Cost and Management Accounting

bbasemester 3

This course contains conceptual and theoretical foundation of cost and management accounting ;It also comprises classification and segregation of cost, accounting for material and labour, allocation, apportionment and absorption of overhead cost, costing in different situations such as service costing, income statement under variable and absorption costing techniques, standard costing system with material and la bour cost variance,

Chapter Wise Notes Question Banks Syllabus Chapter Wise Questions

Cost and Management Accountings

Subject Code: ACC 202

Course Title: Cost and Management Accountings

Course No: ACC 202

Nature of Course: Theory & Practical

Full Marks: 100

Pass Marks: 50

Credit Hours: 3

Course Description

This course contains conceptual and theoretical foundation of cost and management accounting ;It also comprises classification and segregation of cost, accounting for material and labour, allocation, apportionment and absorption of overhead cost, costing in different situations such asservice costing, income statement under variable and absorption costing techniques, standard costing system with material and labour cost variance, flexible budgeting under different levelsof activities, overhead cost variance and functional budgeting.

Course Objective

The objectives of the course are to provide the students with in-depth knowledge of cost andmanagement accounting in order to enable them to develop, arrange and classify cost information required for decision making for maximizing the profit.

Course Contents

Unit 1: Conceptual Foundation 2 LHs
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

Unit 2: Cost Concept and Cost Classification 4 LHs
Concept, importance and classification of cost: basic concept of cost and expense; cost classification: based on function, behavior, controllability, decision making, time of recording, planning and control, period and product cost;Cost segregation and estimation: concept and methods of cost segregation: i) Two point method ii) Least square method and iii) Estimation of cost

Unit 3: Accounting for Materials 4 LHs
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.

Unit 4: Accounting for Labour Cost 3 LHs
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.

Unit 5: Accounting for Overhead Cost 5 LHs
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.

Unit 6: Costing in Service Sectors 6 LHs
Service Costing: Concept, features and scope of service costing; Preparation of cost sheetfor transport service for passenger, hospital, hotel and restaurant services, limitations of
service costing.

Unit 7: Accounting for Profit Planning 8 LHs
Variable Costing and Absorption Costing: Concept, features, importance and preparationof income statement under variable costing and absorption costing; Over and underabsorption of fixed manufacturing overhead and adjustment; Limitations of variablecosting and absorption costing; Reconciliation of profit or loss between absorption andvariable costing techniques showing the causes of differences.Cost Volume Profit Analysis: Meaning, importance; assumptions and limitations of CVPanalysis; Contribution margin or ratio, profit volume ratio; Break even analysis usingcontribution margin, algebraic approaches; Break-even-analysis: under various situations:changes on selling price, fixed cost, variable cost, multi-products situations, margin ofsafety and determination of selling price to realize desired profit ; Advantages andlimitations of break even analysis.

Unit 8: Cost Accounting for Planning and Control 12 LHs
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.Budget: concept, features and importance of budget; Types of budget: sales budget, production budget, material budget & merchandize purchase budget, labour budget,manufacturing overhead budget, cost of goods manufactured budget, selling/distribution
& administrative expenses budget and cost of goods sold budget. Fixed and Flexible Budgeting: Concept and importance of fixed and flexible budgets;Difference between fixed and flexible budgets; Flexible budgeting for overhead costcontrol on activity levels and budget allowance for actual level attained.

Unit 9: Short term Decision Making 4 LHs
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

Text Books

Atkinson, A. A., Kaplan, R. S., Matsumura, E.M., Young, S.M & Kumar, G. A. (2012).
Management Accounting /6e. New Delhi: Pearson Education Pvt. Ltd.
Garrison, R. H. & Noreen, E. W. (2017).Managerial Accounting McGraw-Hill Companies, Inc.
Lynch , R.M. & Williamson, R.W. Accounting for Management Planning & Control, Tata
McGraw Hill Co.
Pillai, R.S.N. & Bagavathi (2017). Cost Accounting New Delhi: S. Chand and Company Ltd.