03 CA New

Chapter Heads
Cost Accounting : Systems, Objectives and Essentials
Cost Concepts : Terminology and Classification
Cost Concepts : Behaviour and Segregation
Direct Material : Procurement Procedures and Accounting of Issues
Direct Material : Stock Control Techniques
Direct Labour : Remuneration Systems
Direct Labour : Turnover and Accounting
Overheads : Allocation and Apportionment
Overheads : Absorption and Recovery
10
Overheads : Treatment of Special Items
11
Activity Based Costing : Systems and Procedures
12
Costing Methods : Output Costing, Job Costing and Batch Costing
13
Contract Costing : Running Contracts and Contracts Nearing Completion
14
Operating Costing : Application in Service Sector
21
44
71
111
150
197
233
278
C-9
310
333
464
383
422
15
Process Costing : Ascertainment of Cost and Profitability
16
Process Costing : Equivalent Units
17
Joint Products and By-products : Ascertainment of Cost and Profitability;

Decisions on Further Processing 548
18
Reconciliation of Profit : Cost Accounts and Financial Accounts
19
Cost Book-keeping : Non-Integrated and Integrated Cost Systems
20
Break-even and Cost-Volume-Profit Analysis : In Multi Product and Uncertainty Situations
21
Marginal Costing Technique : Applications in Decision Making
22
Budgeting : Preparation of Budgets and Control of Variances
23
Standard Costing : Terminology, Variance Analysis and Investigation
24
Uniform Costing and Interfirm Comparisons
25
Cost Audit and Management Audit
26
Latest Developments in Cost Accounting
497
523
973
C-10
985
960
575
599
699
788
856
638
Contents
Chapter 1
COST ACCOUNTING : SYSTEMS, OBJECTIVES AND ESSENTIALS

Meaning and Terminology
Cost, Costing, Cost Accounting, Cost Accountancy, Cost Unit, Cost Object.
Comparison with Financial Accounting
Cost Accounting System
Objectives of Cost Accounting, Necessity for Cost Accounting System, Reports provided by Cost Accounting Department, Essentials
of Good Cost Accounting System, Essential Factors for Good Cost Accounting System, Important Features of a Performance
Measurement Costing, Practical Difficulties in Installation, Suggestions to Overcome Practical Difficulties, Limitations of Cost
Accounting.
13
Methods of Costing
SPECIFIC ORDER COSTING - Job Costing, Contract Costing, Batch Costing; CONTINUOUS OPERATION COSTING - Process Costing,
Operation Costing, Unit Costing, Service Costing.
Types of Costing Systems
14
Historical Costing, Absorption Costing, Direct Costing, Marginal Costing, Standard Costing, Uniform Costing.
Key Terms
15
Theoretical Questions
16
True or False Statements
17
Choose Correct Answer 18

.......................................................................................................................................................
Chapter 2
COST CONCEPTS : TERMINOLOGY AND CLASSIFICATION

Cost Management
22
Need for Cost Management, Composite Cost Unit, Standing Order Number vs. Cost Account Number, Strategic Cost Management.
Classification of Costs
24
CLASSIFICATION OF COSTS BY NATURE - Material Cost, Labour Cost, Expenses; COST CLASSIFICATION IN RELATION TO COST CENTRE Direct Costs, Indirect Costs; COST CLASSIFICATION BY TIME - Historical Cost, Predetermined Cost, Standard Cost, Estimated Cost;
COST CLASSIFICATION FOR DECISION MAKING - Marginal Cost, Differential Cost, Opportunity Cost, Relevant Cost, Sunk Cost,
Replacement Cost, Normal Cost, Abnormal Cost, Avoidable Cost, Unavoidable Cost, Pre-production Cost, Product Cost, Period Cost,
Traceable Cost, Common Cost, Controllable Cost, Uncontrollable Cost, Short-run Cost, Long-run Cost, Past Cost, Future Cost,
Explicit Cost, Implicit Cost, Book Cost, Shutdown Cost, Abandonment Cost, Urgent Cost, Postponable Cost, Conversion Cost; COST
CLASSIFICATION BY NATURE OF PRODUCTION PROCESS - Batch Cost, Process Cost, Operation Cost, Operating Cost, Contract Cost,
Joint Cost.
Cost Codification
32
Definition and Meaning, Objectives of Codification, Requirements of Efficient Coding System, Methods of Codification of
Costs.
Key Terms
35
37
38

