Course

Unit 1

Costing – meaning – objectives – cost – costing and cost accounting – advantages and disadvantages – cost accounting and financial accounting – cost accounting and management accounting – methods of costing – cost classification – cost centre and cost unit – cost sheet- unit costing – expenses excluded from cost.

Unit 2

Materials – purchase procedure – centralized purchasing- decentralised purchasing – stock levels: minimum level – maximum level – Re-order Level, Average stock level – Danger level

– EOQ – issue of materials–pricing of material issues: LIFO – FIFO – Simple Average – Weighted Average.

Unit 3

Labour – Time keeping and time booking – methods of wage payment: Time rate and piece rate system – Taylor’s differential piece rate system – Merrick’s multiple piece rate system – incentive systems (Halsey and Rowan) – overtime – idle time.

Unit 4

Overheads – meaning and classification – allocation and apportionment of overheads – primary and secondary overhead distribution summary – Direct re-distribution -Step ladder – Reciprocal services method – Repeated distribution – Simultaneous equation – Absorption of overheads – methods of absorption – machine hour rate – concept of over and under absorption of overheads.

Unit 5

Operating Costing – Transport costing – calculation of cost per kilometre – cost per passenger kilometre and cost per tonne kilometre – Process Costing – meaning – features – advantages – disadvantages – principles- elements of production cost – process loss – normal and abnormal loss – abnormal gain.

Course Objective:

To provide the students the knowledge of cost ascertainment, cost presentation and cost control and to understand different costing methods adopted by various concerns and its utilities.

Course Outcomes:

The student will be able to:

• CO1: Understand the basic concepts of cost accounting and preparation of cost sheet
• CO2: Gain knowledge on purchase procedure and control of material and pricing of material issues
• CO3: Familiarise with the various methods of wage calculation
• CO4: Understand the procedures in allocation, apportionment, re-apportionment and absorption of overheads
• CO5: Construct operating cost sheet and process cost accounts

Text Book:

• P. Jain and K.L. Narang – Cost Accounting – Kalyani Publishers

References:

• P. Iyangar – Cost Accounting Principles – Sultan Chand and Sons
• Khanna Ahuja and Pandey – Practical Costing – Chand
• S. Raman – Cost Accounting – United Publishers.