Iqra University
Karachi
Cost Accounting
Section code:
Course Study Guide
Academic Year 2017
Faculty of Management Science
Cost Accounting
1. INTRODUCTION
To provide the students with a detailed knowledge of Cost Accounting, to enable them to:
use the present and traditional approaches of cost accounting in different contexts, and
apply the cost and management accounting techniques, and evaluate the desired results in
the light of the outcomes
Course Facilitator:
Muhammad Nadeem Khan [email protected]
(Assistant Professor) Extension: 3709
RECOMMENDED TEXT BOOKS
Matz, A., & Usry, M.F. Cost Accounting: Planning and Control (7th Ed. & 14th Ed.)
Colin Drury, Management and Cost Accounting (6th edition), Cengage Learning
Horngren, C.T., Datar, S.M. & Rajan, M., Cost Accounting, (14th Ed.)
2 . ASSESSMENT
While the course is taught using predominantly a classroom lecture/discussion format, group
learning activities are strongly encouraged. Students are expected to ask for assistance through
Office hours, Students are expected to take an active part in the learning process through
participation in classroom/group discussion. Students will be expected to enhance the knowledge
learned in the text by further reading, solving practical problems in forms of exercises and by
analyzing actual corporate annual reports. Assignments, quizzes, exams and the final project relate
the knowledge of Cost accounting principles and concepts to problem solving.
WEIGHTING SCALE:
Component Percent of Total
Final 50%
Midterm 30%
Quizzes 10%
Assignments/Report 10%
Total 100%
ASSIGNMENT POLICY:
Students unable to submit an assignment by the due date should discuss the matter in advance with
the teacher. At the teacher’s discretion, late assignments may not be accepted.
Quizzes:
Total 4 quizzes will be taken and best 3 will be selected mean (N-1) Policy, but all unannounced.
Project: Students are required to submit their project in the last class (that is, the class before the
final exam). Students are allowed to work as a group (4 Members). DO NOT plagiarize. I want
original work. Your 5 minute self explanatory presentations should be in PowerPoint. However, you
will be required to present. Your project documentation must be at least 16 pages (12 Times New
Cost Accounting
Roman, 1.5 spacing, reference pages, table of contents, titles, sub-titles, etc). You will submit your
project report hard copy and soft copy of your slide presentation and project report
Guest Speaker Session: A 2.5/3.0 -hour guest speaker session on any other current issue of the Cost
Accounting, will be arranged before the FINAL TERM examination. This is a compulsory session
for all the students of this module because final examination will include questions from these
topics.
3. EVALUATION PRINCIPAL AND PRACTICE
Exams consist of a combination of multiple choice questions, short answer questions, problems
requiring calculations, and other types of questions similar to examples demonstrated and discussed
in class, illustrated in the textbook or gleaned through assigned study and learning activities. Exams
will cover material in the textbook as well as discussions, lectures and demonstrations from class.
4. STUDYING PRINCIPLES AND PRACTICE
The methodology for this course encompasses assigned readings, lectures, discussion, and problem
solving. Cost Accounting is an applied field and is difficult to understand without practicing the
applications. Therefore, students are expected to bring the assigned text and a calculator to each
class. Students are also expected to read the relevant chapter and to attempt to solve practice
problems prior to each class. Lectures will be used to highlight key concepts. Example problems
will be solved and discussed in class to apply these concepts, and you will have many opportunities
to self-quiz your mastery of the material. It should be noted that your active ongoing participation in
class and diligent preparation of the practice problems are crucial to effective learning of the
material and to the development of effective problem-solving skills in this field.
To get the most out of classes you will need to do preparatory readings. This may include a handout,
scholarly journal articles, and research papers. You should endeavor to learn also from ‘further
readings’. In regular lecture sessions, you will be expected to take part in discussions, presentations,
etc.
Cost Accounting
Course Outline
Week Topic Suggested
Readings/Activities
Financial Statements: The Basis for Planning and Control
1. The Reporting Function Chapter 2
Financial statement Analysis
The flow of Cost
Planning & Control Models, Cost and Profit Analysis
Exercises, Problems &Cases
2. Chapter 2
Costs: Concepts, Uses and Classification, and 1st quiz
3. The Concept “Cost” Chapter 3
Classification of Cost
Uses of Cost data
Cost Data: Importance of Past, Present and future
The Cost Accounting System: Design and Operation
4. Fundamental of Cost Accounting Information System Chapter 4
Chart of Accounts
The Manufacturing Cost
Accounting Cycle
The factory ledger
Job Order Costing
5. Cost Systems: Actual or Standard Chapter 5
Cost accumulation process: job order or process
Job order cost Accumulation Procedures
Process Costing: Cost of Production Report
6. Characteristics and Procedures of Process costing Chapter 6
Costing by department
Product flow
Procedures for Materials, Labor and Factory Overhead Costs
The cost of Production Report
Process Costing: Average and FIFO Costing
7. Increase in unit cost due to Addition of Materials Chapter 7
Increase in unit and change in unit cost due to addition of Materials
Beginning work in process inventories
8. Exercises, Problems & 2nd quiz
MID TERM EXAM
Controlling and Costing of Materials
9. Material Costing Methods Chapter 12
Cost of Material in inventory at the end of a period
Costing procedures for Scrap, Spoiled goods, and Defective work.
