ICMAB

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302. Advanced Cost Accounting             100

Course Objectives : To provide the students with an in-depth knowledge of advanced approaches of Cost Accounting to enable them to apply costing methods and techniques to assist management  for taking appropriate decisions. On completion of this course they will be able to:

a.  demonstrate costing methods and techniques appropriate to a variety of different businesses.

b.  explain the role of standard costing within organizations and prepare and interpret standard costs and variance statements.

c.  explain target costing, quality costing, service costing, operation costing and its accounting system and control.

 

302.01 Process Costing - Weighted - Average and FIFO

Weighted - Average process Costing; FIFO Process Costing; Materials Issued at Various Stages; Process Costing with Multiple Departments; Journal Entries for Process Costing; Impact of Flexible Manufacturing and JIT on Process Costing.

 

302.02 Process Costing - Addition of Materials, Spoilage and Defective Units

Addition of Materials; Accounting for Spoilage; Abnormal Gain; Accounting for Rework; Reworked in a Separate Process; Accounting for Scrap Material and Waste.

 

302.03 Joint Product and By-Product Costing 

Joint Products, By-Products and Scrap; Split-off Point; Joint Costs and Common Costs; Assigning Joint Costs to Joint Products; Accounting for By-Products; Decision Making for Further Processing.

 

302.04 Standard Costing

i.          General Concept of Standard Costing: Standard Cost Defined; Standard Costing; Advantages of Standard Cost Systems; Types of Standards; Consideration in Establishing Standard; 

 

ii.         Standard Costing For Material and Labour: Setting Material Standards; Setting Labour Standards; Material Variances Using Job Order Costing - Material Price Variances, Material Quantity Variance, Journal Entries for Materials Variance, JIT and Material Variance Analysis; Labour Variances Using Job Order Costing - Labour Rate Variance, Labour Efficiency Variance, Labour Efficiency Under JIT, Journal Entries for Labour Variances; Material and Labour Variances using Process Costing; Mix and Yield Variances.

iii.        Standard Costing For Overhead : Flexible Budgets and Standard Overhead Rates; Overhead Variance Methods; Journal Entries for Overhead Variances.

iv.        Other Topics : Investigation of Variances; Disposition of Variance; Monitoring Efficiency and Volume Variances to Prevent Excess Inventory; Causes of and Responsibility for Variances; Standard Costs in the New Manufacturing Environment.

v.             Describes current innovations in costing systems and explains the conditions under which these would be appropriate.

 

 

302.05   Target Costing, Theory of Constraints, Life Cycle Costing and Strategic Cost Management

Target Costing, Value Engineering, Target Costing and Kaizen Costing; Theory of Constraints: Identifying and Exploiting Constraints, Throughput, Steps in Theory of Constraints Analysis; Life Cycle Costing; Strategic Cost Management; Creating and Sustaining a Competitive Advantage; Value-Chain Framework, Linkage, and Activities, Value Chain Analysis.

 

302.06 Quality Costing: Measurement and Control

Measuring the Costs of Quality; Reporting Quality Cost Information; Using Quality Cost Information; Controlling Quality Costs.

 

302.07 Marketing Cost Analysis

Objectives of Marketing Cost Accounting; ABC System for Marketing Costs; Standard for Marketing Costs; ABC Drives for Marketing Activities; Variance Analysis. Expense Variance Report, Efficiency Variance and Price Variance.

 

302.08 Cost Control for Discretionary Costs

Cost Control Systems; Committed vs. Discretionary Costs; Benefits from Discretionary Cost Incurrence; Measuring Efficiency and Effectiveness of Discretionary Costs; Controlling Discretionary Costs.

 

302.09 Service Costing

Meaning of Service Costing; Transport Costing; Power Costing; Canteen Costing; Hospital Costing; Educational Institute.

 

302.10 Operation Costing, Back-flush Costing and Project Control.

Text Books  

1.         Cost Accounting – L. Gayle Rayburn (6th edition).

2.         Cost Management – Hansen & Mowen (4th edition).

Reference Books

1.         Cost Accounting – Shane Moriarity and Carl P. Allen (3rd edition)

2.         Cost Management – Blocher, Chen and Lin (1st edition) – 1999.

3.         Cost Accounting – C.T. Horngren (11th edition)

4.         Cost Accounting – Barfield, Raiborn and Kimmy (3rd edition)

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