Cost and Management Accounting

The present text has been planned and designed as per the new syllabus of B.Com. (Hons.) Semester V of Vinoba Bhave University, Hazaribagh and to present the subject in simple language and lucid style.

Salient features of the book:

• The subject-matter has been arranged and systematised strictly according to course prescribed.
• The language and style of presentation are very simple and the subject-matter has been divided into various headings and sub-headings so as to give a flow in studying this numerical subject.
• Both theoretical and numerical aspects of the subject have been given due importance. The numerical illustrations have been carefully graded with supporting theoretical background. At many places, explanatory notes have also been given to clarify the working of a solution.
• Numerical illustrations and questions have been arranged in a systematic and scientific sequence from simple to complex.
• Illustrations and questions both have been arranged in an identical sequence so that students can easily solve the questions after understanding the illustration in the same order.
• All Chapters of Cost Accounting have been thoroughly revised.
• Chapter of Cash Flow Statement has been written strictly as per AS-3.
• In the selection of illustrations and questions priority has been given to university examination papers so that students may make practice according to that standard.
• Short answer and objective type questions (Theoretical & Numerical) have also been incorporated according to a new examination pattern of different universities.
• Standard but simple formulae have been used in different chapters and at the end of each chapter, all formulae relevant to that chapter have been given at one place.
• The Unique feature of the book is that all topics of the new syllabus have been incorporated in the book is proper detail.
• An important feature of the revised edition of this book is that all relevant chapters have been re-drafted as per the revised format of Balance Sheet and Statement of Profit & Loss given in Schedule III of the Companies Act, 2013. In this context, terminology has also been used as per new formats.

Cost and Management Accounting Syllabus of Vinoba Bhave University, Hazaribagh and St. Xavier’s College, Ranchi For B.Com. Semester V

Unit I: Introduction: Meaning, objectives and advantages of cost accounting, difference between Financial, Cost and Management Accounting, Cost concepts, Element of costs and Classifications of costs, Role of a cost accountant in an organization.

Unit II: Elements of Cost

a. Materials: Material/inventory control—concept and techniques, Accounting and control of purchases, storage and issue of materials, method of pricing of materials issues—FIFO, LIFO, Simple Average, Weighted Average, Salient features of Accounting Standards AS : 2 ICAI

b. Labour:  Accounting and control of labour cost, time keeping and time booking,concept and treatment of ideal time, over time, labour turnover and fringe benefits.

c. Overhead: Machine Hour Rate

Unit III: Methods of costing, unit costing including tender price calculation, contract costing, process costing (process losses, valuation of work in progress, joint and by-products), Reconciliation of cost and financial accounts.

Unit IV:

Management Accounting: Evolution, Meaning, Definition Characteristics, Scope, Objectives, Functions, Importance and Limitations of Management Accounting.

Financial Statements: Meaning, Objectives, Importance, Limitations of Financial Statement, Specimen of Financial Statements.

Analysis and Interpretation of Financial Statement: Meaning, Objectives, Importance and Limitations of Financial Statements.

Unit V: Techniques of Analysis and Interpretation of Financial Statements: Trend Technique, Common Size Technique, Comparative Technique, Ratio Analysis Technique, Fund Flow Statement Technique, Cash Flow Statement Technique.

Cost and Management Accounting Book Contents 

1. Cost Accounting: an Introduction
2. Cost: Elements, Concepts and Classification (As Per CAS-1)
3. Material Cost Accounting (Including Material Purchase and Issue Pricing)
4. Material/Inventory Cost Control: Concept and Techniques (Including Treatment of Material Losses)
5. Labour Cost Accounting Labour Turnover, Idle Time and Overtime (In the Context of CAS-7)
6. Methods of Wage Payment: Time Rates, Piece Rates and Incentive Schemes
7. Accounting for Overheads: Classification and Treatment
8. Overheads: Allocation, Apportionment (Departmentalisation) and Absorption (In the Context
   of CAS-3)
9. Machine Hour Rate Method
10. Unit or Output Costing-I (Cost Sheet, Cost Statement and Production Account)
11. Unit or Output Costing-Ii (Calculation of Estimates, Tender and Quotation Price)
12. Contract Costing (Including AS-7)
13. Job and Batch Costing
14. Process Costing (Including Joint Products and By-Products)
15. Process Costing: Inter-Process Profits
16. Process Costing: Equivalent Production
17. Reconciliation of Cost and Financial Accounts

• Appendix-1: Salient Features of Accounting Standards AS: 2 ICAI
• Appendix-2: Fringe Benefits
• Appendix: Cost Accounting Standards

Management Accounting

1. Management Accounting (An Introduction)
2. Financial Statements (Meaning, Type and Limitations)
3. Analysis and Interpretation of Financial Statements (Including Techniques of Analysis and Interpretation of Financial Statements)
4. Ratio Analysis
5. Cash Flow Statement (As Per Accounting Standard-3)
6. Funds Flow Statement