cost and management accounting

Cost and Management Accounting


  1. HD VIDEO CLASSES
  2. ABOUT 100 HOURS OF EXTENSIVE COACHING
  3. MOST COMPREHENSIVE CLASS NOTES & BOOKS
  4. DISCUSSION OF PAST EXAMINATIONS QUESTIONS
  5. ANY AMENDMENTS OR UPDATES OR ANY DISCUSSION ARE UPLOADED REGULARLY ON YOUTUBE
  6. SOLVING DOUBTS AND QUERY THROUGH NUMEROUS MODE OF COMMUNICATIONS
  7. DIRECT CALLS
  8. WHATSAPP (CALL & MESSAGE),
  9. MESSAGE THROUGH ANY SOCIAL PLATFORM,
  10. STUDENTS CAN ALSO VISIT CENTER DIRECTLY.
  11. SEPARATE HELPLINE NUMBER FOR TECHNICAL SUPPORT

The subject ‘Cost and Management Accounting’ is very important and useful for optimum utilisation of existing resources. These are branches of accounting and had been developed due to limitations of financial accounting. It is an indispensable discipline for corporate management, as the information collected and presented to management based on cost and management accounting techniques helps management to solve not only specific problems but also guides them in decision making. Keeping in view the importance of this subject, various topics on Cost and Management Accounting have been prescribed in the syllabus of CS Executive Programme with the objective of acquainting the students with the basic concepts used in cost accounting and management accounting having a bearing on managerial decision-making..

Paper 3: Cost and Management Accounting

(One paper - three hours - 100 marks)

Level of Knowledge: Working knowledge

Objectives:

  1. To develop an understanding of the basic concepts and applications to establish the cost associated with the production of products and provision of services and apply the same to determine prices.
  2. To develop an understanding of cost accounting statements.
  3. To acquire the ability to apply cost information for cost ascertainment, planning, control and decision making.

 

S. No.

Particulars

Chapter No. in book

1.

Overview of Cost and Management Accounting

 

  1. Introduction to Cost Accounting
    1. Objectives and scope of cost and management accounting
    2. The users of Cost and Management accounting information – Functions of management accounting
    3. Role of cost accounting department in an organization and its relation with other departments.
    4. Installation of Costing System
    5. Relationship of Cost Accounting, Financial Accounting, Management Accounting and Financial Management.
    6. Cost terms and concepts
    7. Cost reduction and cost control
    8. Elements of costs
    9. Cost behavior pattern, Separating the components of fixed, variable, semi-variable and step costs.
    10. Methods of Costing, Techniques of Costing
    11. Cost Accounting with use of Information Technology

 

  1. Elements of costs and preparation of Cost Sheets
    1. Functional classification and ascertainment of cost
    2. Preparation of cost sheets for manufacturing sector and for service sector

 

 

Chapter – 1

2.

Ascertainment of Cost and Cost Accounting System

  1. Material Cost
    1. Procurement procedures - store procedures and documentation in respect of receipts and issue of stock, stock verification
    2. Valuation of material receipts
    3. Inventory control-
      • Techniques of fixing level of stocks - minimum, maximum, re-order point, safety stock, determination of optimum stock level
      • Determination of Optimum Order quantity – Economic Order Quantity (EOQ)
      • Techniques of Inventory Control – ABC Analysis, Fast, Slow moving and Non- moving (FSN), High, Medium, Low *HML), Vital, Essential, Desirable (VED), Just-in-time (JIT) – Stock taking and perpetual inventory ststem, use of control ratios,
    4. Inventory accounting
    5. Consumption - identification with products of cost centres, basis for consumption entries in financial accounts, monitoring consumption.

 

Chapter – 2

 

  1. Employee Cost
    1. Attendance and payroll procedures-

- Elements of wages – Basic pay, Dearness Allowance, Overtime, Bonus, Holiday and leave wages, Allowances and perquisites

    1. Employee Cost control
    2. Employee Turnover – Methods of calculating employee turnover, causes of

      employee turnover, effects of employee tunrover

    3. Utilization of Human Resource, Direct and indirect employee Cost, charging of employee cost, identifying employee hours with work orders or batches or capital jobs
    4. Remuneration systems and incentive schemes-
    5. - Time Rate System, Piece Rate System, Differential piece rate system, Calculation of wages, Effective Wages.

