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Fundamentals of Cost Accounting (Generic Elective) [1]

Paper Code: 
25GATG301
Credits: 
04
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

This course will enable the students to develop an understanding of the cost accounting concepts and procedures.

Course Outcomes: 

Course

Learning outcome

(at course level)

Learning and teaching strategies

Assessment Strategies

Course Code

Course title

25GATG301

Fundamentals of Cost Accounting

 (Theory)

CO1: Demonstrate an understanding of the fundamentals of cost accountancy, including cost concepts and classification. 

CO2: Evaluate the material cost and labour cost and justify the use of various inventory control methods and wage rate system

CO3: Analyze the overheads for its proper apportionment, allocation and absorption 

CO4: Apply the cost management techniques

for planning and controlling performance in

order to set, monitor and control cost.

CO5: Develop a thorough understanding of the basic framework of cost audit, cost auditor and reports.

CO6:Contribute effectively in course-specific interaction

Approach

in

teaching:

Interactive

Lectures,

Discussion,

Tutorials,

Problem solving sessions, Presentations

Learning

activities

for the

students:

Self-learning

assignments, Case Study analysis, Presentations, Group discussions

  

Continuous Assessment Test, Semester End Examinations, Quiz, Solving numerical problems, Assignments, Class Presentations, Individual and group projects.

 

10.00
Unit I: 
Introduction

• Meaning and definition of cost accountancy,
• Nature and Scope of Cost Accounting,
• Cost Concepts, Distinction between Financial and Cost Accounting.
• Essentials of sound system of cost accounting
• Cost Classification
• Elements of Cost
• Cost Statements: An Introduction (basic)

14.00
Unit II: 
Material and Labour Cost

• Material Cost Management,
• Need for Efficient Purchasing,
• Storing of Materials, Methods of Inventory Control,
• Material Cost and its Components,
• Economic Order Quantity,
• Inventory Levels i.e. Reorder Level, Maximum Stock Level, Minimum Stock Level, Average Stock Level (Short examples)
Labour Cost-
• Recruitment, Recording of time and wages,
• Labour Turnover: meaning and nature,
• Methods of calculating Labour Turnover,
• Time wage,
• Piece wage- incentives wage system plans (Theory only)
• Examples on Time rate as per Halsey & Rowan Method only
• Idle Time: meaning and causes, Over time.

12.00
Unit III: 
Overhead Cost

• Classification of overhead
• Apportionment of overhead
• Apportionment of overhead of service department to production department under repeated distribution method
• Absorption of overhead (Theory only)
• Examples based on Machine hour rate.

12.00
Unit IV: 
Basic Cost Management Techniques

• Just-in-Time (JIT)
• Cost Control/ Waste Control, Cost Reduction
• Target Costing
• Pareto Analysis
• Life Cycle Costing

12.00
Unit V: 
Cost Accounting Records and Cost Audit

• Nature and Scope of Cost Audit
• Cost Accounting Records and Cost Audit under Companies Act, 2013
• Purpose, Scope and Advantages of Cost Audit
• Cost Audit Report
• Cost Auditor – Appointment, Rights and Responsibilities

Essential Readings: 

• 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)
• Cost Accounting: J. Madegowda (Himalaya Publishing House)

References: 

Suggested Readings:
• Cost Accounting: B.M Lall Nigam, I.C. Jain (PHI), New Delhi
• Cost Accounting Theory and Practice: Bhabatosh Banerjee (PHI), New Delhi
• Cost Accounting: Agarwal, Jain, Sharma, Shah and Mangal (Ramesh Book Depot), Jaipur
• Cost Accounting Principles and Practice: M.N. Arora (Vikas Publication), New Delhi

E-Content:
• https://devlibrary.in/managerial-and-cost-accounting/ [2]
• https://www.icsi.edu/media/website/CostAndManagementAccounting.pdf [3]

Reference Journal:
• The Indian Journal of Commerce
• FIIB Business Review
• Vikalpa: Journal for Decision Makers

Academic Year: 
2025-2026 [4]

Follow Accounting and Taxation on:

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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/fundamentals-cost-accounting-generic-elective

Links:
[1] https://accountingtaxation.iisuniv.ac.in/courses/subjects/fundamentals-cost-accounting-generic-elective
[2] https://devlibrary.in/managerial-and-cost-accounting/
[3] https://www.icsi.edu/media/website/CostAndManagementAccounting.pdf
[4] https://accountingtaxation.iisuniv.ac.in/academic-year/2025-2026