Cost and Management Accounting

Cost accounting and management accounting; Meaning, objectives, advantages andlimitations of cost and management accounting; Limitations of financial accounting;Similarities and dissimilarities in financial, cost and management accounting

Concept, importance and classification of cost: basic concept of cost and expense; costclassification: based on function, behavior, controllability, decision making, time ofrecording, planning and control, period and product cost;Cost segregation and estimation: concept and methods of cost segregation: i) Two pointmethod ii) Least square method and iii) Estimation of cost

Materials/Inventory: Concept, reasons and objectives for holding material/inventory.Inventory control: Meaning, importance and techniques; Economic order quantity:concept, techniques, formula and trial & error approaches-considering discount undercertainty condition; Re-order level, maximum stock level, minimum stock level, averagestock level, danger level and safety stock; Concept and techniques of perpetualinventory system; Stock control through ABC analysis and just in time inventory:concept, advantages and limitations.

Labour Cost: Concept and need for control of labour cost; Remuneration withoutpremium plan: Features of good remuneration system, time and piece wage system;Remuneration with premium Plan: Features of premium plan, premium bonus scheme- Halsey and Rowan Plan, Taylor's Differential Piece Rate, Gant's Task and Bonus Plan.

Overhead Cost: Meaning, features, importance and classification; Apportionment andabsorption of overhead: meaning and importance; apportionment and absorption ofoverhead cost based on volume, direct labour hours and direct machine hours.

Service Costing: Concept, features and scope of service costing; Preparation of cost sheetfor transport service for passenger, hospital, hotel and restaurant services, limitations ofservice costing.

Variable Costing and Absorption Costing: Concept, features, importance and preparation of income statement under variable costing and absorption costing; Over and under absorption of fixed manufacturing overhead and adjustment; Limitations of variable costing and absorption costing; Reconciliation of profit or loss between absorption and variable costing techniques showing the causes of differences. Cost Volume Profit Analysis: Meaning, importance; assumptions and limitations of CVP analysis; Contribution margin or ratio, profit volume ratio; Break even analysis using contribution margin, algebraic approaches; Break-even-analysis: under various situations: changes on selling price, fixed cost, variable cost, multi-products situations, margin of safety and determination of selling price to realize desired profit ; Advantages and limitations of break even analysis.

Standard Costing: Concept of standard cost and standard costing, features, application,advantages and limitations; Difference between standard and budget. Variance Analysis; Material variances: Concept and calculation of cost, price, usage, mixand yield variances; Labour variances: Concept and calculation of cost, efficiency, rate,mix, idle time and yield variances.Overhead Cost Variance: Concept and calculation of capacity, efficiency and spendingvariances.

Concept, need and objectives of short term decisions in business; Cost concept indecision making: Relevant and irrelevant costs, avoidable and unavoidable costs, opportunity cost; Types of decisions: Drop or Continue, Special Offer/Order and Make orBuy