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Cost and management accounting

Best CA Inter Costing and Management Video Lectures 


Introduction of Costing (Cost and Management)

Costing or cost accounting can be understood by defining a process of accounting total cost incurred during any service. Cost accounting may also be explained by a process of accounting in any organisation systematically recording and maintaining different expenses and cost of a product incurred in various departments.
The Chartered Institute of Management Accountant (CIMA) has defined costing as – “The techniques and processes of ascertaining cost.” Cost Accounting is a formal system of accounting for costs in the books of accounts by means of which cost of products and services are ascertained and controlled.
The terms ‘Costing’ and ‘Cost Accounting’ are often used interchangeably. But there is a little difference between the two. Costing simply means cost finding by any process or technique. Any Time Class provides Online CA Inter Costing Classes in Delhi, India. 


Costing Syllabus CA Intermediate

Level of Knowledge: Working knowledge PART – I : COST ACCOUNTING (50 MARKS)
(a) To understand the basic concepts and processes used to determine product costs,
(b) To be able to interpret cost accounting statements,
(c) To be able to analyse and evaluate information for cost ascertainment, planning, control and decision making, and
(d) To be able to solve simple cases.



1. Introduction to Cost Accounting
(a) Objectives and scope of Cost Accounting
(b) Cost centres and Cost units
(c) Cost classification for stock valuation, Profit measurement, Decision making and control
(d) Coding systems
(e) Elements of Cost
(f) Cost behaviour pattern, Separating the components of semi-variable costs
(g) Installation of a Costing system
(h) Relationship of Cost Accounting, Financial Accounting, Management Accounting and Financial Management.


2. Cost Ascertainment
(a) Material Cost
(i) Procurement procedures— Store procedures and documentation in respect of receipts and issue of stock, Stock verification (ii)Inventory control — Techniques of fixing of minimum, maximum and reorder levels, Economic Order Quantity, ABC classification; Stocktaking and perpetual inventory
(iii) Inventory accounting
(iv) Consumption — Identification with products of cost centres, Basis for consumption entries in financial accounts, Monitoring consumption.
(b) Employee Cost
(i) Attendance and payroll procedures, Overview of statutory requirements, Overtime, Idle time and Incentives

(ii) Labour turnover
(iii) Utilisation of labour, Direct and indirect labour, Charging of labour cost, Identifying labour hours with work orders or batches or capital jobs
(iv) Efficiency rating procedures
(v) Remuneration systems and incentive schemes.
(c) Direct Expenses
Sub-contracting — Control on material movements, Identification with the main product or service.
(d) Overheads
(i) Functional analysis — Factory, Administration, Selling, Distribution, Research and Development Behavioural analysis — Fixed, Variable, Semi variable and Step cost
(ii) Factory Overheads — Primary distribution and secondary distribution, Criteria for choosing suitable basis for allotment, Capacity cost adjustments, Fixed absorption rates for absorbing overheads to products or services
(iii) Administration overheads — Method of allocation to cost centres or products
(iv) Selling and distribution overheads — Analysis and absorption of the expenses in products/ customers, impact of marketing strategies, Cost effectiveness of various methods of sales promotion.


3. Cost Book-keeping
Cost Ledgers—Non-integrated accounts, Integrated accounts, Reconciliation of cost and financial accounts.


4. Costing Systems
(a) Job Costing
Job cost cards and databases, Collecting direct costs of each job, Attributing overhead costs to jobs, Applications of job costing.
(b) Batch Costing
(c) Contract Costing
Progress payments, Retention money, Escalation clause, Contract accounts, Accounting for material, Accounting for plant used in a contract, Contract profit and Balance sheet entries.
(d) Process Costing
Double entry book keeping, Process loss, Abnormal gains and losses, Equivalent units, Inter- process profit, Joint products and by products.
(e) Operating Costing System


5. Introduction to Marginal Costing
Marginal costing compared with absorption costing, Contribution, Breakeven analysis and profit volume graph.


6. Introduction to Standard Costing

Various types of standards, Setting of standards, Basic concepts of material and Labour standards and variance analysis.


7. Budget and Budgetary Control
The budget manual, preparation and monitoring procedures, budget variances, flexible budget, preparation of functional budget for operating and non operating functions, cash budget, master budget, principal budget factors.