cost and management accounting - ca intermediate · chapter 1 – introduction to cost and...
TRANSCRIPT
Module - 2
BOARD OF STUDIES
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
Cost and Management
Accounting
Intermediate Course
Study Material (Modules 1 to 2)
Paper 3
© The Institute of Chartered Accountants of India
ii
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Edition : July, 2017
Website : www.icai.org
E-mail : [email protected]
Committee/ : Board of Studies
Department
ISBN No. :
Price : 300/- (For All Modules)
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© The Institute of Chartered Accountants of India
CONTENTS
MODULE – 1 Chapter 1 – Introduction to Cost and Management Accounting
Chapter 2 – Material Cost
Chapter 3 – Employee Cost and Direct Expenses
Chapter 4 – Overheads: Absorption Costing Method
Chapter 5 – Activity Based Costing
Chapter 6 – Cost Sheet
Chapter 7 – Cost Accounting System
MODULE – 2Chapter 8 – Unit & Batch Costing
Chapter 9 – Job Costing and Contract Costing
Chapter 10 – Process & Operation Costing
Chapter 11 – Joint Products & By Products
Chapter 12 – Service Costing
Chapter 13 – Standard Costing
Chapter 14 – Marginal Costing
Chapter 15 – Budget and Budgetary Control
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DETAILED CONTENTS : MODULE-2
Pages
CHAPTER 8 – UNIT& BATCH COSTING8.1 Introduction......................................................................................................................... 8.28.2 Unit Costing ........................................................................................................................ 8.38.3 Cost Collection Procedure in Unit Costing.............................................................. 8.38.4 Batch Costing ...................................................................................................................... 8.78.5 Costing Procedure in Batch Costing .......................................................................... 8.78.6 Economic Batch Quantity (EBQ) .................................................................................. 8.98.7 Difference between Job and Batch Costing .......................................................... 8.13
Summary .............................................................................................................................. 8.13Test Your Knowledge ....................................................................................................... 8.14Answers/ Solutions ........................................................................................................... 8.17
CHAPTER 9 – JOB AND CONTRACT COSTING METHOD9.1 Job Costing .......................................................................................................................... 9.29.2 Job Cost Card/ Sheet ....................................................................................................... 9.29.3 Collection of costs for a Job ......................................................................................... 9.39.4 Accounting of Costs for a Job ...................................................................................... 9.69.5 Contract Costing ............................................................................................................... 9.119.6 Recording of Contract Costs ......................................................................................... 9.129.7 Meaning of Terms used in Contract Costing .......................................................... 9.149.8 Cost Plus Contract ............................................................................................................ 9.16
Summary .............................................................................................................................. 9.24Test Your Knowledge ....................................................................................................... 9.24Answers/ Solutions ........................................................................................................... 9.29
CHAPTER 10 – PROCESS & OPERATION COSTING 10.1 Meaning of Process Costing ......................................................................................... 10.210.2 Costing Procedure in Process Costing ...................................................................... 10.210.3 Treatment of Normal and Abnormal Loss and Abnormal Gain ..................... 10.5
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10.4 Valuation of Work- in- Process .................................................................................... 10.1310.5 Steps in Process Costing ................................................................................................ 10.1510.6 Process Costing Methods .............................................................................................. 10.1610.7 Inter- Process Profits ........................................................................................................ 10.1910.8 Operation Costing ............................................................................................................ 10.22
Summary .............................................................................................................................. 10.22Test Your Knowledge ....................................................................................................... 10.23Answers/ Solutions ........................................................................................................... 10.27
CHAPTER 11 – JOINT PRODUCTS & BY PRODUCTS11.1 Meaning of Joint and By Products ............................................................................. 11.211.2 Apportionment of Joint Costs ...................................................................................... 11.311.3 Methods of Apportionment of Joint Cost to Joint Products ........................... 11.311.4 Methods of Apportionment of Joint Costs to By Products .............................. 11.1111.5 Treatment of By Products Cost in Cost Accounting............................................. 11.12
Summary .............................................................................................................................. 11.13Test Your Knowledge ....................................................................................................... 11.14Answers/ Solutions ........................................................................................................... 11.17