Examination Problems 41
.......................................................................................................................................................
C-11
C-12
Cost Accounting
Chapter 3
COST CONCEPTS : BEHAVIOUR AND SEGREGATION

Behaviourwise Cost Classification
45
Classification of Costs based on Variability - Variable Cost, Fixed Cost, Semi-variable or Semi-fixed Cost, Specific and
Common Fixed Cost, Committed Fixed Cost, Discretionary Fixed Cost, Engineered Cost, Managed Cost, Capacity Cost,
Programmed Cost; Diagrammatic Presentation of Cost Behaviour, Importance of Behaviourwise Cost Classification.
49
Segregation of Semi-variable Costs
Industrial Engineering Method, Account Inspection Method, Scatter Graph Method, High and Low Method, Regression
Analysis, Multiple Regression Analysis, Assumptions in Regression Analysis, Precautions in Using Regression Analysis.
Coefficient of Correlation and Coefficient of Determination
57
Coefficient of Correlation, Coefficient of Determination.

Key Terms
61
62
63

.......................................................................................................................................................
Chapter 4
DIRECT MATERIAL : PROCUREMENT PROCEDURES AND ACCOUNTING OF ISSUES

Purchase and Stores Routine
72
Definition and Meaning of Raw Materials, Bill of Materials, Purchase Requisition, Purchase Order, Material Inspection Note, Goods
Received Note, Stores Requisition Note, Material Transfer Note, Material Return Note, Bin Card, Stores Ledger.
Pricing of Material Issues
79
Components in Direct Material Cost; Methods of Pricing Material Issues - Actual Cost Method, First In First Out Method, Last In First
Out Method, Highest In First Out Method, Simple Average Cost Method, Weighted Average Cost Method, Periodic Average Cost
Method, Standard Cost Method, Replacement Cost Method, Next In First Out Method, Base Stock Method; Factors Effecting
Selection of Pricing Method; Suitability of Pricing Method in Rising Prices.
Material Shortages
86
Reasons for Stock Discrepancies, Steps to Avoid Stock Discrepancies, Accounting Procedure for Material Shortages.
Inventory Systems
90
Material Control System, Perpetual Inventory System, Continuous Stock Taking System, Periodic Stock Taking System,
Two Bin System.
Key Terms
93
94
95

.......................................................................................................................................................
Chapter 5
DIRECT MATERIAL : STOCK CONTROL TECHNIQUES

Importance of Inventory Control
112
Definition and Meaning of Inventory, Features of Ideal Inventory Policy, Requirements of Stock Control, Impact of Inflation on
Inventory Holding.
Inventory Control Ratios
114
Input-Output Ratio, Stock Turnover Ratio.
Contents
Inventory Control Techniques
C-13
116
Economic Order Quantity, Pull System in Inventory Control, Fixation of Inventory Levels, VED Analysis, FNSD Analysis,
ABC Analysis, Just In Time Inventory Management.
Key Terms
126
127
128

.......................................................................................................................................................
Chapter 6
DIRECT LABOUR : REMUNERATION SYSTEMS

Items of Labour Cost
151
Direct Labour Cost, Indirect Labour Cost, Items of Labour Cost.

Studies at Work Place and Job Appraisal
151
Time and Motion Study, Method Study, Work Study, Activity Sampling, Work Simplification, Job Evaluation, Merit Rating.
Time Rate Remuneration Plans
154
Suitability, Advantages and Disadvantages, Flat Time Rate Plan, High Day Rate Plan, Plan with Different Time Rates,
Halsey Premium Bonus Plan, Rowan Premium Bonus Plan, Comparison of Halsey and Rowan Plans, Halsey-Wair Plan,
Accelerated Premium Bonus Plan, Emersons Efficiency Bonus Plan, Barth Variable Bonus Plan, Bedaux Points Plan,
Gnatts Task Bonus Plan.
Piece Rate Remuneration Plans
164
Straight Piece Rate Plan, Piece Rate with Guaranteed Time Rate Plan, Differential Piece Rate Plan, Taylors Differential
Piece Rate Plan, Merricks Differential Piece Rate Plan.
168
Group Bonus Plans
Applicability, Advantages and Disadvantages, Priestmans Production Bonus Plan, Cost Efficiency Bonus Plan, Ruckers
Plan, Nunn-Bush Plan, Towne Gain Sharing Plan, Profit Sharing Plan, Co-partnership Plan.
Requisites of Good Wage Incentive Plan
Key Terms
173
172
174
174

.......................................................................................................................................................
Chapter 7
DIRECT LABOUR : TURNOVER AND ACCOUNTING

Labour Cost Records
198
Clock Card, Daily or Weekly Time Sheet, Job Cards, Piece Work Cards.
Accounting of Labour Cost
198
Payroll Accounting, Labour Cost Accounting, Time Keeping, Time Booking.

