Intro to Cost Accounting

1. INTRODUCTION TO COST
ACCOUNTING
MODULE 1

2. DIFFERENT PARTS OF ACCOUNTING :
• Financial Accounting – P & L Account, Balance Sheet and
Cash flow Statement
• Cost Accounting – Historical and Present Date to make
future estimates
• Management Accounting – Decision making, Planning and
Controlling

3. OBJECTIVES AND FUNCTIONS OF COST
ACCOUNTING :
1. Ascertainment of Cost
2. Cost Control and cost reduction
3. Guide to business policy
4. Determination of selling price

4. ADVANTAGES OF COST ACCOUNTING TO
MANAGEMENT :
1. Reveals profitable and unprofitable activities
2. Helps in Cost Control :
3. Helps in decision making
4. Guides in fixing selling prices
5. Helps in inventory Control :
6. Aids in formulating policies :
7. Helps in cost Reduction :
8. Reveals idle capacity:
9. Checks the accuracy of financial accounts
10.Prevents frauds and manipulation:

5. IMPORTANT TERMS :
• Cost
• Expense
• Loss
• Cost Unit
• Cost Object
• Cost Centre and their types

6. METHODS OF COSTING :
• Job Costing
• Batch Costing
• Contract or Terminal Costing
• Unit/Single/Output Costing
• Process Costing
• Operation Costing
• Operating Costing
• Departmental Costing
• Multiple Costing

7. TECHNIQUES OF COSTING :
• Standard Costing
• Budgetary Control
• Marginal Costing
• Total Absorption Costing
• Uniform Costing

8. DIFFERENCE BETWEEN COST ACCOUNTING
AND FINANCIAL ACCOUNTING :
• Purpose
• Statutory Requirements
• Analysis of Cost and Profit
• Period of Reporting
• Control aspect
• Types of Costs
• Format of presenting information
• Types of transactions recorded
• Final or End user