Contents

Chapter 1 COST ACCOUNTING : SYSTEMS, OBJECTIVES AND ESSENTIALS

Meaning and Terminology 2
Cost, Costing, Cost Accounting, Cost Accountancy, Cost Unit, Cost Object.
Comparison with Financial Accounting 5
Cost Accounting System 6
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.
Methods of Costing 13
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
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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 o f Efficient
Coding System, Methods of Codification of Costs.
Key Terms 35 Theoretical Questions 37 True or False
Statements 38
Choose Correct Answer 39 Examination Problems 41
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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.
Segregation of Semi -variable Costs 49
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 Theoretical Questions 62 True or False
Statements 63
Choose Correct Answer 63 Examination Problems 66
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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 Theoretical Questions 94 True or False
Statements 95
Choose Correct Answer 96 Examination Problems 98
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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.
Inventory Control Techniques 116
Economic Order Quantity, Pull System in Inventory Control, Fixation of
Inventory Levels, VED Analysis, FNSD Analysis, ABC Analysis, Just In Time
Inventory Manag ement.
Key Terms 126 Theoretical Questions 127 True or False
Statements 128
 Choose Correct Answer 129 Examination
Problems 131
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Chapter 6 DIRECT LABOUR : REMUNERATION SYSTEMS

Items of Labour Cost 151
Direct Labour Cost, Indirect Labour Cost, Items of Labour Cost.
Studies at W ork 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 -
W air Plan, Accelerated Premium Bonus Plan, Emerson’s Efficiency Bonus
Plan, Barth Variable Bonus Plan, Bedaux Points Plan, Gnatt’s Task Bonus
Plan.
Piece Rate Remuneration Plans 164
Straight Piece Rate Plan, Piece Rate with Guaranteed Time Rate Plan,
Differential Piece Rate Plan, Taylor’s Differential Piece Rate Plan, Merrick’s
Differential Piece Rate Plan.
Group Bonus Plans 168
Applicability, Advantages and Disadvantages, Priestman’s Prod uction Bonus
Plan, Cost Efficiency Bonus Plan, Rucker’s Plan, Nunn -Bush Plan, Towne Gain
Sharing Plan, Profit Sharing Plan, Co -partnership Plan.
Requisites of Good W age Incentive Plan 172
Key Terms 173 Theoretical Questions 174 True or False
Statements 174
Choose Correct Answer 175 Examination
Problems 178
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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.
Overtime Premium 210
Accounting Treatment, Measures to Control Overtime Premium, Disadvantages
of Overtime W orking.
Treatment of Special Labour Costs 211
Cost of Apprentice, Employee W elfare Costs, Fringe Benefits, Bonus, Gratuity.
Incentive Schemes 212
Incentive Schemes for Indirect W orkers, Indirect Incentive to Direct W orkers,
Casual and Out W orker.
 Key Terms 213 Theoretical Questions 214 True or False
Statements 215
Choose Correct Answer 216 Examination
Problems 219
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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 Theoretical Questions 254 True or False
Statements 255
Choose Correct Answer 255 Examination
Problems 258
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Chapter 9 OVERHEADS : ABSORPTION AND RECOVERY

