Cost Accounting
Learn how to determine the cost of products and services, control costs, and provide detailed cost information for management decisions.
Course overview
Cost accounting is the process of recording, classifying, analysing and allocating costs to determine the cost of products or services. It helps management in cost control, pricing decisions, and performance evaluation.
- Understand cost concepts, classification, and the cost sheet
- Account for material, labour, and overhead costs
- Apply different methods of costing (job, batch, contract, process, etc.)
- Use absorption and marginal costing techniques
- Apply standard costing and variance analysis
- Prepare budgets and use budgetary control
- Reconcile cost and financial accounts
- Learn modern techniques: ABC, target costing, life-cycle costing
Course chapters
Follow the chapters in order for the best learning experience.
Introduction to Cost Accounting
Understand the meaning, objectives, advantages, and limitations of cost accounting.
Cost Concepts and Classification
Learn different types of costs and how they are classified for decision making.
Cost Sheet
Prepare a cost sheet showing prime cost, works cost, cost of production, and total cost.
Material Costing
Learn purchase, storage, issue of materials, and methods of pricing material issues.
Labour Costing
Understand labour cost control, time keeping, wage systems, and labour turnover.
Overhead Costing
Classify, collect, and control manufacturing, administrative, and selling overheads.
Overhead Allocation & Apportionment
Allocate and apportion overheads to cost centres and absorb them into products.
Methods of Costing
Get an overview of different costing methods and when each is suitable.
Job Costing
Determine the cost of specific jobs or orders using job cost sheets.
Batch Costing
Calculate cost per unit when goods are produced in batches of similar items.
Contract Costing
Account for long-term contracts including work certified, retention money, and profit recognition.
Process Costing
Calculate cost of production in continuous processes including normal and abnormal losses.
Operating Costing
Determine the cost of providing services such as transport, power, and hospitals.
Service Costing
Apply costing techniques to service industries and internal service departments.
Departmental Costing
Ascertain costs department-wise and prepare departmental cost statements.
Unit and Output Costing
Calculate cost per unit for industries producing a single homogeneous product.
Absorption Costing
Absorb all manufacturing costs (fixed and variable) into the cost of the product.
Marginal Costing
Use contribution and variable costs for short-term decision making.
Activity-Based Costing
Allocate overheads more accurately using activities and cost drivers.
Standard Costing
Set standard costs and compare them with actual costs for control.
Variance Analysis
Calculate and analyse material, labour, and overhead variances.
Budgetary Control
Prepare budgets and use them as a tool for planning and control.
Reconciliation of Cost & Financial Accounts
Reconcile the profit shown by cost accounts with the profit shown by financial accounts.
Integrated Accounting System
Maintain a single set of accounts that serves both cost and financial purposes.
Cost Control and Cost Reduction
Distinguish between cost control and cost reduction and learn techniques for both.
Target Costing
Set target costs based on market price and desired profit, then design to meet the target.
Life Cycle Costing
Consider all costs from product development to disposal over the entire life cycle.
Uniform Costing
Apply the same costing principles and practices across similar organisations.
Inter-Firm Comparison
Compare performance and costs of different firms in the same industry.
Cost Audit
Understand the purpose, scope, and procedure of cost audit.
Recommended learning approach
Start with the basic concepts and cost sheet, then move to elements of cost, methods of costing, techniques, and finally modern approaches.