Labour Turnover
201
Causes of Labour Turnover - Avoidable Causes, Unavoidable Causes, Measures to Reduce Labour Turnover, Measurement
of Labour Turnover, Costs of Labour Turnover - Preventive Costs, Replacement Costs, Treatment of Cost of Labour
Turnover.
Idle Time
208
Causes of Idle Time - Causes of Normal and Abnormal Idle Time, Accounting Treatment of Idle Time - Normal and
Abnormal Idle Time.
C-14
Cost Accounting
Overtime Premium
210
Accounting Treatment, Measures to Control Overtime Premium, Disadvantages of Overtime Working.

Treatment of Special Labour Costs
211
Cost of Apprentice, Employee Welfare Costs, Fringe Benefits, Bonus, Gratuity.

Incentive Schemes
212
Incentive Schemes for Indirect Workers, Indirect Incentive to Direct Workers, Casual and Out Worker.
Key Terms
213
214
215

.......................................................................................................................................................
Chapter 8
OVERHEADS : ALLOCATION AND APPORTIONMENT

Accounting of Overheads
234
Definition and Meaning of Overheads, Definition and Meaning of Direct Expense, High Overhead Costs and Test of Efficiency, Steps
in Accounting of Overheads, Classification and Codification of Overheads, Collection of Overheads, Cost Allocation, Criteria for
Common Cost Allocation, Allocation and Apportionment of Overheads, Departmentalization, Allocation, Apportionment, Criteria
for Apportionment of Overheads, Distinction Between Allocation and Apportionment.
Production Overhead
239
Classification of Production Cost, Representative Types and Basis of Apportionment.

Re-apportionment of Service Centre Costs
240
Rationale for Allocating Service Department Costs, Direct Method, Step Method, Repeated Distribution Method,
Simultaneous Linear Equation (Matrix) Method.
Administration Overhead
248
Definition and Meaning, Classification of Administration Cost, Representative Types of Administration Overhead,
Treatment of Administrative Overheads in Cost Accounting.
Selling and Distribution Overheads
249
Meaning and Classes, Basis of Apportionment, Accounting, Problems in Controlling.

Key Terms
253
254
255

.......................................................................................................................................................
Chapter 9
OVERHEADS : ABSORPTION AND RECOVERY

Absorption of Production Overheads
279
Definition and Meaning, Methods of Production Overhead Absorption - Production Unit Method, Percentage of Direct
Material Cost Method, Percentage of Direct Labour Cost Method, Percentage of Price Cost Method, Direct Labour Hour
Rate Method, Machine Hour Rate Method.
Single and Departmental Overhead Absorption Rates
284
Single Overhead Absorption Rate, Departmental Overhead Absorption Rates, Predetermined Overhead Absorption
Rates.
Contents
Over and Under Absorption of Overheads
C-15
286
Reasons for Over or Under Recovery, Treatment of Under/Over Absorption of Overheads.

Key Terms
288
288
289

.......................................................................................................................................................
Chapter 10
OVERHEADS : TREATMENT OF SPECIAL ITEMS

Idle Capacity Costs
311
Interest on Capital
311
Arguments in Favour of Inclusion, Arguments Against Inclusion.

Depreciation
313
Definition and Meaning, Depreciation and Cashflow, Depreciation and Inflation, Obsolescence, Depreciation and
Obsolescence : Distinction, Methods of Providing Depreciation, Importance of Sound Depreciation Policy, Plant and
Other Fixed Assets Registers, Using of Asset After Fully Depreciated.
316
Treatment of Special Items of Overheads
Idle Capacity Costs, Material Handling Expenses, Market Research Expenses, Subscriptions and Donations, After Sales
Service Costs, Royalties and Patent Fees, Training Costs, Taxation, Financing Charges, Major Repairs to Equipment, Cost
of Tools, Bad Debts, Notional Rent, Packing Expenses, Data Processing Cost, Stores Overhead, Erection and Dismantling
of Plant and Machinery, Transport Cost, Insurance Cost.
321
Research and Development Costs
Examples of R&D Costs, Treatment of Research Cost, Treatment of Development Cost.