Cost Accounting
Quantitative Models for the Materials Planning and Control
10. Planning Materials Requirements Chapter 13
Material control
Controlling and Accounting for Labor
11. Basis for labor cost control Chapter 14
Productivity and efficiency measurement and labor cost
Procedures for labor costing
Computerized labor procedures
Incentive Wage Plans
Wage incentive time
Accounting for Labor –Related Costs
12. Overtime earnings Chapter 15
Bonus payments
Vacation pay
Labor related deductions
Recording Labor cost
Factory Overhead; Planned, Applied, and Actual
13. FOH-Predetermined Chapter 9
FOH-Actual
FOH-Applied
Over and under applied
Factory Overhead: Departmentalization
14. The concept of departmentalization Chapter 10
Producing and service Department
Direct departmental expenses in Producing and service department
Indirect departmental expenses
Establishing departmental Overhead rates
Use of Departmental Factory Overhead Rates
Actual factory overhead departmentalized
Over or under factory overhead
Revision and comprehensive quiz
15.
Final Exam
OUTLINE OF SESSIONS AND PREPARATORY READINGS
Session 1:
Financial Statements: The Basis for Planning and Control
Key reading:
Matz, A., & Usry, M.F. Cost Accounting: Planning and Control (7th Ed.), chapter 2
Further readings:
Brewer, P., Garrison, R. H., & Noreen, E., W. Managerial Accounting (10th Ed.). McGraw
Hill, chapter 1
Cost Accounting
Colin Drury , Management and Cost Accounting (6th edition) . Cengage Learning, chapter 1
Session 2:
Financial Statements: The Basis for Planning and Control- Exercises, Problems &Cases
Key reading:
Matz, A., & Usry, M.F. Cost Accounting: Planning and Control (7th Ed.), chapter 2
Further readings:
Charles T. Horngren, Srikant M datar,George Foster , Cost accounting (12th
edition),Prentice Hall Of India Pvt ltd ,Chapter 1
Kishore, M., Ravi ,Cost accounting, Chapter 1& 2
http://www.accountingformanagement.com/cost_classification_on_financial_statements.
html
Session 3:
Costs: Concepts, Uses and Classification
Key reading:
Matz, A., & Usry, M.F. Cost Accounting: Planning and Control (7th Ed.), Chapter 3
Further readings:
Brewer, P., Garrison, R. H., & Noreen, E., W. Managerial Accounting (10th Ed.).
McGraw Hill, Chapter 2.
Colin Drury ,Management and Cost Accounting (6th edition), Cengage Learning ,Chapter
2
Manash Dutta, Cost accounting :Principles & Practice , Chapter 1
Vanderbeck , Principles of Cost Accounting (13 edition),Thomson, Chapter 1
http://www.accountingformanagement.com/cost_terms_concepts_and_classifications.htm
l
http://www.accountingformanagement.com/Manufacturing_and_nonmanufacturing_cost.