CHAPTER 12 – SERVICE COSTING12.1 Introduction ....................................................................................................................... 12.212.2 Service Cost Unit ............................................................................................................... 12.312.3 Statement of Cost for Service Sectors ...................................................................... 12.612.4 Costing of Transport Services....................................................................................... 12.712.5 Costing for Hotels and Lodges .................................................................................... 12.1412.6 Costing for Hospitals ....................................................................................................... 12.1812.7 Costing for IT & ITES........................................................................................................ 12.2112.8 Costing for Toll Roads ..................................................................................................... 12.2412.9 Costing for Educational Institutions .......................................................................... 12.28
12.10 Costing for Insurance Companies .............................................................................. 12.2912.11 Costing for Financial Institutions ................................................................................ 12.3112.12 Other Services-costing for Power Houses ............................................................... 12.33
Summary .............................................................................................................................. 12.35
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Test Your Knowledge ....................................................................................................... 12.35Answers/ Solutions ........................................................................................................... 12.38
CHAPTER 13 – STANDARD COSTING 13.1 Introduction ....................................................................................................................... 13.213.2 Types of Standards ........................................................................................................... 13.413.3 The Process of Standard Costing ................................................................................ 13.513.4 Setting-up of Standard Cost ......................................................................................... 13.513.5 Types of Variances ............................................................................................................ 13.1013.6 Classification of Variances .............................................................................................. 13.1013.7 Computation of Variances ............................................................................................ 13.1113.8 Advantages and Criticism of Standard Costing ..................................................... 13.29
Summary .............................................................................................................................. 13.31Test Your Knowledge ....................................................................................................... 13.33Answers/ Solutions ........................................................................................................... 13.38
CHAPTER 14 – MARGINAL COSTING 14.1 Introduction......................................................................................................................... 14.214.2 Characteristics of Marginal Costing ........................................................................... 14.414.3 Facts about Marginal Costing ...................................................................................... 14.514.4 Determination of Cost and Profit under Marginal Costing .............................. 14.614.5 Distinction Between Marginal and Absorption Costing .................................... 14.714.6 Advantages and Limitations of Marginal Costing ................................................ 14.1414.7 Cost-Volume-Profit (CVP) Analysis ............................................................................. 14.1514.8 Methods of Break-Even Analysis ................................................................................ 14.1814.9 Limitations of Break-Even Analysis ............................................................................ 14.28
14.10 Margin of Safety ................................................................................................................ 14.2814.11 Variations of Basic Marginal Cost Equation and Other Formulae .................. 14.3014.12 Angle of Incidence ............................................................................................................ 14.3214.13 Application of CVP Analysis in Decision Making .................................................. 14.33
Summary .............................................................................................................................. 14.42Test Your Knowledge ....................................................................................................... 14.43Answers/ Solutions ........................................................................................................... 14.49
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CHAPTER 15 – BUDGET AND BUDGETARY CONTROL15.1 Introduction......................................................................................................................... 15.215.2 Essentials of Budget ......................................................................................................... 15.215.3 Characteristics of Budget ............................................................................................... 15.315.4 Objectives in Budgeting ................................................................................................. 15.315.5 Meaning of Budgetary Control .................................................................................... 15.515.6 Preparation of Budget ..................................................................................................... 15.915.7 Types of Budget ................................................................................................................. 15.1115.8 Zero- Based Budgeting (ZBB) ....................................................................................... 15.4415.9 Performance Budgeting (PB) ........................................................................................ 15.47
15.10 Budget Ratios ..................................................................................................................... 15.50Summary .............................................................................................................................. 15.53Test Your Knowledge ....................................................................................................... 15.54Answers/ Solutions ........................................................................................................... 15.59
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