Waste, Scrap, Spoilage and Defectives
322
WASTE - Accounting of Waste, Control of Waste; SCRAP - Accounting of Scrap, Classification of Scrap, Control of Scrap;
SPOILAGE - Accounting of Spoilage, Control of Spoilage; DEFECTIVES - Causes of Defectives, Classification of Defectives,
Accounting of Defectives, Control of Defectives.
Key Terms
325
326
327

.......................................................................................................................................................
Chapter 11
ACTIVITY BASED COSTING : SYSTEMS AND PROCEDURES

Traditional Cost System
334
How Traditional Cost System Works? Classification of Manufacturing Costs, Dangers of Incorrect Cost Information, Inadequacies of
Traditional Cost Systems, Reasons for Emergence of Activity Based Costing System, Features of Cost System in World-Class
Company.
Meaning and Objectives of ABC
337
Definition and Meaning, Objectives of ABC.

Steps in ABC System
340
Distinction between Value Added and Non-Value Added Activities, Different Categories of Cost Pools and its Cost
Drivers, Difficulties in adoption of ABC in Service Organization.
Advantages and Limitations of ABC
349
Advantages, Limitations, How ABC System Supports Corporate Strategy?
C-16
Cost Accounting
Other Concepts in ABC
351
Activity Based Information and Decision Making, Activity Based Budgeting, Activity Based Management, Activity Based
Accounting.
Key Terms
355
356
357

.......................................................................................................................................................
Chapter 12
COSTING METHODS : OUTPUT COSTING, JOB COSTING AND BATCH COSTING

Output Costing
384
Meaning, Ascertainment of Cost of Production and Profit, Multiple Costing, Production Account and Cost Sheet : Distinction.
388
Job Costing
Definition and Meaning, Features, Procedures, Advantages.

Batch Costing
392
Definition and Meaning, Economic Batch Production, Job Costing and Batch Costing : Distinction.
Key Terms
396
396
397

.......................................................................................................................................................
Chapter 13
CONTRACT COSTING : RUNNING CONTRACTS

AND CONTRACTS NEARING COMPLETION
Definition and Features
423
Definition and Meaning of Contract Costing, Features of Contracts, Job Costing and Contract Costing : Distinction.
Accounting Procedure
424
Accounting Treatment of Costs, Surveyors Certificate and Retention Money, Ascertainment of Work-in-Progress.
Costing of Running Contracts
425
Costing of Contracts Nearing Completion

Cost Plus Contracts
427
429
Definition and Meaning, Principles, Merits and Demerits, Bid Costing and Cost Plus Contract Costing : Distinction.
Fixed Price Contract with Escalation Clause
Key Terms
433
431
434
435

.......................................................................................................................................................
Chapter 14
OPERATING COSTING : APPLICATION IN SERVICE SECTOR

Meaning of Service Costing
465
Definition of Service Costing, Service Cost per Unit, Application of Service Costing, Service Costing and Output Costing : Distinction.
Contents
Forms of Service Costing
C-17
467
Transport Costing, Absolute and Commercial Tonne- Kms., Hotel Costing, Canteen Costing, Power House Costing, Hospital Costing,
Customer Costing in Service Sector, Customer Profitability Analysis, Pricing by Service Sector.
Key Terms
477
477
478

.......................................................................................................................................................
Chapter 15
PROCESS COSTING : ASCERTAINMENT OF COST AND PROFITABILITY

Process Costing
498
Definition and Meaning, Features, Job Costing and Process Costing : Distinction.
Process Losses and Gains
499
Normal Loss, Abnormal Loss, Abnormal Gain.

Operation Costing
Key Terms
502
503
504
504

.......................................................................................................................................................
Chapter 16
PROCESS COSTING : EQUIVALENT UNITS

Valuation of Work-in-Progress
524
Definition and Meaning of Equivalent Production, Valuation of WIP when only Closing WIP exists, Valuation of WIP
when Opening and Closing WIP exists - FIFO Method, LIFO Method, Average Cost Method; Steps in Valuation of
Equivalent Units.
Key Terms
529
529
529

.......................................................................................................................................................
Chapter 17
JOINT PRODUCTS AND BY-PRODUCTS : ASCERTAINMENT OF COST AND

PROFITABILITY; DECISIONS ON FURTHER PROCESSING
Joint Products
549
Definition and Meaning of Joint Products, Meaning of Co-Products.

