COSTING FUNDAMENTALS

Subject Code: 3.6                                   

          Contact Hours: 50 Hrs                                                    Work load: 4 hrs per week

 

Objective:  To develop a preliminary understanding of the fundamentals aspects of concepts and practical aspects of cost accounting for Business Administration.

Module – I

Introduction, nature and scope of cost accounting, distinction between cost and financial accounting.

                                                                                                                                (4 hrs)

Module – II

Elements of cost, classification of cost, cost sheet (problems on output costing, tenders and estimate)

                                                                                                                                   (4 hrs) 

Module – III

Material meaning, importance, material control & its benefits, purchase department centralized & decentralized, functions of purchase department, stores organization, functions inventory control levels, pricing of material, Issues, problems on FIFO & LIFO methods.

                                                                                                                                   (8 hrs)

Module – IV

Overheads – collection and classification of overheads, allocation and apportionment of service department cost to production department(problems on simultaneous equation only)absorption of overhead methods –percentage of direct material cost, direct labour cost, prime cost labour hour rate, machine hour rate,(Problems on M/C hour rate only).

                                                                                                                                 (10 hrs)

Module – V

Methods of costing – job costing, contract costing, process costing, normal, Abnormal loss and abnormal gain (problems), operating costing (problems),on goods and passenger transports.

                                                                                                                                 (10 hrs)

Module – VI

Marginal costing – meaning, contribution, PV ratio, margin of safety, BEP application of marginal costing for decision – making, ( problems on profit making, make or buy, key factor).

                                                                                                                                 (10 hrs)

Module – VII

Reconciliation of cost and financial accounting, reasons for non-agreement, reconciliation statement.

                                                                                                                                   (4 hrs)

Suggested books:

 

  1. Cost Accounting: Jain & Narang, Kalyani Publication.
  2. Cost Accounting: Nigam & Sharma, Himalaya publishing house.
  3. Cost Accounting: Pattanshetti & Palekar, S Chand Publishing Co.
  4. Practical Costing: M.N.Arora, S. Chand Publishing Co.
  5. Cost Accounting: Principles and Practice, Nigam & Sharma.
  6. Cost Accounting: Theory and Practice, Banerjee.