Absorption of Production Overheads 279
Definition and Meaning, Methods of Pr oduction 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 Ov erhead Absorption Rates 284
Single Overhead Absorption Rate, Departmental Overhead Absorption Rates,
Predetermined Overhead Absorption Rates.
Over and Under Absorption of Overheads 286
Reasons for Over or Under Recovery, Treatment of Under/Over Absorptio n of
Overheads.
Key Terms 288 Theoretical Questions 288 True or False
Statements 289
Choose Correct Answer 289 Examination
Problems 291
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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.
Treatment of Special Items of Overheads 316
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 R epairs 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.
Research and Development Costs 321
Examples of R&D Cost s, Treatment of Research Cost, Treatment of
Development Cost.
W aste, Scrap, Spoilage and Defectives 322
W ASTE - Accounting of W aste, Control of W aste; 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 Theoretical Questions 326 True or False
Statements 327
Choose Correct Answer 327 Examination
Problems 328
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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?
Other Concepts in ABC 351
Activity Based Information and Decision Making, Activity Based Budgeting,
Activity Based Management, Activity Based Accounting.
Key Terms 355 Theoretical Questions 356 True or False
Statements 357
Choose Correct Answer 358 Examination
Problems 360
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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.
Job Costing 388
Definition and Meaning, Features, Procedures, Advantages.
Batch Costing 392
Definition and Meaning, Economic Batch Production, Job Costing and Batch
Costing : Distinction.
Key Terms 396 Theoretical Questions 396 True or False
Statements 397
Choose Correct Answer 397 Examination
Problems 400
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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, Surveyor’s Certificate and Retention Money, Ascertainment
of Work-in-Progress.
Costing of Running Contracts 425
Costing of Contracts Nearing Completion 427
Cost Plus Contracts 429
Definition and Meaning, Principles, Merits and Demerits, Bid Costing and C ost
Plus Contract Costing : Distinction.
Fixed Price Contract with Escalation Clause 431
Key Terms 433 Theoretical Questions 434 True or False
Statements 435
Choose Correct Answer 435 Examination
Problems 438
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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.
Forms of Service Costing 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 Theoretical Questions 477 True or False
Statements 478
Choose Correct Answer 478 Examination
Problems 480
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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 502
Key Terms 503 Theoretical Questions 504 True or False
Statements 504
Choose Correct Answer 505 Examination
Problems 507
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Chapter 16 PROCESS COSTING : EQUIVALENT UNITS

Valuation of W ork -in-Progress 524
Definition and Meaning of Equivalent Production, Valuation of W IP when only
Closing W IP exists, Valuation of W IP when Opening and Closing W IP exists -
FIFO Method, LIFO Method, Average Cost Method; Steps in Valuation of
Equivalent Units.
Key Terms 529 Theoretical Questions 529 True or False
Statements 529
Choose Correct Answer 529 Examination
Problems 530
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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 Theoretical Questions 557 True or False
Statements 558
Choose Correct Answer 558 Examination
Problems 560
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Chapter 18 RECONCILIATION OF PROFIT : COST ACCOUNTS AND FINANCIAL

ACCOUNTS
Cost and Financial Accounts : Reconciliation of Profit 576
Need for Reconciliation, Reasons for Disagreement.
Methods of Reconciliation 578
Memorandum Reconciliation Account, Reconciliation Statement.
Key Terms 582 Theoretical Questions 582 True or False
Statements 583
Choose Correct Answer 583 Examination
Problems 584
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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.
Integrated Accounting System 604
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 Theoretical Questions 618 True or False
Statements 619
Choose Correct Answer 619 Examination
Problems 620
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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, Profit-Volume 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 : Simula tion Technique 658
Statistical Distributions
CVP Analysis Under Uncertainty : Normal Distribution Curve 659
Application of Linear Programming in CVP Analysis 664
Simulated Break -even Point Analysis 665
Key Terms 666 Theoretical Questions 667 True or False
Statements 668
Choose Correct Answer 669 Examination
Problems 673
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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 Theoretical Questions 720 True or False
Statements 722
Choose Correct Answer 722 Examination
Problems 726
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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.
Performance Budgeting 813
Meaning, Requisites, Comparison with Traditional Budgeting and Program Budgeting, Steps
in Implementation, Purposes, Requirements for Introduction.
Rolling Budgeting 816
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 Theoretical Questions 823 True or False
Statements 824
Choose Correct Answer 825 Examination
Problems 827
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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 Varianc es 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 Theoretical Questions 911 True or False
Statements 912
Choose Correct Answer 913 Examination
Problems 916
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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.
Interfirm Comparisons 966
Meaning, Prerequisites, Problems, Advantages and Limitations.
Key Terms 969 Theoretical Questions 970 Choose Correct
Answer 970
Examination Problems 971
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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 Choose Correct
Answer 984
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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.
Backflush Accounting 994
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 1010
Key Terms 1010 Theoretical Questions 1011 True or False
Statements 1012
Choose Correct Answer 1012
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