Methods of Accounting for Joint Products
550
Physical Units Method, Market Value Method, Contribution Margin Method, Average Unit Cost Method, Survey Method, Standard
Cost Method, Direct Allocation Method.
By-Products
552
Definition and Meaning of By-Products, Scrap and By-Product : Distinction, Meaning of Waste.
Methods of Accounting for By-Products
553
Cost Methods, Non-Cost or Sales Value Method, Selection of Appropriate Accounting Method, Joint Product and By-Product :
Distinction, Objectives for Allocation of Joint Costs.
Key Terms
556
557
558

.......................................................................................................................................................
C-18
Cost Accounting
Chapter 18
RECONCILIATION OF PROFIT : COST ACCOUNTS AND FINANCIAL ACCOUNTS

Cost and Financial Accounts : Reconciliation of Profit
576
Need for Reconciliation, Reasons for Disagreement.

578
Method of Reconciliation
Memorandum Reconciliation Account, Reconciliation Statement.

Key Terms
582
582
583

.......................................................................................................................................................
Chapter 19
COST BOOK-KEEPING : NON-INTEGRATED AND INTEGRATED COST SYSTEMS

Non-Integrated Accounting
600
Meaning, Inter-locking of Accounts, Principal Ledgers and Control Accounts.

604
Integrated Accounting System
Definition and Meaning, Benefits, Prerequisites for Integration of Accounts

Accounting Treatment
615
Pre-requisites for computerization of Accounts, Accounting Entries under both Methods.

Key Terms
618
618
619

.......................................................................................................................................................
Chapter 20
BREAK-EVEN AND COST-VOLUME-PROFIT ANALYSIS : IN MULTI PRODUCT AND

UNCERTAINTY SITUATIONS
Break-even Analysis
639
Construction of Break-even Chart, Formulas used in Break-even Analysis, Assumptions and Limitations, Cash Break-even, ProfitVolume Ratio, Margin of Safety, Angle of Incidence, Relationship of BEP, Margin of Safety and Angle of Incidence, Impact of Selling
Price, Fixed Cost and Variable Cost on BEP.
Cost-Volume-Profit Analysis
647
Meaning of CVP Analysis, Procedure in CVP Analysis, Benefits of CVP Analysis, Assumptions in CVP Analysis, Practical Difficulties in
CVP Analysis.
Profit-Volume Chart
650
Construction of Profit-Volume Chart, Profit-Volume Chart with Change in Selling Price, Profit-Volume Chart in Multi-Product
Situations.
Curvilinear Break-even Analysis
656
CVP Analysis Under Uncertainty : Simulation Technique
658
Statistical Distributions
CVP Analysis Under Uncertainty : Normal Distribution Curve
Application of Linear Programming in CVP Analysis
664
659
Contents
Simulated Break-even Point Analysis

Key Terms
666
C-19
665
667
668

.......................................................................................................................................................
Chapter 21
MARGINAL COSTING TECHNIQUE : APPLICATIONS IN DECISION MAKING

Absorption Costing
700
Meaning of Absorption Costing, Growing Importance of Overheads, Criteria for Absorption of Overheads, Advantages and
Limitations of Absorption Costing.
Direct Costing
703
Meaning of Direct Costing, Direct Costing and Absorption Costing : Distinction.

Marginal Costing
704
Meaning of Marginal Cost and Marginal Costing, Contribution and Profit : Distinction, Formulas used in Marginal Costing, Features
of Marginal Costing, Arguments in Favour of Marginal Costing, Criticism Against Marginal Costing, Absorption Costing and
Marginal Costing : Distinction, Absorption Costing and Marginal Costing : Impact on Profit.
Practical Applications of Marginal Costing
714
Key or Limiting Factor Analysis, Profit Planning, Selection of Profitable Product Mix, Make or Buy Decisions, Introduction of a New
Product, Discontinuance of a Product or Closure of a Department, Accept or Reject Special Offer and Subcontracting, Planning of
Activity Level, Market Expansion, Temporary Cessation of Operations.
Key Terms
719
720
722

.......................................................................................................................................................
Chapter 22
BUDGETING : PREPARATION OF BUDGETS AND CONTROL OF VARIANCES

Definition and Meaning of Budgetary System
789
Meaning and Definition - Budget, Budgeting, Budgetary Control, Budget and Forecast : Distinction, Requirements of a Sound
Budgeting System, Advantages of Budgeting, Problems in Budgeting.
Budgeting Process
793
Steps in Budgeting Process, Other Requirements in Budgeting Process.

