Description

Advanced Cost Accounting

MCOM Semester III

Syllabus

1. Process Costing
A. Introduction – Features of Process, Concept of Process Loss, Abnormal Loss, Normal Loss, Abnormal Gain
B. Computation of Inter Process Profit – Advantages and Disadvantages
C. Computation of Equivalent Production – Weighted Average and FIFO

2. Cost Allocation and Activity Based Costing Systems
A. Cost Allocation – Meaning and its Types, Relationship between Resources, Activities, Cost and Cost Drivers, Methods of allocating central costs – cost allocation using Direct Method, Step Down Method and Reciprocal Method
B. Activity Based Costing – Introduction, Advantages, Limitations, Identification of Cost Drivers, Practical Problems on Traditional v/s Activity Based Costing System

3. Responsibility Accounting
A. Responsibility Accounting – Meaning, Features, Objective, Assumptions, Problems, Responsibility Centres – Cost, Profit, Revenue and Investment
B. Concept of Controllability – Introduction, Measuring Managerial Performance (ROI and Residual Income Approach)
C. Preparation of Managerial Reports using Segmented Costs and Controllable Costs Approach

4. Strategic Cost Management
A. Transfer Pricing – Introduction, Advantages and Disadvantages, Setting Transfer Pricing – Negotiated Transfer Pricing, Cost Based Transfer Pricing
B. Target Costing – Introduction, Concept, Objectives, Comparison between Target Costing and Cost Plus Pricing
C. Inflation Accounting – Meaning, Features, Conversion of Income Statement, Balance Sheet, Stocks and Net Assets Block using Current Purchasing Power Method