Cost Accounting

Cost classification
Production and nonproduction costs.
Elements of non production costs- administrative, selling,
distribution and finance.
Elements of production cost- materials, labour and overheads
Importance of the distinction between production and non
production costs when valuing output and inventories.
Classification of cost - direct and indirect, fixed and variable,
stepped fixed and semi variable costs.
Graphical presentation of types of cost behavior
Use high/low analysis to separate the fixed and variable elements
of total costs
Structure of linear functions and equations.
Concept of cost objects, cost units and cost centres.
Distinguish between cost, profit, investment and revenue
centres.
Needs for information of cost, profit, investment and revenue
centre
Accounting for material
Accounting for materials- Procedures for the ordering, receiving
and issuing of materials.
Control procedures to minimise discrepancies and losses of
material.
Material inventory account
Identify, explain and calculate the costs of ordering and holding
inventory (including buffer inventory)
Optimal reorder quantities (including discounts)
Calculations to minimize inventory costs when inventory is
gradually replenishes
Reorder levels
Valuation of closing inventory and material issues using LIFO,
FIFO and average methods

Accounting for Labour- Direct and Indirect Labour cost
journal and ledger entries to record labour cost inputs and
outputs, remuneration methods- individual plans and group
incentive schemes
Cost and causes of labour turnover, calculation of labour
efficiency, capacity and production volume ratios.

Accounting for overheads-
Treatment of direct and indirect expenses, production overhead
absorption rates
Allocation, apportionment and absorption of production
overheads.
Under and over absorption of overheads

Process costing-
Characteristics, concept, use of process costing
Normal and abnormal losses and abnormal gains
Calculate the cost per unit of process outputs, process accounts
involving normal and abnormal losses and abnormal gains
Concept of equivalent units
Prepare process accounts in different situations where work
remains incomplete.
Distinguish between by-products and joint products.
Value by-products and joint products at the point of separation
Absorption and marginal costing
Importance and concept of contribution
Calculate and reconcile profit or loss under absorption and
marginal costing
Advantages and disadvantages of absorption and marginal
costing

Cost accounting methods
Job and batch costing: Meaning, concept, characteristics and use
of job and batch costing
Alternative Cost Accounting principles
Activity based costing (ABC), target costing, life cycle costing
and total quality management (TQM)
Differentiate ABC, Target costing and life cycle costing from the
traditional costing techniques
Service/operation costing-
Use of service/operation costing is appropriate.
Carry out service cost analysis in simple service industry
situations