Cost Accounting

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 outputs, remuneration methods- individual plans and group incentive schemes Cost and causes of labour turnover, calculation of labour efficiency, capacity and production volume ratios.

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