Published on Accounting and Taxation (https://accountingtaxation.iisuniv.ac.in)

Home > Cost Accounting

Cost Accounting [1]

Paper Code: 
AAF 112
Credits: 
3
Contact Hours: 
45.00
Max. Marks: 
100.00
Objective: 

The objective of this course is to familiarize students with basic costing concepts and tools used in cost accounting

9.00
Unit I: 
Cost classification
  • 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
9.00
Unit II: 
Labour
  • 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.
9.00
Unit III: 
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
9.00
Unit IV: 
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
Unit V: 
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
References: 

ACCA study material

• Cost Accounting: Jain, Khandelwal & Pareek, (Ajmera Book Company, Jaipur)

• Cost Accounting: Agarwal, Jain, Sharma, Shah & Mangal,(Ramesh Book Depot, Jaipur ) Cost Accounting Principles and Practice: M.N. Arora, (Vikas Publication, New Delhi)

• Cost Accounting: Ravi M Kishore ( Taxmann’s-New Delhi)

• Cost Accounting: B.M Lall Nigam, I.C. Jain, PHI, New Delhi

• Cost Accounting Theory and Practice: (Bhabatosh Banerjee, PHI, New Delhi) Cost Accounting-S.N Maheshwari, (Mahavir Publication)

• Cost Accounting:Jawahar Lal, (Tata Mcgraw Hill, New Delhi)

Note- The candidate shall be permitted to use battery operated pocket calculator that should not have more than 12 digits, 6 functions and 2 memories and should be noiseless and cordless

 

Academic Year: 
2015-2016 [2]

Follow Accounting and Taxation on:

IIS (Deemed to be University)

Gurukul Marg, SFS, Mansarovar, Jaipur 302020, (Raj.) India Phone:- +91-141-2400160-61, 2397906-07, Fax: 2395494, 2781158

Source URL: https://accountingtaxation.iisuniv.ac.in/courses/subjects/cost-accounting-19

Links:
[1] https://accountingtaxation.iisuniv.ac.in/courses/subjects/cost-accounting-19
[2] https://accountingtaxation.iisuniv.ac.in/academic-year/2015-2016