Preparation of Budgets and Analysis of Variances
797
Kinds of Budgets, Analysis of Cost Variances, Behavioural Aspects of Budgeting.

Flexible Budgeting
802
Meaning, Proforma of Flexible Budget, Advantages and Disadvantages of Flexible Budget, Fixed Budget and Flexible Budget :
Distinction.
Zero Base Budgeting
805
Meaning of ZBB, Requisites for Implementation of ZBB, Features of ZBB, ZBB and Traditional Budgeting : Distinction, ZBB and
Incremental Budgeting, ZBB and Decision Packages, ZBB and Feedback Control, Benefits of ZBB, Criticism of ZBB.
Program Budgeting
810
Meaning of PPBS, Constituent Parts of PPBS, PPBS and Conventional Budgeting : Distinction, Stages in PPBS, Procedure for
Developing PPBS, Advantages of PPBS.
C-20
Cost Accounting
Performance Budgeting
813
Meaning, Requisites, Comparison with Traditional Budgeting and Program Budgeting, Steps in Implementation, Purposes,
Requirements for Introduction.
816
Rolling Budgeting
Meaning, Advantages and Disadvantages.

Planning and Control Budgeting
817
Meaning, Planning Budget and Control Budget : Distinction, Critical Planning Variables, Similarities and Differences.
Responsibility Budgeting
819
Meaning, Proforma of Responsibility Budget.

Participative Budgeting
820
Meaning, Advantages.
Key Terms
821
823
824

.......................................................................................................................................................
Chapter 23
STANDARD COSTING : TERMINOLOGY, VARIANCE ANALYSIS AND INVESTIGATION

Standard Costing System
857
Definition and Meaning of Standard Costing, Objectives of Standard Costing, Terminology on Standards, Types of Standards,
Setting Standards, Standard Costing System During Inflation, Standard Costing and Activity Based Costing, Standard Costing and
AMT, Standard Cost Card, Responsibility for Setting Standards, Setting Up Production Standards and Establishment of Standard
Costs, Problems in Setting Standard Costs, Advantages of Standard Costing, Criticism on Standard Costing, Standard Cost and
Estimated Cost : Distinction, Standard Costing and Budgetary Control : Distinction, Behavioural Consideration in Standard Costing.
Variance Analysis
868
Definition and Meaning, Material Variances, Labour Variances, Variable Production Overhead Variances, Fixed Production
Overhead Variances, Sales Variances, Sales Variances Based on Profit, Sales Variances Based on Turnover, Profit Variances, Disposal
of Variances.
Revision of Standards, Interpretation and Disposal of Variances
895
Revision of Standards, Revision Variance, Interpretation of Variances, Causes of Variance, Reasons for Cost Variances,
Interdependence Between Variances, Disposal of Variances.
Techniques of Investigation of Variances
899
Heuristics, Trend Analysis, Statistical Control Charts, Decision Tree Approach, Decision Theory Approach (Game Theory), Economics
of Control of Variances.
Key Terms
910
911
912

.......................................................................................................................................................
Chapter 24
UNIFORM COSTING AND INTERFIRM COMPARISONS

Uniform Costing
961
Definition and Meaning, Objectives, Requisites for Installation, Uniform Cost Manual and Its Contents, Benefits and Limitations.
Contents
Interfirm Comparisons
C-21
966
Meaning, Prerequisites, Problems, Advantages and Limitations.

Key Terms
969
970
Choose Correct Answer
970

.......................................................................................................................................................
Chapter 25
COST AUDIT AND MANAGEMENT AUDIT

Cost Audit
974
Definition and Meaning, Objectives, Important Legal Provisions, Important Provisions of Cost Audit Report Rules, 1996, Cost Audit
and Financial Audit : Distinction, Cost Accounting Records.
Management Audit
980
Definition and Meaning, Objectives, Scope, Weaknesses Revealed.

