COST ACCOUNTING

Course Contents 

Unit 1: Introduction 

Meaning, scope, objectives and advantages of cost accounting; Difference between financial and cost accounting. Cost concepts and classifications, Overview of elements of cost and Cost sheet. Role of a cost accountant in an organisation. Introduction to Cost Accounting Standards & Cost Accounting Records and Audit Rules

Unit II: Elements of Cost: 

Material and Labour (a) Materials: Material/inventory control techniques. Accounting and control of purchases, storage and issue of materials. Inventory systems, Methods of pricing of materials issues —FIFO, LIFO, Simple Average, Weighted Average, Replacement, Standard Cost; Physical Verification, Accounting treatment and control of losses—Wastage, scrap, spoilage and defectives(b) Labour: Accounting and Control of labour cost. Time-keeping and time-booking. Concept and treatment of idle time, over time, labour turnover and fringe benefits. Methods of wage payment and Incentive schemes-Halsey, Rowan, and Taylor’s differential piece wage.

Unit III: Elements of Cost: Overheads

Classification, allocation, apportionment and absorption of overheads, Under-and over-absorption; Capacity Levels and Costs; Treatments of certain items in costing like interest on capital, packing expenses, bad debts, research and development expenses. Activity based costing.

Unit IV: Methods of Costing

Unit costing, Job costing, Contract costing, Process costing (including process losses, valuation of work-in-progress, joint and by-products). Service costing (only transport).

Unit V: Cost Accounting Book-Keeping Systems

 Integral and non-integral systems; Reconciliation of cost accounting records with financial accounts.