102.Cost Accounting

ICMAB

102.Cost Accounting ---100

Course Objectives : To provide the students with an in-depth knowledge of Cost Accounting concepts, principles and methods to develop ability and skills to prepare and analyses Cost Accounting data to meet the requirements of different manufacturing concerns. On completion of this course they will be able to:

a.      discuss the role of cost accounting and quantitative analysis within the organization.

b.      apply the principles relating to the costing and control of the different resource inputs into the business.

c.      demonstrate costing methods and techniques appropriate to a variety of different business.

 

102.01 Introduction to Cost Accounting

Definition of Cost Accounting, Comparison of Cost Accounting and Financial Accounting; The role of Cost Accounting; Cost Data for Management Purposes; Methods and Techniques of Cost Accounting; Characteristics of an Ideal Cost Accounting System; Installation of a Cost Accounting System; Modern Trends in Cost Accounting.

 

102.02 Cost Concepts, Classifications and Statements

Cost Object; Expenditures, Cost, Expense and Loss; Cost Classifications; Cost Data and Uses; The Chart of Accounts; Statement of Cost of Goods Manufactured and Sold; Income Statement.

 

102.03 Costing and Control of Materials

Classification of Materials; Accounting for Materials; Pricing the Issue of Materials Valuation of Inventory; Periodic Inventory System and Perpetual Inventory System; Inventory Planning; Ordering Cost, Holding Cost and EOQ; Effect of Quantity Discounts on EOQ; Safety Stock and Reorder Point; Material Control Methods; Impact of JIT on Inventory Accounting; Materials Requirement Planning System.

 

102.04 Costing and Control of Labour

Productivity and Labour Costs; Costs included in Labour; Accounting for Labour; Time Keeping, Computation of total payroll and Allocation of Payroll costs; Journalizing Labour Costs; Special Problems Relating to Accounting for Labour; Labour cost Control, Labour Turnover and Control of Labour Turnover; Learning Curve Theory.

 

102.05 Costing and Control of Manufacturing Overhead

Manufacturing Overhead Costs; Actual Vs. Normal Costing of Manufacturing Overhead; Production Capacity, Predetermined Overhead Rates; Departmental vs. Plant-wise Overhead Rates; Separating Mixed Costs. Scatter-graph; High-low Method and Regression Analysis; Accounting for Manufacturing Overhead; Analysis and Disposition of Under-applied-and Over-applied Overhead.

 

102.06 Service Department Costs Allocation

Service department costs; Volume based costing; Need for cost allocation; Guidelines for cost allocation; Plant-wise rate vs. departmental rates; Cost allocation methods; Direct method; Step method; Reciprocal method and linear algebra method; Single and dual rate methods; Determination of costs should be allocated-budgeted or actual.

102.07 Activity-Based Costing (ABC)

The Contemporary Manufacturing Environment; Limitation of Traditional Costing Systems; ABC Defined; Identifying Activities that Use Resources; Cost Drivers and Choosing Cost Drivers; Assigning Costs Using Activity-Based Costing-Benefits of ABC; Criticism of ABC; ABC and strategic Cost Management.

 

102.08 Cost Accumulation System

Objective of Cost Accumulation; Cost Accumulation Periodic vs. Perpetual; Cost Accumulation-Actual vs. Standard; Periodic an Perpetual Cost Accounting System; The Factory Ledger.

 

102.09 Job Order Cost System

Job Order Costing; Job Order Cost System-Illustrated; Spoiled Goods; Defective Goods; Scrap materials and Waste Materials in a Job order Cost System.

 

102.10 The Nature and Characteristics of process Cost System

Process Costing Defined; Objective of Process Cost System; Characteristics of a Process Cost System; Comparison of Job Order and Process Cost Accumulation System; Production by Department; System Flow; Determination of Equivalent Units; The Cost of Production Report.

 

Tex Books

1.      Cost Accounting – Ralph S. Polimeni, Frank Fabozzi and Arthur H. Adelherg (3rd edition).

2.      Cost Accounting – F. Usry & H. Hammer (13th edition).                                    

Reference Books

1.      Cost Accounting L. Gayle Rayburn (6th edition).

2.      Cost Management – Blocher, Chen & Lin (1st edition).

3.      Cost Accounting – C. T. Horngren & Others (11th edition).

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