Module                       : ACT 206: Cost Accounting

Programme                : B.Com

Credit Value              : 12

Prerequisite                : None

General Objectives: 

·              To familiarize students with the concepts and importance of cost accounting and its applications in manufacturing concerns for cost ascertainment and price determination

Learning Outcomes:

Upon successful completion of this module, student should be able to:   

·               explain basic cost concepts and  principles

·               apply various costing method and cost ascertainment systems

·               explain basic components of cost and its determination

·               interpret various cost and control measures in an organization

CONTENT

Unit-I: Introduction                                                                                                  (6 Hours)

An overview of cost accounting – objectives, importance, different methods and types of costing, cost centre and cost unit, classification of cost, factors affecting direct/indirect cost, installation of costing system.  

Unit- II: Material Costing                                                                                          (5 Hours)

Material/inventory control –concepts and techniques, classifications and codification of materials, Accounting for control  of purchases, storage and issue of materials, Documents authorizing movement of materials, methods of pricing the issuance of materials,  -LIFO, FIFO, standard cost, simple and weighted average, treatment of material losses  

(Methods of inventory control may be given less time since it is covered in detail in Accounting Principles in the foundational course)

Unit- III: Labour costing                                                                                            (8 Hours)

Accounting and control for labour cost, time keeping and time booking, concept and treatment of idle time (normal and abnormal), labour turnover, overtime payment, fringe benefits. 

Unit- IV: Overhead costing                                                                                       (9 Hours)

Overheads – classification, codification, allocation , apportionment and absorption, causes and treatment of under and over absorption of overheads, treatment of certain items in costing such as interest on capital, bad debts, packaging expenses, research and development, etc.

Unit- V: Methods of costing                                                                                          (27 Hours)

Cost driver and revenue driver – factors affecting the two, Unit costing, job costing, process costing, and treatment of normal and abnormal losses, contract costing. 

Unit-VI: Introduction to the concept of Marginal Costing                                          (5 Hours)

Marginal costing, Absorption Costing and Marginal Costing – its distinction Income measurement under Absorption Costing and Marginal Costing; Advantages and limitations of Marginal Costing; Marginal costing Vs differential costing. 

Teaching strategies

·         Lecture method

·         Short Case study

·         Inquiry and Cooperative methods

·         Class Interactions and presentations

Assessment

·         Assignments/PW /Presentation              20 %

·         Mid-Semester Exam                              30 %

·         End-Semester Exam                                50 %

Total    100 %

Essential Texts          

1.      Arora, M.N., Cost Accounting, (10^th ed), 2008,Vikash Publishing House, Noida, UP, INDIA

2.      Hongren, CT, Cost Accounting, Managerial Emphasis, (2007)

References

1. Maher, Lanen, Rajan., Fundamentals of Cost Accounting, 2006, McGraw- Hill Companies, New York.
2. Nigam, B.M Lall and Jain, I.C,  Cost Accounting : Principles and Practice, Prentice Hall of India , NEW DELHI