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Cost Accounting (1)

The Cost Accounting course (COP102-1) consists of 60 hours and offers 4 credits, focusing on the computation of cost components such as material, labor, and overheads. Students will learn various costing methods including job, contract, and process costing, as well as inventory control techniques. Upon completion, students will be able to apply cost accounting principles and reconcile cost and financial accounts.

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Vriddhi Parekh
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28 views

Cost Accounting (1)

The Cost Accounting course (COP102-1) consists of 60 hours and offers 4 credits, focusing on the computation of cost components such as material, labor, and overheads. Students will learn various costing methods including job, contract, and process costing, as well as inventory control techniques. Upon completion, students will be able to apply cost accounting principles and reconcile cost and financial accounts.

Uploaded by

Vriddhi Parekh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Course Name: Cost Accounting Course Code: COP102-1

Total number of hours: 60 Hours Credits: 4

Course description:

The course aims to provide conceptual understanding of cost accounting. It focuses on the
computation of various components of cost, such as material, labour, and overheads. It also
covers modules on specific cost accounting methods like job costing and contract costing, and
process costing methods of costing and its reconciliation.

Course outcomes: On completing the course students will be able to:

1. Discuss the basic concepts and classification of cost and various methods of
inventory control prepare stock ledger
2. Apply various methods for Inventory Calculation-ABC analysis, FIFO, LIFO,
weighted average methods and create understanding on material costing
3. Develop a comprehensive understanding on labor costing methods, overtime, idle
time applications
and labor remuneration.
4. Apply different methods of overhead allocation and apportionment to calculate
overhead rate.
5. Ascertain understanding of how various methods to costing can be applied-job,
contract, process costing and demonstrate reconciliation of Cost and Financial
accounts.

CO/PO PO1 PO2 PO3 PO4 PO5 PO6 PO7

CO1 2 2

CO2 2 2

CO3 2 2

CO4 2 2

CO5 2

Unit 1: Introduction to Accounting Hours:


10
Introduction – Definition – Fundamental Principles –Scope, Functions and objectives –
Merits & Demerits –Methods & Techniques-Cost Accounting and financial accounting
comparison; Elements of Cost – Cost vs. Expense- Cost Centre, Cost Unit & Cost object-
Classification of Cost- Costs for decision making - Installation of Costing system - Cost Sheet
- Tenders and Quotations (Problems).

Unit 2: Materials Hours:


8

Meaning and classification of material- Purchase Procedure& documentation - Store Keeping


Functions; Inventory Control - Fixation of Levels- Periodical and Perpetual Inventory, ABC
Analysis, EOQ (Problems); Stores issue - Methods of Pricing of materials – FIFO – LIFO -
Simple and Weighted Average Methods. (Problems).

Unit 3: Labour Hours:8

Meaning & classification of Labour- Attendance and payroll procedure- Time Keeping -
Methods of Time Keeping - Time Booking – Records - Idle Time - Causes for Idle Time -
Treatment of Idle Time – Overtime – Labour Turnover—Labour Remuneration - Features of
Good Wage System –Remuneration system and incentive schemes-Time Wage System, Piece
Rate System, Problems on Taylor’s Differential Piece Rate System, Halsey Premium Plan and
Rowan Plan. (Problems).

Unit 4: Overheads
Hours:10

Meaning and definition –Classification of Overheads- Allocation & Apportionment of


overheads (Primary Distribution) Apportionment of Service Department Costs to Production
Departments (Secondary Distribution- Reciprocal basis). Absorption of Overheads - Methods
- percentage of Direct Material Cost - Direct Labour Cost - Prime Cost - Direct Labour Hour
Rate and Machine Hour Rate.

Unit 5: Methods of Costing Hours:


16

Job and Contract Costing: Meaning and nature- Difference between Job Costing and Contract
Costing – Preparation of Contract Accounts- Ascertainment of Profit/Loss on Contract –
Work In Progress and Balance Sheet –Profits on incomplete contracts-Cost Plus and
Estimated Contracts (Problems).

Process Costing: Meaning and nature- Preparation of process Accounts- Normal Loss -
Abnormal Loss/gain - (Including Inter-Process Profit and Equivalent Production) Preparation
of Process Accounts and Joint and By-Products

Unit 6: Reconciliation of Cost and Financial Accounts Hours:8

Need for reconciliation- Reasons for difference in profits- Reconciliation- Re-modelling of


financial books, Reconciliation for difference in profits, Method of reconciliation (Problems)
Essential references:
1. Horngren T. Charles, Datar M. Srikant and Rajan V. Madhav. (2017) Cost Accounting:
A Managerial Emphasis, 16th Edition, Prentice Hall publishers, Delhi
2. Arora M N – (2012) A Text book of Cost & Management Accounting, Vikas
Publishing, New Delhi-12th edition.
3. Lal Jawahar, Srivastava Seema. (2019) Cost Accounting, 5thEdition, Tata Mcgraw-Hill,
Delhi

Recommended references:
1. Saxena V. K. (2014) Essentials of Cost Accounting, Sultan Chand and Sons, New Delhi
2. Sharma &Shashi. K Gupta (2012) Cost & Management Accounting Kalyani Publishers
3. Kishore. M. Ravi. (2021) Business Strategy and Strategic Cost Management, 1st
Edition, Taxmann Publications, New Delhi

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