Question

(answer this question like an essay)

(oil and gas accounting)

describe the development activities & production activities, state the differences between them and provide an example of journal entries of each one .

Answer 1

Aevelopment activities

Introduction

Teams and organizations that support and implement developmental activities often see positive growth in motivation, morale, and performance. Providing employees with meaningful developmental activities can increase skills, encourage collaboration, expand knowledge, and nurture a desire for additional learning. The best developmental activities balance the employee’s needs and interests with the organization’s goals and objectives - a win-win situation for both. In short, developmental activities are a means to creating an engaged and valued workforce.

The United States Department of State, Bureau of Human Resources, has outlined ten basic types of developmental activities. Team leaders may skillfully implement these types of developmental activities to strengthen the capacity and depth of their teams.

Ten Types of Developmental Activities

1. Cross Training. Cross training is training someone in another activity that is related to his/her current work. This is a good way to learn new skills, combat boredom, and increase an individual’s value and flexibility.

2. Formal Training. Formal training is a classroom type of learning that can be done “in-house” or externally (training centers, colleges, private vendors, etc.)

3. Matrix Teams. This is the formation of work groups, cross functional teams, problem solving teams, task forces, committees, and special project groups. The goal is to share information, knowledge, collaboration, and expertise.

4. Mentoring. Mentoring falls into two basic categories: formal and informal.

A. Formal mentoring is based on an explicit agreement with specific goals and a structured process to achieve those goals.

B. Informal mentoring has a looser structure where a more experience employee takes another “under his or her wing.” The mentor provides the protégé with advice, insight, and support.

5. On-the-Job Training. Here the employee is working as he/she learns a job. We only get about 25% of what we use in our jobs through formal learning. The other 75% of learning happens as we creatively adopt and adapt to ever changing circumstances. It happens when we ask a coworker a question and get an answer or when we collaborate with members of our team on a project.

6. Position Enhancement. This kind of learning involves modifying an employee’s responsibilities to meet a personal development objective. Job responsibilities are stretched in some way. This can either be vertical or horizontal.

Job Enlargement is the horizontal expansion of a job. It involves the addition of tasks at the same level of skill and responsibility.

Job Enrichment is the addition to a job of tasks that increase the amount of employee control or responsibility. It is a vertical expansion of the job.

7. Self-Directed Learning Projects. An employee is assigned or voluntarily undertakes a specific project that promotes the expansion of skills and knowledge through self-directed learning or research and produces a final product that contributes to organizational objectives.

8. Special Assignments. A Special Assignment is a learning strategy in which the employee performs temporary duties on a full or part-time basis. These duties may be performed within or outside the current organization.

9. Special Developmental Assignments. When working on a developmental assignment, employees are still assigned to their regular positions, but for a period of time they will work on a particular assignment often with a different team leader. During the assignment they will perform tasks assigned, based on the identified career goals and interests and/ or the position they are filling. It can be a great learning experience and can assist employees in their career goals and help them determine if a particular job would be right for them. It broadens their knowledge of other functions and departments and offers them different and challenging job experiences.

10. Self Developmental Learning. Team members are directed self-learning materials that they can use on their own time to enhance their skills and knowledge. This may include books, DVDs, Internet courses, workbooks, etc.

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Meaning of Production:

Since the primary purpose of economic activity is to produce utility for individuals, we count as production during a time period all activity which either creates utility during the period or which increases ability of the society to create utility in the future.

Business firms are important components (units) of the economic system.

They are artificial entities created by individuals for the purpose of organising and facilitating production. The essential characteristics of the business firm is that it purchases factors of production such as land, labour, capital, intermediate goods, and raw material from households and other business firms and transforms those resources into different goods or services which it sells to its customers, other business firms and various units of the government as also to foreign countries.

Three Types of Production:

For general purposes, it is necessary to classify production into three main groups:

1. Primary Production:

Primary production is carried out by ‘extractive’ industries like agriculture, forestry, fishing, mining and oil extraction. These industries are engaged in such activities as extracting the gifts of Nature from the earth’s surface, from beneath the earth’s surface and from the oceans.

2. Secondary Production:

This includes production in manufacturing industry, viz., turning out semi-finished and finished goods from raw materials and intermediate goods— conversion of flour into bread or iron ore into finished steel. They are generally described as manufacturing and construction industries, such as the manufacture of cars, furnishing, clothing and chemicals, as also engineering and building.

3. Tertiary Production:

Industries in the tertiary sector produce all those services which enable the finished goods to be put in the hands of consumers. In fact, these services are supplied to the firms in all types of industry and directly to consumers. Examples cover distributive traders, banking, insurance, transport and communications. Government services, such as law, administration, education, health and defence, are also included.

