Every Firm incurs so many costs which are directly or indirectly related to their Business. But when all the companies incur the same costs, then how few companies can easily track their exact expenses, profits, do forecasting and more which so many other companies can’t?
It’s because companies hire a cost accountant which do the recording and maintaining the cost. Some Companies take this work very lightly which is actually not. Cost Accountant work is to record all the costs of the Business in a manner which can be used to improve Management. The same which you will learn from our Cost Accounting Notes for B.COM, BBA and MBA Students.
Our Cost Accounting Notes are designed for all the Management Students whether you are a B.COM 2nd Year Student, BBA Student or MBA 1st Year Student.
Don’t believe? Ok, Then, Check the Topics of our cost accounting notes.
Cost Accounting Notes Topics
- Cost Accounting- Meaning, Definition, Objectives
- Advantages and Disadvantages of Cost Accounting
- Difference between Cost Accounting and Financial Accounting.
- Methods and Techniques of Cost Accounting
- Installation of a Costing System, Difficulties in Installing Cost Accounting System
- Cost Units and Cost Centers,
- Elements and Classification of Cost,
- Cost Sheet and Components of Total Cost.
- Material Control– Meaning, Need, Purchasing and Function of Purchase Department,
- Purchase Procedure, Stores Control: Minimum Level, Maximum Level, Safety Level,
- EOQ, Material Records, Stores Ledger, Perpetual Inventory System, Continuous Stock Taking.
- Labour Cost, Wage Payment System– Time Wage System and Piece Rate System.
- Premium and Bonus Plans, Marginal Costing: Meaning, Characteristics, Merits and Limitations.
- Overheads: Introduction, Classification
- Codification of Overheads
- Source of Collection, Departmentalization,
- Allocation and Apportionment of Overheads
- Job and Batch Costing, Process Costing.
- Contract Costing- Reconciliation of Cost and Financial Accounts.
- Cost Audit and Cost Reduction.
So, these are the Topics you will get in our Cost Accounting Study Notes.
If you feel any TOPIC MISSING, then you can email us at email@example.com, We will add that surely.
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These Notes are prepared according to the Popular Management Colleges of India.
Still, not sure about the Quality of our Notes?? Then, Let’s have a Short Intro about Cost Accounting.
Introduction to Cost Accounting Lecture Notes
Cost Accounting is a type of process in which we capture and ascertain the cost at each level of production. In Simple words, Cost Accounting is the process of classification, summarization, interpretation of all the expenses incurred in the production process.
According To ICMA London, “Cost Accounting is the establishment of budgets and fix the standards, compare the actual and standard cost, find out the deviations and the profitability”
Objectives of Cost Accounting
- Systematic Record of Expenses- The Main objective of cost accounting is to record the costs in a systematic way so that it will help every department of the organization.
- Information regarding Each Product- Cost Accounting states the complete Information about the cost of each product from raw material to finished goods.
- Determination of the Selling Price- Having a proper record of all the costs for producing the product and passing through all the stages helps in the determination of the selling cost in which the cost accountant adds the amount of profit.
- Cost Control- Having a Proper Record of all the costs helps in prioritizing the costs which are more important to the costs than the irrelevant costs. This helps in controlling the irrelevant costs.
- Reduce the Costs- Having the Cost of different stages of the product helps in reducing the costs and increasing the profits.
- Ascertain the Profit of Each Activity- Cost Accounting helps in knowing the profit of each activity of production from raw material to finished goods.
Advantages of Cost Accounting
- Helps in cost control by identifying the irrelevant costs.
- Helps in decision making to come to a budget for the expenses.
- Ascertain the profitable and unprofitable operations.
- Helps in finding out the ideal capacity of the business.
- Guides in Price Fixation by knowing each activity costs after adding the profit.
- The system is more complex because it involves every activity costs which is not easy to manage.
- It is not suitable for small scale units because of not incurring so many costs.
- It is expensive because having a record of all the costs with doing audits, preparing cost sheets and hiring a specialized cost accountant is not affordable for all the companies.
- Not useful for determining tax liability.
- Based on the estimation.
- Lack of social accounting.
Essentials of Good Costing System
- The costing system should be practical.
- The system must not be over elaborated which results in the burden.
- The printed form should be provided and all the instructions should be written in the printed form.
- The accounting Schemes should be arranged in a manner so that the results of two sets of accounts should be reconciled with each other.
- The existing structure must be disturbed as little as possible.
- The system must be introduced gradually so that all employees can also get training over a period of time. Launching a system gradually helps in moving out for those people who don’t easily move from a new system from the existing one.
- The Installation and Operating Cost of the system shouldn’t exceed the value of the management.
Now I hope you have understood the quality of our Cost Accounting PDF Notes for BBA, B.COM 2nd Year, and MBA 1st Year Students. So, get the Cost Accounting Notes by clicking on the button below-