Contents – Cost Accounting


List of Illustrations



Part I: Cost Accounting Fundamentals

1 Cost Accounting—An Overview (General Principles)

1.1 Meaning of Cost Accounting

1.2 Objectives of Cost Accounting

1.3 Advantages of Cost Accounting

1.4 Cost Accounting and other Branches of Accounting

1.5 Concepts of Cost

1.6 Classification of Costs

1.7 Cost Objects

1.8 Methods of Costing

1.9 Techniques of Costing

1.10 Elements of Cost

1.11 Installation of a Costing System

1.12 Role of a Cost Accountant in an Organization

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Part II: Elements of Cost

2 Direct Materials

2.1 Direct Materials

2.2 Purchasing Function

2.3 Purchase Procedure

2.4 Pricing of Stores Receipts (Accounting for Direct Material Cost)

2.5 Stores Functions

2.6 Classification and Codification of Materials

2.7 Inventory Control

2.8 Fixation of Stock Levels

2.9 ABC Analysis

2.10 VED Analysis

2.11 Pareto Analysis

2.12 FNSD Analysis

2.13 Two Bin System

2.14 Continuous Stock Taking

2.15 Perpetual Inventory System

2.16 Bin Card

2.17 Stores Ledger

2.18 Periodic Stock Taking System

2.19 Control Ratio—Inventory Turnover Ratio

2.20 Issue of Materials

2.21 Pricing of Material Issues

2.22 Pricing of Material Returns

2.23 Material Losses

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3 Direct Labour and Direct Expenses

3.1 Meaning and Definition of Labour Cost

3.2 Time-Recording

3.3 Labour Time-Records

3.4 Accounting of Labour Cost

3.5 Types of Workers

3.6 Work Study

3.7 Job Evaluation and Merit Rating

3.8 Labour Remuneration

3.9 Premium Bonus Plans

3.10 Group-Bonus Plans or Schemes

3.11 Incentive Plans for Indirect Workers

3.12 Co-Partnership

3.13 Labour Turnover

3.14 Idle Time

3.15 Overtime and Shift Work

3.16 Direct Expenses

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4 Overheads Classification, Distribution and Control

4.1 Meaning and Definition of Overheads

4.2 Classification of Overheads

4.3 Methods of Segregating Semi-Variable Costs into Fixed and Variable Costs

4.4 Codification of Overheads

4.5 Distribution of Overheads

4.6 Absorption of Factory Overhead

4.7 Over Absorption or under Absorption

4.8 Treatment of Certain Specific Items of Overheads in Costing

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5 Administration Selling and Distribution Overheads

5.1 Administration Overheads

5.2 Accounting for Administration Overhead

5.3 Control of Administration Overhead

5.4 Selling and Distribution Overhead

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Part III: Costing Methods

6 Activity-based Costing (Cost Allocation) System

6.1 Meaning and Definitions

6.2 Key Terms

6.3 Salient Features of Activity-based Costing System

6.4 Implementation of Activity-based Costing System

6.5 Comparing ABC System with Traditional Costing System

6.6 Limitations of ABC System

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7 Single Costing

7.1 Unit Costing

7.2 Features of Output Costing

7.3 Analysis of Cost

7.4 Cost Sheet

7.5 Production Account

7.6 Difference between Cost Sheet and Production Account

7.7 Preparation of a Cost Sheet

7.8 Treatment of Scrap

7.9 Preparation of Production Account

7.10 For Professional Courses

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8 Job Costing and Batch Costing

8.1 Meaning and Definition of Job Costing

8.2 Features of Job Costing

8.3 Objectives of Job Costing

8.4 Procedure of Job Costing

8.5 Batch Costing

8.6 Back Flush Costing

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9 Contract Costing

9.1 Meaning and Definition of Contract Costing

9.2 Special Features of Contract Costing

9.3 Contract-Costing Procedure

9.4 Types of Contracts

9.5 Guidelines to Assess Profit on Incomplete Contracts

9.6 Work-In-Progress

9.7 Accounting Treatment

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10 Process Costing

10.1 Meaning and Definition of Process Costing

10.2 Salient Features of Process Costing

10.3 Job Costing vs. Process Costing

10.4 Process Losses and Gains

10.5 Elements of Manufacturing Cost

10.6 Equivalent Production

10.7 Joint Products and By-Products

10.8 Accounting for Joint Product Costs

10.9 Accounting for By-Products

10.10 Transfer Prices—Inter-Process Profits

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11 Operating Costing or Service Costing