Factors of Production:

Production of a commodity or service requires the use of certain resources or factors of production. Since most of the resources necessary to carry on production are scarce relative to demand for them they are called economic resources.

In fact, the resources of any community, referred to as its factors of production, can be classified in a number of ways, but it is common to group them according to certain characteristics which they possess. If we keep in mind that the production of goods and services is the result of people working with natural resources and with equipment such as tools, machinery and buildings, a generally acceptable classification can readily be derived. The traditional division of factors of pro­duction distinguishes labour, land and capital, with a fourth factor, enterprise, some-times separated from the rest.

The people involved in production use their skills and efforts to make things and do things that are wanted. This human effort is known as labour. In other words, labour represents all human resources. The natural resources people use are called land. And the equipment they use is called capital, which refers to all man-made resources.

The first three factors—land; labour and capital do not work independently or in isolation. There is need to combine these factors and co-ordinate their activities. This two-fold function is performed by the organiser or the entrepreneur.

But this is not the only function of the entrepreneur. In fact, production can never take place without some risk being involved; the decision to produce something has to be taken in anticipation of demand and there must be some element of uncertainty about that demand materialising.

Characteristics:

Land has certain important characteristics:

1. Fixed supply:

The total land area of earth (in the sense of the surface area available to men) is fixed. Therefore, the supply of lands is strictly limited. It is, no doubt, possible to increase the supply of land in a particular region to some extent through reclamation of land from sea areas or deforestation. But this is often offset by various kinds of soil erosion. The end result is that changes in the total area are really insignificant. Of course, the effective supply of agricultural (farm) land can be increased by drainage, irrigation and use of fertilisers.

In consequence, the prices of land and natural resources tend to be extremely sensitive to changes in consumer demand, rising sharply if they become more desirable. In this context, we may refer to the sharp increase in the price of building land in Bombay in the last five decades. However, new discoveries are often stimulated by high prices (as in the case of Calcutta’s Salt Lake area), and like that of oil in the U.K.’s North Sea, which tend to moderate price increases.

2. Alternative uses:

Although the total supply of land is fixed, land has alternative uses. The same plot of land can be used to set up factories or to grow wheat or sugarcane or even to build a stadium. This means that the supply of land to a particular use is fairly (if not completely) elastic. For example, the amount of land used for growing tomato can be increased by growing less of some other crop (e.g., cauliflower). The supply of building land can be increased by reducing the area under agricultural operation.

3. No cost of production:

Since land is a gift of nature, it has no cost of production. Since land is already in existence, no costs are to be incurred in creating it. In this sense, land differs from both labour (which has to be reared, educated and trained) and capital (which has to be created by using labour and other scarce resources or by spending money).

So, it logically follows that the entire return from land—called rent—is a surplus income (at least from society’s point of view). As Stanlake has rightly put it, “any increase in the value of natural resources due to rising populations and rising incomes accrues to the owners of these resources as a windfall gain—it does not arise from any efforts on their part”.

However, the above argument is not valid today. In fact, much of the services of land required expenditure of resources to obtain or maintain them and hence they are often called capital (i.e. produced means of production). So is land, as a factor of production, ‘really distinct’ from capital.

4. Differences in fertility:

Another important feature of land is that it is not homogeneous. All grades (plots) of land are not equally productive or fertile. Some grades of land are more productive than others. And Ricardo argued that rent arises not only due to scarcity of land as a factor but also due to differences in the fertility of the soil.

the differences between Manufacturing and Production

Manufacturing and Production, are the two terms related to conversion of raw materials into finished products. But, Have you ever wondered, what makes them different. Manufacturing is the process of transforming raw materials into ready goods, with the help of machinery. On the other hand, production alludes to the processes or methods, that converts inputs like raw material or semi finished goods, to make finished product or services, which may or may not use machinery.

Manufacturing is a process that involves making something that uses raw material as input, whereas Production may or may not include raw material as input. We can also say that manufacturing is production, but production is not merely manufacturing. Take a read of this handout and clear all your doubts, with respect to the difference between manufacturing and production.

Meaning	The process of producing merchandise by using resources like labor, machines, tools, raw materials, chemicals and others is known as a Manufacturing.	Production is a process of making something used for consumption by combining various resources.
Concept	A process in which raw material is used to generate output.	A process of converting inputs into outputs.
Compulsory resources	Men and Machine	Men
Form of input	Tangible	Tangible and Intangible
Form of Output	Goods only	Goods and Services
Creation of	Goods that are suitable for use	Utility