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Cost Accounting (Paper-8) CMA Inter Group 1

Syllabus

INTRODUCTION TO COST ACCOUNTING [40 MARKS]
1. Introduction To Cost Accounting
  •  Definition, Scope, objectives and significance of cost accounting, its relationship with financial accounting and management accounting
  •  Cost Objects, Cost centers and Cost Units
  •  Elements of cost
  •  Classification of costs

A. Cost Ascertainment - Elements of Cost
1. Material Costs
  • Procurement of Materials
  • Inventory Management and Control
  • Inventory Accounting & Valuation
  • Physical Verification, treatment of losses
  • Scrap, spoilage, defectives and wastage
2. Employee Costs
  • Time keeping, Time booking and payroll
  • Labour Turnover, Overtime and idle time
  • Principles and methods of remuneration and incentive schemes
  • Employee cost reporting and measurement of efficiency

3. Direct Expenses

4. Overheads
  • Collection, classification and apportionment and allocation of overheads
  • Absorption and treatment of over or under absorption of overheads
  • Reporting of overhead costs

B. Cost Accounting Standards (Basic Understanding only) (CAS 1 to CAS 24)

C. Cost Book Keeping
  • Cost Accounting Records, Ledgers and Cost Statements
  • Items excluded from cost and normal and abnormal items/cost
  • Integral accounts
  • Reconciliation of cost accounting records with financial accounts
  • Infrastructure, Educational, Healthcare and Port services

METHODS OF COSTING [30 MARKS]
2. Methods of Costing
  •  Job Costing
  •  Batch Costing
  •  Contract Costing
  •  Process Costing – Normal and abnormal losses, equivalent production, Joint and By Products
  •  Operating Costing or Service Costing – Transport, Hotel and Hospital

COST ACCOUNTING TECHNIQUES [30 MARKS]
3. Cost Accounting Techniques (Basic Understanding only)
(A) Marginal Costing
  • Meaning of Marginal Cost and Marginal Costing
  • Absorption Costing vs. Marginal Costing
  •  Break-even analysis
  •  Margin of safety
  •  Application of Marginal Costing for decision making (simple problems only)
(B) Standard Costing & Variance Analysis
  • Concept of standard cost and standard costing
  • Advantages and limitations
  • Computation of variance relating to material and labour costs only
(C) Budget and Budgetary Control (simple problems only)
  •  Concepts, Types of Budgets
  •  Budgetary Control vs. Standard Costing
  •  Advantages and limitations
  •  Preparation of Budgets (simple problems only)