Costing

Description

Cost accounting is a process of recording, analyzing and reporting all of a company’s costs (both variable and fixed) related to the production of a product. It helps in making better financial decisions, introduce efficiencies and budget accurately. The objective of cost accounting is to improve the business’s net profit.

Syllabus

• Introduction
  • Meaning, objectives and advantages of cost accounting
  • Difference between financial, cost, and management accounting
  • Cost concepts and classifications, Role of a cost accountant in an organization.

• Budgeting and Budgetary Control
  • Basic Concepts of Budgeting
    • Meaning of Budgeting
    • Definition of budget and budgetary control
    • Objectives of budgeting
    • Advantages of budgeting
    • Limitations of budgeting
    • Classification of budgets
  • Preparation and Review of Budgets
    • Sales budget
    • Production budget
    • Cash budget
    • Master budget
    • Budget Report
  • Approaches to budgeting
    • Fixed budgeting
    • Flexible budgeting
    • Difference between fixed and flexible budgeting
    • Appropriation budgeting
    • Zero Based Budgeting (ZBB)
    • Performance budgeting
    • Budgetary Control Ratios

• Standard Costing
  • Standard Costing
    • Meaning of Standard Cost
    • Standard and Estimated Cost
    • Difference between Standard cost and Estimated Cost
    • Concept and Objectives of Standard Costing
    • Standard Costing and Budgeting
    • Advantages & Limitations of Standard Costing
  • Variance Analysis – I
    • Meaning and Purpose
    • Classification of Variances
    • Direct Material Cost Variance
    • Direct Labour Cost Variance
  • Variance Analysis - II
    • Classification of Overhead Variance
    • Control Ratios
  • Responsibility Accounting
    • The Concept of Responsibility Accounting
    • Profit Planning and Control
    • Design of the System
    • Uses of Responsibility Accounting
    • Essentials of Success of Responsibility Accounting
    • Segment Performance
    • Measuring Segment Performance
    • Transfer Pricing
    • Methods of Transfer Pricing

• Cost Volume Profit Analysis
  • Marginal Costing
    • Segregation of Mixed Costs
    • Concept of Marginal Cost and Marginal Costing
    • Income Statement under Marginal Costing and Absorption Costing
    • Marginal Costing Equation and Contribution Margin
    • Profit-Volume Ratio
    • Managerial Uses of Marginal Costing
    • Limitations of Marginal Costing
  • Break Even Analysis
    • Break Even Analysis
    • Break Even Point
    • Impact of Changes in Sales Price, Volume, Variable Costs and Fixed Costs on Profits
    • Required Sales for Desired Profit
    • Sales Volume Required to Earn a Desired Profit Per Unit
    • Sales Required to Maintain Present Profit
    • Margin of Safety
    • Angle of Incidence
    • Break Even Charts
    • Profit Volume Graph
    • Assumption in Break Even Analysis
  • Relevant Cost for Decision-making
    • Concept of Relevant Costs
    • Concept of Differential Costs
    • Decision-Making Process
    • Selling Price Decisions
    • Exploring New Markets
    • Make or Buy Decisions
    • Sales Mix Decisions
    • Alternative Methods of Production
    • Plant Shut Down Decisions
    • Acceptance of Special Order
    • Adding or Dropping a Product Line
    • Replacement of Machinery
  • Reporting to Management
    • Concept of Management Reporting
    • Objectives of Reporting
    • Reporting Needs at Different Managerial Levels
    • Types of Reports
    • Modes of Reporting
    • Essentials of Successful Reporting (Guiding Principles)
  • Recent Developments in Accounting
    • Scope and Limitation of Conventional Financial Accounting
    • Inflation Accounting
    • Human Resources Accounting
    • Social Accounting
    • Environmental Accounting
    • International Accounting
    • Strategic Cost Management
    • Activity Based Costing
    • IT Developments in Accounting