html
Session 4:
The Cost Accounting System: Design and Operation
Key reading:
Matz, A., & Usry, M.F. Cost Accounting: Planning and Control (7th Ed.), chapter 4
http://www.accountingformanagement.com/variable_cost_and_fixed_cost.html
Cost Accounting
Session 5:
Job Order Costing
Key reading:
Matz, A., & Usry, M.F. Cost Accounting: Planning and Control (7th Ed.), Chapter 5
Further readings:
Guan.Hansen.Mowen, ,Cost Management , Chapter 5
Ravi M. Kishore ,Cost and management Accounting ,Chapter 5
Colin Drury ,Management and Cost Accounting (6th edition), Cengage Learning ,Chapter 4
Charles T. Horngren, Srikant M datar,George Foster , Cost accounting (12th edition),Prentice
Hall Of India Pvt ltd Chapter 4
http://www.accountingformanagement.com/job_order_costing_advantages_disadvantages.ht
ml
http://www.accountingformanagement.com/job_order_costing_exercises.html
Session 6:
Process Costing: Cost of Production Report
Key reading:
Matz, A., & Usry , M.F. Cost Accounting: Planning and Control (7th Ed.),Chapter 6
Further readings:
Charles T. Horngren, Srikant M datar,George Foster ,Cost Accounting,(12th edition),Prentice
Hall Of India Pvt ltd ,Chapter 4
Guan.Hansen. Mowen, Cost management, Cengage learning, Chapter 6
Manash Dutta ,Cost accounting :Principles & Practice, Chapter 9
Colin Drury , Management and Cost Accounting (6th edition), Cengage Learning ,Chapter 5
Vanderbeck ,Principles of Cost Accounting(13 edition),Thomson, Chapter 5
http://www.accountingformanagement.com/cost_of_production_report.html
Session7:
Process Costing: Average and FIFO Costing
Key reading:
Matz, A., & Usry, M.F. Cost Accounting: Planning and Control (7th Ed.),chapter 7
Further readings:
Colin Drury, Management and Cost Accounting (6TH edition), Cengage Learning ,Chapter 5
Vanderbeck, Principles of Cost Accounting, (13 edition),Thomson, Chapter 5
Guan. Hansen. Mowen ,Cost Management ,Cengage Learning, Chapter 6
http://www.accountingformanagement.com/process_costing_system_case_study.html
MID TERM
Session 8:
Cost Accounting
Exercises & Problems
Key reading:
Matz, A., & Usry, M.F. Cost Accounting: Planning and Control (7th Ed.),chapter 6& 7
Further readings:
By Charles T. Horngren /George Foster & Srikant M. Datar, Cost Accounting A Managerial
Emphasis(12 edition),Prentice Hall of India Pvt Ltd, Chapter 4
http://www.accountingformanagement.com/process_costing_system_exercises_problems.htm
l
Session 9:
Controlling and Costing of Materials
Key reading:
Matz, A., & Usry, M.F. Cost Accounting: Planning and Control (7th Ed.),chapter 12
Further readings:
Vanderbeck, Principles of Cost Accounting, (13 edition),Thomson, Chapter 2
Ravi M. Kishore, Cost and management Accounting, Chapter 2
Manash Dutta, Cost accounting :Principles & Practice, Chapter 2
http://www.accountingformanagement.com/controlling_and_costing_materials.html
Session 10
Quantitative Models for the Materials Planning and Control
Key reading:
Matz, A., & Usry, M.F. Cost Accounting: Planning and Control (7th Ed.),chapter 13
Further readings:
Vanderbeck, Principles of Cost Accounting, (13 edition),Thomson, Chapter 2
Ravi M. Kishore ,Cost and management Accounting , Chapter 2
Manash Dutta ,Cost accounting :Principles & Practice ,Chapter 2
http://www.accountingformanagement.com/materials_and_inventory_cost_control.html
Session 11:
Controlling and Accounting for Labor
Key reading:
Matz, A., & Usry, M.F. Cost Accounting: Planning and Control (7th Ed.),chapter 14
Further readings:
Ravi M. Kishore, Cost and management Accounting, Chapter 3
Manash Dutta, Cost accounting :Principles & Practice, Chapter 3,.
Vanderbeck, Principles of Cost Accounting, (13 edition),Thomson ,Chapter 3
Cost Accounting
Session 12:
Accounting for Labor –Related Costs
Key reading:
Matz, A., & Usry, M.F. Cost Accounting: Planning and Control (7th Ed.),chapter 15
Further readings:
Ravi M. Kishore ,Cost and management Accounting, Chapter 3
Manash Dutta ,Cost accounting :Principles & Practice, Chapter 3,
Vanderbeck ,Principles of Cost Accounting (13 edition),Thomson Chapter 3
Session 13:
Factory Overhead; Planned, Applied, and Actual
Key reading:
Matz, A., & Usry, M.F. Cost Accounting: Planning and Control (7th Ed.), chapter 9
Further readings:
Ravi M. Kishore ,Cost and Management Accounting, Chapter 4
Manash Dutta ,Cost accounting :Principles & Practice, Chapter 4
Vanderbeck, Principles of Cost Accounting(13 edition),Thomson, Chapter 4
http://www.accountingformanagement.com/procedure_for_materials_labor_foh_process_cos
ting.html
Session 14:
Factory Overhead: Departmentalization
Key reading:
Matz, A., & Usry, M.F. Cost Accounting: Planning and Control (7th Ed.), Chapter 10
Further readings:
Ravi M. Kishore ,Cost and management Accounting ,Chapter 4
Manash Dutta ,Cost accounting :Principles & Practice, Chapter 4
Vanderbeck ,Principles of Cost Accounting(13 edition),Thomson, Chapter 4
Session 15: Exercises & Problems, & Revision
FINAL EXAM
GOOD LUCK
