Cost Accounting
Subject Overview
Cost Accounting is where B.Com students move from recording transactions to actually costing a product — figuring out what it costs to make something and using that to help managers decide. You'll build a cost sheet from the elements of cost, then work through material and labour cost control (stock levels, wage incentive plans, labour turnover) and the mechanics of overhead absorption using machine hour rates. The paper closes with reconciling cost and financial accounts, an introduction to process and contract costing, and a look at modern costing developments — activity-based costing, JIT, target costing, and total quality management. This is a 6-credit core paper across 4 units, and it's the direct foundation for Management Accounting and Cost & Management Accounting later in the program.
Unit-wise Syllabus
4 units — click WhatsApp below to get the full notes for each
Unit 1: Cost accounting fundamentals & the cost sheet
Meaning, objectives, nature and scope of cost accounting, comparison with financial and management accounting, cost classification, cost unit and cost centre, preparation of cost sheet, tenders and quotations
Unit 2: Material, labour & overhead costs
Purchase, storage and control of material, inventory control techniques, methods of pricing material issues, components of labour cost, idle time and overtime, wage payment and incentive plans, labour turnover, collection and absorption of overheads, machine hour rate
Unit 3: Reconciliation & methods of costing
Need for reconciling cost and financial accounts, reasons for differing profits, preparation of reconciliation statements, process costing, contract costing, marginal costing and cost-volume-profit analysis basics
Unit 4: Budgetary control & contemporary costing developments
Budgetary control concept and classification, cash and flexible budgets, zero base budgeting, activity-based costing, Just-In-Time, target costing, life cycle costing, value analysis, Kaizen costing, Total Quality Management, back-flush costing