COST ACCOUNTING

COST ACCOUNTING
AREA OF STUDY:
BBA-209

Year: 2
Semester: 3

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* Continuous
** Duration: 3 hours

Objectives:
The students are expected to know elements of cost on completion of this course.
Contents
Unit 1: Nature and Scope of Cost Accounting L. H. 3
Concept and Meaning, Scope, Objectives & Advantages of Cost Accounting, Cost accounting vs. financial accounting, Limitation of cost accounting.
Unit 2: Cost- Concepts and Classification L. H. 3
Concept of Cost, Elements of cost, classification of cost, method and techniques of costing, Preparation of cost sheet.
Unit 3: Materials Control L. H. 6
Meaning of Material, Concepts & Objectives of material control, Tehniques of Material control (Stock levels, Economic order quantity, Just-in time inventory system, ABC analysis), Methods of Pricing material issues based on actual cost (FIFO & LIFO) and its application.
Unit 4: Labour L. H. 5
1. Accounting & Control
Introduction, Types of Labour, Meaning, Causes and effects of Labour Turnover as well as its reduction, Costs of Labour and its measures.
2. Remuneration & Incentives
Introduction, Computation of Good Wage System- Time Wage System, Piece Rate System, (Straight Piece Rate System & Taylor's Differential Piece Rate System), Gant's Task and Bonus Plan, Halsey and Rowan Premium and Bonus Plan.
Unit 5: Overhead L. H. 6
Concept, Classification with regard to behaviour of expenditure, Allocation and apportionment of overhead to cost centers, Re-apportionment of service department cost to production department, ABC costing.
Unit 6: Operating Costing L. H. 5
Meaning, Classification of cost, Preparation of Cost Statement: Transport costing, Canteen costing, Nursing Home Costing and Hotel Costing.
Unit 7: Standard Costing and Variance Analysis L. H. 6
Meaning of Standard Cost and Standard Costing, Comparison between Standard and Estimated cost variance analysis (Material & Labour Variances)
1. Material Variances: Material Cost Variance (MCV), Material Price Variance (MPV), Material Usage Variance (MUV), Material Mix Variance (MMV), Material Yield Variance (MYV).
2. Labour Variances: Labour Cost Variance (LCV), Labour Rate Variance(LRV), Idle Time Variance (ITV), Labour Efficiency Variance (LEV), Labour Mix Variance (LMV), Labour Yield Variance
3. Overhead Variances- Three variances approach.
Unit 8: Contract Costing L. H. 5
Meaning & Features of Contract costing, Recording of Cost of Contract, Recording of Value and profit on contract, Preparation of Contract Account.
Unit 9: Process Costing L. H. 6
Meaning & Features of Process Costing, Application of Process Costing, Accounting treatment of process losses and wastages, Preparation of Process account Inter Process Profits.
Unit 10: Cost Reduction L. H. 3
Introduction, Advantages, Cost Control and Cost Reduction, Areas covered by Cost Reduction Programme.
Suggested Readings:
1. Horngren, Datar, Foster, Cost Accounting, A Managerial Emphasis (Eleventh edition), Pearson Education Pvt. Ltd., New Delhi.
2. Lal, Jawahar, Cost Accounting: Tata McGraw Hill Publishing New Delhi.
3. Prasad, N. K. Principles & Practice of Cost Accounting Book Syndicate Pvt. Ltd. Calcutta.
4. Jain, S. P. & Narang, K. L., Principles & Practices of Cost Accounting, Kalyani, Delhi.
5. M. E. Thukaram Rao, Cost Accounting, New Age International Pvt. Ltd., New Delhi.
6. Prasad Shiv Unakarmi, Cost and Management- Account Educational Enterprises KTM 01.
7. M. Singh Yamesh, Ojha Khagendra, Acharya Chiranjibi Cost and Management Accounting, Buddha Academic Publisher and Distributors Pvt. Ltd. Ktm, Second Edition 2004.