Course Title: Cost Accounting

Course Code: ACTG3110

i. Introduction:
This course is designed to make the students familiar with the application of basic methods
and techniques of cost accounting. The course deals with the cost concepts, cost classification
and cost flows, material, labor, factory overhead costing.
ii. Objectives:
To provide the students with an appropriate knowledge of Cost Accounting to enable them to:
preparing and presenting information for decision-
making and cost control.
iii. Outcomes:
On completion of this course, students should be able to:
scope, cost flow and classification,
cost statement under process cost accounting system
and job order costing system, respectively,
tand and explain material, labor, factory overhead costing and control,


1.Cost Accounting Concepts and Objectives

1.1 The concept Management
1.2 Planning, Controlling, Organizing
1.3 The Organization Chart
1.4 Definition and concept of cost, Cost object, Cost elements, Sources and uses of cost data
1.5 Cost accounting v/s financial accounting, Costing department and its relationship with
Other departments
1.6 Role of cost accounting in a management information system, Uses of cost data.

2. Cost Terms Concepts and Classifications
2.1 Manufacturing cost, direct material, direct Labor, Manufacturing Overhead, Prime Cost,
Conversion Cost , Non Manufacturing Cost , Product Cost and period Cost
2.2 Comparison of Merchandising and manufacturing Activities, Schedule of Cost of goods
manufactured
2.3 Fixed Cost, Variable Cost, Fixed Cost per unit, Variable Cost per unit, Opportunity Cost,
Sunk Cost, Idle time, Overtime Premium

3. Cost of goods Manufactured and Income Statement
3.1 Cost, Expense, Classification of Cost, Natural Classification of Cost, Elements of Cost,
Prime Cost, Conversion Cost
3.2 Fixed factory overhead, Variable factory overhead, Semi Variable overhead
3.3 Direct Expenses, Indirect Expenses, Inventories for a Manufacturing Concern, Flow of
Manufacturing Cost, Cost of Goods Statement

4. The Cost Accounting System (Design and Operation)
4.1 Fundamentals of Cost Accounting Information System, Chart of Accounts
4.2 Data Processing by means of the Journal Voucher Control System
4.3 The Manufacturing Cost Accounting Cycle, Control Account, Subsidiary Ledger or
record
4.4 General Office, Factory Office Records, Electronic Data Processing

5. Job Order Costing
5.1 Cost Systems Actual or Standard
5.2 The Job Order Cost Procedure, The Process Cost procedure
5.3 Job Order Cost Accumulation Procedures, Job Order Cost Sheets
5.4 Cost Accounting Procedures for Materials, Cost Accounting procedures for Labor,
5.5 Cost Accounting Procedures for Factory Overhead, Estimated Factory Overhead, Applied
Factory overhead, accounting procedure for completed products and sold

6. Process Costing
Cost of Production Report, Lost unit calculations
6.1 Characteristics and Procedures of Process Costing, Costing by departments
6.2 Product Flow, Sequential Product flow, Selective Product flow
6.3 Procedures for Materials, Labor, and Factory Overhead Costs, Materials Costs, Labor Costs,
Factory overhead costs
6.4 The Cost of Production Report, Quantity Schedule, Cost Charged to department, Cost
Accounted for as follows, Equivalent Production, Unit Costs, Units Lost in the first department,
Units Lost in Department Subsequent to the first, Timing of Lost Units, Normal vs. Abnormal
Loss of Units, Combined Cost of production Reports

7. Process Costing
Addition of materials, Average and FIFO costing
7.1 Addition of Materials, Increase in Units and Change In unit Cost due to Addition of
materials
7.2 Beginning work in process inventories, Average costing, First in First Out (FIFO) Costing,
7.3 Average Costing vs. Fifo Costing, Difficulties encountered in Process Cost Accounting
procedures

8. By-Product and Joint Product Costing
8.1 Difficulties in Costing By-Product and Joint Products, Joint Products and Cost defined, By-
Products defined
8.2 Nature of By-Products, Methods of Costing By-Products, Recognition of Gross Revenue,
8.3 Recognition of Net Revenue, Replacement Cost Method, Market Value Method,
8.4 Characteristics of Joint Products and Cost, Methods of Allocating the Joint Production Cost,
8.5 Market or Sales value Method, Quantitative Unit Method, Average Unit Cost Method,
Weighted average method

9. Planning and Control of Factory Overhead
Factory Overhead Planned, Applied and Actual with variance analysis
9.1 Factory Overhead Predetermined, The use of Predetermined Factory Overhead Rate,
9.2 Factors to be considered in Selection of Overhead Rates, Base to be used
9.3 Activity Level Selection, Factory Overhead Actual, Steps in Accounting for Actual Factory
overhead
9.4 Principal Original Records, Books of Original Entry, Factory Overhead Control Account
9.5 Factory Overhead-Applied, Over or Under Applied, and Variance Analysis, Disposition of
Over or under applied factory overhead

10. Factory Overhead
Departmentalization for Product Costing and Cost Control
10.1 The Concept of Departmentalization, Production and Service Departments
10.2 Selection of Producing Departments, Selection of Service Departments
10.3 Direct Departmental expenses in Producing and Service Departments, Supervision,
10.4 Indirect labor, and Overtime, Labor fringe benefits, Indirect Materials and Factory
Supplies
10.5 Direct departmental charges, Charge to Inventory, Repairs and Maintenance, Equipment
depreciation, Indirect Departmental expenses, Establishing departmental Overhead rates,
Estimating direct departmental expenses, Factory survey, Estimating and Allocating Indirect
expenses, Distributing Service departments cost, Algebraic method for overhead distribution,
10.6 Actual Factory overhead departmentalized, Departmental expense analysis sheet, Over-or
under applied factory overhead, Spending and Idle Capacity variance analysis, Overhead
Departmentalization in Non Manufacturing business and Non Profit Organizations



Recommended Books:

Cost Accounting Planning and Control
By Adolph Matz, Milton F. Usry
Seventh Edition


Distribution of Marks
Internal Assessment External Assessment
Assignment Quizzes Others Midterm Total Terminal Total
10 10 5 25 50 50 100