Chapter – 3

 

  1. Direct Expenses
    1. Direct expenses
    2. Nature of Direct of Chargeable expenses
    3. Sub-contracting - control on material movements, identification with the main product or service.

Chapter - 4

 

  1. Overheads
    1. Functional analysis - factory, administration, selling, distribution, research and development
    2. Behavioural analysis - fixed, variable and semi variable
    3. Allocation and Apportionment of overheads using Absorption Costing Method.
    4. Factory   overheads   -   primary   and    secondary distribution
    5. Administration overheads - method of allocation to cost centres or products
    6. Selling and distribution overheads - analysis and absorption of the expenses in products/customers, impact of marketing strategies, cost effectiveness of various methods of sales promotion.
    7. Treatment of Research and development cost in cost accoutning

Chapter - 4

 

(V) Concepts of Activity Based Costing (ABC)

Chapter - 8

 

  1. Recording and Accounting of Costs
    1. Non-integrated Cost Accounting system – Ledger under non-integral system
    2. Integrated (Cost and Financial) Accounting system – Ledgers under integral system
    3. Difference between the Non-integrated and Integrated Accounting system
    4. Reconciliation of profit as per Cost and Financial Accounts (under Non- Integrated System).

Chapter – 6

Chapter – 7

3.

Method of Costing

(II)  Job Costing

Job cost cards and databases, collecting direct costs of each job, attributing overhead costs to jobs, applications of job costing.

 

Chapter – 5

 

(III) Batch Costing

Determination of optimum batch quantity, Ascertainment of cost for a batch, Preparation of batch cost sheet, Treatment of spoiled and defective work

Chapter – 5

 

  1. Contract Costing
    1. Ascertainment of cost of a contract, Progress payment, Retention money, Escalation clause, Cost plus contract, Value of work certified, Cost of work not certified.
    2. Determination of value of cost certified, Cost of work not certified, Notional or Estimated profit from a contract

Chapter – 9

 

  1. Process/Operation Costing
    1. Process cost recording, Process loss, Abnormal gains and losses, Equivalent units of production, Inter-process profit, Valuation of work in process
    2. Joint Products- Apportionment of joint costs, Methods of apportioning joint cost over joint products.
    3. By-Products – Methods of apportioning joint costs over by-products, treatment of By-product cost

Chapter – 10

 

 

Chapter – 11

 

  1. Costing of Service Sectors
    1. Determination of costs and Prices of services of following sector\industries:

- Transprt, Toll roads, Hospitals, Canteen/ Restaurants, Hotels/ Lodges,

Chapter – 12

 

 

Educational Institutions, Financial Institutions/ Banks, Insurance, IT Sector and other services.

 

  4.

Budgets and Budgetary Control

  1. Meaning of Budget, Essentials of Budget, Budget Manual, Budget setting process, Preparation of Budget and monitoring procedures.
  2. The use of budget in planning and control
  3. Flexible budget, preparation of functional budget for operating and non-operating functions, Cash budget, Master budget

Introduction to Principal/ Key budget factor, Zero Based Budgeting (ZBB), Performance budget, Control ratios and Budget variances.

Chapter - 13

5.

Cost Control and Analysis

  1. Standard Costing
    1. Setting up of standards, Type of Standards, Standard Costing as method of performance measurement.
    2. Calculation and Reconciliation of Cost variances-

-      Material cost variance, employee cost variance, Variable overheads variance and Fixed overhead variance.

Chapter - 14

6.

  1. Marginal Costing
    1. Basic concepts of marginal costing, Contribution margin, Break-even analysis, Break -even and profit volume charts, Contribution to sales ratio, Margin of Safety, Angle of incidence, Cost-Volume-Profit Analysis (CVP), Multi product break-even analysis, Consideration of Limiting factor (key factor)
    2. Determination of cost of a product/ service under marginal costing method, determination of cost of finished goods, work-in-progress,
    3. Comparison of Marginal costing with absorption costing method – Reconciliation of profit under the both methods.
    4. Short term decision making using the above concepts (basic / fundamental level).

Chapter - 15

Reviews