

transaction

After being checked, the invoice is sent to the General Accounting Department for payment in 2 weeks after the invoice date

2.1.1.4 General Accounting Procedures

Figure 2.3: Recording Direct Material Cost Note:

- Summary Report & Trial Balance are recorded at the end of period.

- The others are recorded right after each transaction.

Subsidiary Ledger –Account 621

Summary Report – Account 621

Financial Statement

Table 2.1: Accounting source - General Journal

General Jounal Adress: Company Office; December 2019

1111.0

1 3,020,000 0 31/12/201

6111.0 1

5,059,074,8

93 0 31/12/201

9

31/12/201

9

NVK034 74

Hạch toán nguyên vật liệu (dầu Do) xuất dùng cho xe nâng container ICD

6111.0

1 6,851,607 0 31/12/201

6111.0

2 754,721,492 0 31/12/201

9

31/12/201

9

NVK034 74

Hạch toán nguyên vật liệu (dầu Do) xuất dùng cho xe nâng cont tại CTP

6111.0

1 116,477,326 0 31/12/201

9

31/12/201

9

NVK034 79

Hạch toán chi phí NVL trực tiếp sang CP SXKD dở dang T12/2019 - BP CUSTOMS

621 Customs 154.03 0 3,020,000 31/12/201

Hạch toán chi phí NVL trực tiếp sang CP SXKD dở dang T12/2019 - BP SÀ LAN

621 SALAN 154.10 0 754,721,492

Hạch toán chi phí NVL trực tiếp sang CP SXKD dở dang T12/2019 - BP TRANS

621TRAN

S 154.04 0

5,059,074,8

93 31/12/201

9

31/12/201

9

NVK034 79

Hạch toán chi phí NVL trực tiếp sang CP SXKD dở dang T12/2019 - BP

-Table 2.1: Accounting source – Ledger Account 621

Công Ty Cổ Phần Đầu Tư Bắc Kỳ

Mẫu số: S03b-DN

Phòng 611, Tòa nhà Mặt Trời Sông Hồng, 23 Phan Chu Trinh, Phường Phan Chu

Trinh, Quận Hoàn Kiếm, TP Hà Nội (Ban hành theo Thông tư số 200/2014/TT-BTC

Ngày 22/12/2014 của Bộ Tài chính)

Hạch toán nguyên vật liệu (dầu Do) xuất dùng trong kỳ và tồn cuối kỳ tháng 12/2019

6111.02 754,721,492 31/12/201

Kết chuyển giá vốn hàng bán T12/2019 154.02 123,328,933

TT CP mua màng co cho BP Kho T12/2019 (HĐ 0000123) 1111.01 4,698,000

Date month year

Table 2.3: Accounting source – Subsidiary Ledger Account 621

Subsidiary Ledger Adress: Company Office; December 2019

Customs 3,020,000 3,020,000

Số dư cuối kỳ 621

31/12/2019 31/12/2019 NVK03474 Hạch toán nguyên vật liệu (dầu Do) xuất

dùng cho Sà lan T12/2019 621 SALAN 6111.02 754,721,492 0 754,721,492 0 31/12/2019 31/12/2019 NVK03479 Hạch toán chi phí NVL trực tiếp sang CP

SXKD dở dang T12/2019 - BP SÀ LAN 621 SALAN 154.10 0 754,721,492 0 0 Cộng 621 WHS 4,698,000 4,698,000

31/12/2019 31/12/2019 NVK03474 Hạch toán nguyên vật liệu (dầu Do) xuất

dùng cho xe nâng container ICD T12/2019 621CY 6111.01 6,851,607 0 6,851,607 0 31/12/2019 31/12/2019 NVK03474 Hạch toán nguyên vật liệu (dầu Do) xuất 621CY 6111.01 116,477,326 0 123,328,933 0

dùng cho xe nâng cont tại CTP T12/2019 31/12/2019 31/12/2019 NVK03479 Hạch toán chi phí NVL trực tiếp sang CP

SXKD dở dang T12/2019 - BP CY 621CY 154.02 0 123,328,933 0 0 Cộng 621CY 123,328,933 123,328,933

31/12/2019 31/12/2019 NVK03474 Hạch toán nguyên vật liệu (dầu Do) xuất

dùng cho đầu kéo T12/2019 621TRANS 6111.01

5,059,074,89

3 0 5,059,074,893 0 31/12/2019 31/12/2019 NVK03479 Hạch toán chi phí NVL trực tiếp sang CP

SXKD dở dang T12/2019 - BP TRANS 621TRANS 154.04 0 5,059,074,893 0 0 Cộng 621TRANS 5,059,074,89

3 5,059,074,893

2.1.2 Accounting for direct labor cost

2.1.2.1 Characteristics of labor cost

Direct labor cost is a cost item that accounts for a large proportion of thecost (10-15%) and is directly related to the labor’s rights as well as theobligations of the company Therefore, the correct and adequate accounting ofdirect labor costs not only contributes to the reasonable and accurate calculation

of the cost of the service but also has an important meaning in the accurate andtimely payment of wages for workers

Types of labor used

Currently, the labor force in Transportation consists of two types: long-termcontracts employees and outsourced workers

The employees include direct workers (like drivers…) and indirect workers(direct manger, order and planning staff…)

Method of calculating payroll

For direct workers (drivers), BKI applies a combination method of fixedwage and wage for each trip/truck

For indirect employees, BKI pays package wages according to the work ofeach person (there is a separate salary policy based on the rank, capacity andactual work completed by each person)

For the long-term contract employees, BKI deducted Insurance inaccordance with current regulations

For the part of employees who are outsourced, BKI does not deductdeductions from social insurance and health insurance by month but calculated inthe unit price of labor paid directly to the employees As for the trade union fee,the Company still deducted as officials and employees in the list

2.1.2.2 Used accounts (622 or 154)

To record Direct Labor Cost for Transportation, BKI use Account 622 - TRAN

- Debit: Record of actual direct labor cost: Salaries, wages and other

deductions from salaries and wages as prescribed in the period

- Credit: Forward the actual direct labor cost used for Trucks in the period

in Account 631 TRAN– Product cost

2.1.2.3 Detailed Accounting Procedure

Record Salary for 1 direct labor – 1 trucking driver

Because Trucking need many labors, there are about 130 drivers in thecompany, it requires a quite complex process to calculate the salary each month

There are 3 main departments, who are directly related to driver salaryprocess: Driver Manager, TRAN Accounting Department, Human Resource Insummary, the process is:

Figure 2.4: Process of calculating driver salary

 The table bellow represents the method of calculation for regular drivers:

Total Salary = Taxable & Non-taxable Amount

Table 2.4: Accounting source – Main drivers for calculating salary

TRAN Manager collect all drivers' schedule, which includes the

total KM, the time, orders

TRAN Accounting Department add the information about Toll fee

& Other unexpected fee, which is paid by drivers.

Driver Manager collect all information & source related, calculate

salary for each driver Then send it to Human Resources Department

Human Resource recieve the data from Driver Manager and send it

to General Accounting for payment

(Currency: VND)

Included in Income Taxable

x Actual Working Days in Month2) Allowance for Meals = 50,000/day x Actual Working Days in Month3) Wage for Laden KM = 900/km x Laden KM in Month

4) Wage for Empty KM = 600/km x Laden KM in Month

5) Allowance for Overtaget KM

8) Allowance for difficult order = 200,000 x No of Difficult Orders

9) Allowance for Trailers-cutting = 10,000 x No of Trailers-cutting in month

Not included Income Taxable