11.1 Meaning of Operating Costing or Service Costing

11.2 Features of Service Costing

11.3 Users of Service Costing

11.4 Cost Unit

11.5 Cost Analysis

11.6 Transport Costing

11.7 Boiler House Costing

11.8 Hospital Costing

11.9 Staff Canteen Costing

11.10 For Professional Courses

11.11 Operation Costing

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12 Reconciliation of Cost and Financial Accounts

12.1 Need for Reconciliation

12.2 Causes of Difference

12.3 Procedure for Reconciliation of Cost and Financial Accounts

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Part IV: Cost Allocation and Accumulation

13 Integrated Accounting System

13.1 Meaning of Integrated Accounting System

13.2 Advantages of Integral System of Accounting

13.3 Disadvantages

13.4 Prerequisites for Successful Integrated System of Accounting

13.5 Accounting Treatment

13.6 The Third Entry Method

13.7 Interlocking vs. Integration of Cost and Financial Accounts

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Part V: Costing for Planning and Control

14 Budgetary Control

14.1 Meaning and Definition of Budget, Budgeting and Budgetary Control

14.2 Forecast and Budget

14.3 Objectives of Budgetary Control

14.4 Advantages of Budgetary Control

14.5 Limitations of Budgetary Control

14.6 Prerequisites for the Adoption of Budgetary Control System

14.7 Installation of Budgetary Control System

14.8 Budget Factor or Key Factor

14.9 Budget Reports

14.10 Classification of Budgets

14.11 Cash Budget

14.12 Master Budget

14.13 Classification of Budgets

14.14 Control Ratios

14.15 Responsibility Accounting

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15 Standard Costing and Variance Analysis

15.1 Meaning and Definition of Standard, Standard Cost and Standard Costing

15.2 Features of a Standard Costing System

15.3 Standard Costing and Budgetary Control

15.4 Standard Costs and Estimated Costs

15.5 Advantages of Standard Costing

15.6 Limitations of Standard Costing

15.7 Prerequisites for Installation of Standard-Costing System

15.8 Types of Standards

15.9 Kinds of Standards

15.10 Concept of Standard Hour: Variance Ratios

15.11 Analysis of Variances

15.12 Direct Material Cost Variance Analysis

15.13 Direct Labour-Cost Variance Analysis

15.14 Overhead Variances

15.15 Fixed Overhead Variance Analysis

15.16 Revision Variance

15.17 Sales Variances

15.18 Sales Variances—(Based on Turnover)—Turnover Method

15.19 Reporting of Variances to Management

15.20 Treatment of Variances in Cost Accounts

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Part VI: Costing for Decision and Control Purposes

16 Marginal Costing

16.1 Marginal Cost

16.2 Absorption Costing

16.3 Marginal Costing

16.4 Contribution of Gross Margin

16.5 Ascertainment of Income (Profit) under Marginal-Costing and Absorption-Costing Techniques

16.6 Segregation of Semi-Variable Overheads

16.7 Advantages of Marginal Costing

16.8 Disadvantages of Marginal Costing

16.9 Managerial Applications of Marginal Costing

16.10 Special Circumstances in which the Selling Price at or Below the Marginal Cost is Justified

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17 Break-Even and Cost–Volume–Profit Analysis

17.1 Features and Formulae for Profit–Volume Ratio

17.2 Cost–Volume–Profit Analysis

17.3 Objectives (Utility) of CVP Analysis

17.4 Break-Even Analysis

17.5 Concept of Some Important Terms

17.6 Profit-Path Graph

17.7 Margin of Safety

17.8 Angle of Incidence

17.9 Impact of Variable Cost, Fixed Cost and Selling Price on Contribution, P/ V Ratio, BEP and Margin of Safety

17.10 Applications of CVP Analysis

17.11 Models

17.12 For Professional Course Students

17.13 Limitations of Break-Even Analysis

17.14 Uses of CVP Analysis

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18 Differential Cost Analysis

18.1 Meaning and Definition of Differential Cost Analysis

18.2 Salient Features of Differential Cost Analysis

18.3 Marginal Costing vs. Differential Cost Analysis

18.4 Applications of Differential Cost Analysis or Utilities of Differential Cost Analysis

18.5 Opportunity Costing

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