Efficiency Audit and Propriety Audit
982
Efficiency Audit, Propriety Audit.

Key Terms 983
Theoretical Questions 983
.......................................................................................................................................................
Chapter 26
LATEST DEVELOPMENTS IN COST ACCOUNTING

Target Costing
986
Definition and Meaning of Target Costing, Steps in Target Costing, Target Costing Methodology, Target Costing Approach to
Product Pricing, Methods of Establishment of Target Costs.
994
Backflush Accounting
Definition and Meaning, Problems, Advantages, Variants of Backflush Accounting.

Throughput Accounting
1000
Meaning and Definition, Basic Concepts, Traditional Product Costing and Throughput Accounting (TA) : Distinction, Bottlenecks
and Overhead Attribution.
Resource Consumption Accounting
1004
Definition and Meaning, Methodology in Implementation of RCA, Advantages of RCA, Difficulties in Implementation of RCA.
Lean System
1007
Meaning of Lean Thinking, Steps in Lean Thinking, Lean Production System, Meaning of Lean Management Accounting,
Advantages of Lean Management Accounting.
Attributable Costing
Key Terms
1010
1010
1011
1012

.......................................................................................................................................................

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Chapter Heads

Cost Accounting : Systems, Objectives and Essentials

Cost Concepts : Terminology and Classification

Cost Concepts : Behaviour and Segregation

Direct Material : Procurement Procedures and Accounting of Issues

Direct Material : Stock Control Techniques

Direct Labour : Remuneration Systems

Direct Labour : Turnover and Accounting

Overheads : Allocation and Apportionment

Overheads : Absorption and Recovery

Overheads : Treatment of Special Items

Activity Based Costing : Systems and Procedures

Costing Methods : Output Costing, Job Costing and Batch Costing

Contract Costing : Running Contracts and Contracts Nearing Completion

Operating Costing : Application in Service Sector

Process Costing : Ascertainment of Cost and Profitability

Process Costing : Equivalent Units

Joint Products and By-products : Ascertainment of Cost and Profitability;

Reconciliation of Profit : Cost Accounts and Financial Accounts

Cost Book-keeping : Non-Integrated and Integrated Cost Systems

Break-even and Cost-Volume-Profit Analysis : In Multi Product and Uncertainty Situations

Marginal Costing Technique : Applications in Decision Making

Budgeting : Preparation of Budgets and Control of Variances

Standard Costing : Terminology, Variance Analysis and Investigation

Uniform Costing and Interfirm Comparisons

Cost Audit and Management Audit

Latest Developments in Cost Accounting

COST ACCOUNTING : SYSTEMS, OBJECTIVES AND ESSENTIALS

True or False Statements

Choose Correct Answer 18

COST CONCEPTS : TERMINOLOGY AND CLASSIFICATION

True or False Statements

Choose Correct Answer 39

COST CONCEPTS : BEHAVIOUR AND SEGREGATION

Segregation of Semi-variable Costs

Coefficient of Correlation, Coefficient of Determination.

True or False Statements

Choose Correct Answer 63

DIRECT MATERIAL : PROCUREMENT PROCEDURES AND ACCOUNTING OF ISSUES

True or False Statements

Choose Correct Answer 96

DIRECT MATERIAL : STOCK CONTROL TECHNIQUES

Input-Output Ratio, Stock Turnover Ratio.

Inventory Control Techniques

True or False Statements

Choose Correct Answer 129

DIRECT LABOUR : REMUNERATION SYSTEMS

Direct Labour Cost, Indirect Labour Cost, Items of Labour Cost.

Group Bonus Plans

True or False Statements

Choose Correct Answer 175

DIRECT LABOUR : TURNOVER AND ACCOUNTING

Payroll Accounting, Labour Cost Accounting, Time Keeping, Time Booking.

Accounting Treatment, Measures to Control Overtime Premium, Disadvantages of Overtime Working.

Cost of Apprentice, Employee Welfare Costs, Fringe Benefits, Bonus, Gratuity.

True or False Statements

Choose Correct Answer 216

OVERHEADS : ALLOCATION AND APPORTIONMENT

Classification of Production Cost, Representative Types and Basis of Apportionment.

Meaning and Classes, Basis of Apportionment, Accounting, Problems in Controlling.

True or False Statements

Choose Correct Answer 255

OVERHEADS : ABSORPTION AND RECOVERY

Over and Under Absorption of Overheads