Cost Accounting Syllabus

Name of the Program: Bachelor of Commerce (B.Com.
)
Course Code: B.Com. 4.2
Name of the Course: Cost Accounting
Course Credits No. of Hours per Total No. of Teaching Hours
Week
4 Credits 3+0+2 Hrs 56 Hrs
Pedagogy: Classrooms lecture, Case studies, Tutorial classes, Group discussion, Seminar & field
work etc.,
Course Outcomes: On successful completion of the course, the students will be able to
 Understand concepts of cost accounting & Methods of Costing.
 Outline the Procedure and documentations involved in procurement of materials &
compute the valuation of Inventory.
 Make use of payroll procedures & compute idle and over time.
Discuss the methods of allocation, apportionment & absorption of overheads.
 Prepare cost sheet & discuss cost allocation under ABC.
Syllabus
Module No 1 : INTRODUCTION TO COST ACCOUNTING (14 Hrs)
Introduction, Meaning and Definitions of Cost, Costing and Cost Accounting. Need and Objective
of Cost Accounting. Distinctions between Financial Accounting and Cost Accounting. Advantages
And Limitations of Cost Accounting. Classification of Cost – Material Cost, Labor Cost and
Overheads. Important terminologies – Cost Unit, Cost Center, Direct Cost, Indirect Cost, Prime
Cost, Production Cost, Administration Cost, Selling and Distribution Cost, Fixed Cost, Variable
Cost, Semi-variable Cost, Period Cost, Product Cost, Explicit Cost, Implicit Cost, Historical Cost,
Current Cost,Future or Predetermined Cost, Opportunity Cost. Installation of Cost Accounting
System – Features of good cost accounting system, precautions for installing effective cost
accounting system challenges in installing effective cost accounting system. Introduction,
Meaning, Objectives and Contents of Cost Sheet – Problem Preparation of Cost Sheet. Meaning of
Tender & Quotation. Bases for preparation of Tenders & Quotations – Problems on
preparation of Statement of Tender & Quotations, E-Tenders (Concept only)
Module No 2 : MATERIAL COSTING (10 Hrs)
Introduction, Meaning of Material Cost, Types of Materials - Direct Materials, Indirect Materials.
Material Cost Control - Meaning, Objectives and Benefits. Scope of Material Cost Control –
Procurement, Storage and Management of Issues. Make or Buy Decision, Purchase Process,
Vendor Selection, Economic Order Quantity. Problems on EOQ. Methods of Stores or Inventory
Control – ABC Method, VED Method and FSN Method. Determination of Stock Levels – Re-
order Level, Minimum Level, Maximum Level, Average Level and Danger Level. Duties and
Responsibilities of Stores Manager. Pricing of Material Issues – Specific Price Method, First-In-
First-Out Method (FIFO), Last-In-Last-Out Method (LIFO), Highest-In-First-Out Method
(HIFO), Simple Average Method, Weighted Average Method, Base Stock Method, Replacement
Cost Method, Realizable Price Method, Standard Price Method, Inflated Price Method. Problems
under First-In-First-Out Method (FIFO), Last-In-Last-Out Method (LIFO), Simple Average
Method and Weighted Average Method.
Module No. 3 : LABOUR COSTING (12 Hrs)
Introduction, Meaning of Labour Cost, Types of Labour – Direct Labour, Indirect Labour. Labour
Cost Control – Meaning, Objectives and Benefits. Scope of Labour Cost Control – Departments
involved, Time Analysis or Work Study, Time Keeping and Time Booking, Payroll Procedure,
Idle Time, Over Time, Labour Turnover, Wage and Incentive Systems – Simple Time Rate
System, Straight Piece Rate System, Taylor’s Differential Piece Rate System, Merrick’s
Differential Piece Rate System, Halsey System and Rowan System. Job Evaluation and Merit
Rating, Labour Productivity. Problems on calculation of Labor Cost, Overtime Wages and Wage
and Incentive Systems.
Module No. 4 : OVERHEAD COSTING (10 Hrs)
Meaning and Definition – Classification of Overheads – Procedure for Accounting and Control of
Overheads – Allocation of Overheads – Apportionment of Overheads – Primary Overhead
Distribution Summary – Secondary Overhead Distribution Summary – Repeated Distribution
Method and Simultaneous Equations Method – Absorption of Factory Overheads – Methods of
Absorption (Theory Only) – Machine Hour Rate – Problems on Machine Hour Rate
Module No. 5 : RECONCILIATION OF COST AND FINANCIAL ACCOUNTS (10 Hrs)
Introduction – meaning of reconciliation, Reasons for differences in Profits under Financial and
Cost Accounts; Procedure for Reconciliation – Ascertainment of Profits as per Financial Accounts
and Cost Accounts and Reconciliation of Profits of both sets of Accounts – Preparation of
Reconciliation Statement – Problems.
Skill Developments Activities:
 Visit any Manufacturing entity, collect the method of inventory valuation adopted &
procedure involved in procuring inventory.
 Draw the format of five documents used for material accounting 3. Prepare
dummy Payroll with imaginary figures.
 Visit any large-scale organization, identify the techniques used for controlling
administrative, Selling & distribution overheads.
 Visit any manufacturing entity and collect the cost date and prepare the cost sheet.
 Any other activities, which are relevant to the course.
Books for reference

 Charles T. Horngren, Srikant M. Datar, Madhav V.
Rajan, Cost Accounting:A Managerial Emphasis,
Pearson Education.
 Jawahar Lal, Cost Accounting., McGraw Hill Education
 Madegowda J, Cost Accounting, HPH.
 Rajiv Goel, Cost Accounting, International Book House
 Jain, S.P. and K.L. Narang. Cost Accounting: Principles and
Methods. Kalyani Publishers
 Arora, M.N. Cost Accounting – Principles and P r a c t i c e , Vikas
Publishing House, New Delhi.
 Maheshwari, S.N. and S.N. Mittal. Cost Accounting: Theory and
Problems. Shri Mahavir Book Depot, New Delhi.
 8. Iyengar, S.P. C Mariyappa B Cost Accounting, HPH
Note: Latest edition of text books may be used.

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Name of the Program: Bachelor of Commerce (B.Com.

Books for reference

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