Discipline Specific Core Course- 4.2 (DSC-4.
2): Cost Accounting
Course Credits Credit distribution of the course Eligibility Pre-
title Lecture Tutorial Practical/ criteria requisite
& of the
Code Practice course
(if any)
DSC-4.2: 4 3 1 0 Pass in Class NIL
Cost XII with
Accounting Mathematics/
Accountancy
Learning Objectives:
The course aims to develop understanding among learners about contemporary cost concepts and
rational approach towards cost systems and cost ascertainment. The course also aims to provide
knowledge about various methods of cost determination under specific situations and to acquire
the ability to use information determined through cost accounting for decision making purposes.
Learning Outcomes:
After completion of the course, learners will be able to:
1. Understand and analyse the different cost concepts.
2. Analyse various components of cost of production.
3. Compute unit cost and total cost by preparing a cost statement.
4. Compute employee cost, employee productivity and employee turnover.
5. Determine cost for different industries using job costing, process costing, contract costing
and service costing.
SYLLABUS OF DSC-4.2
Unit 1: Introduction (11 hours)
Meaning, scope, objectives and advantages of cost accounting; Difference between financial
and cost accounting. Cost concepts and classifications, Overview of elements of cost and
preparation of Cost Sheet for manufacturing sector. Role of a cost accountant in an
organisation. Cost Accounting Standards (CAS – 4 on Cost of Production / Acquisition /
Supply of Goods / Provision of Services) and (CAS – 22 on Manufacturing Cost) as amended
from time to time.
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Unit 2: Elements of Cost: Material and Employee Cost (9 hours)
(a) Materials: Accounting and control of purchases, storage and issue of materials.
Techniques of inventory control, Periodic and perpetual systems of maintaining
inventory records, an overview of methods of pricing of materials issues — FIFO, LIFO
and Weighted Average price method, Valuation of materials as per CAS – 6 on Material
Cost, Accounting treatment of losses— Wastage, scrap, spoilage and defectives
(b) Employee (Labour) Cost: Accounting and Control of employee cost. Time-keeping and
time-booking. Employee turnover: meaning, methods of measurement and accounting
treatment. Concept and treatment of idle time and overtime. Methods of wage payment
and Incentive schemes- Halsey, Rowan, Taylor’s differential piece wage.
Unit 3: Elements of Cost: Overheads (9 hours)
Classification, allocation, apportionment and absorption of overheads, Under and over-
absorption of overheads; Capacity Levels and Costs; Treatments of certain items in costing
like interest and financing charges, packing expenses, bad debts, research and development
costs.
Unit 4: Methods of Costing (9 hours)
Job costing, Contract costing, Process costing (including process losses, valuation of work-
in-progress). Service costing (only transport)
Unit 5: Cost Accounting Book-Keeping Systems (7 hours)
An overview of integral and non-integral systems; Reconciliation of cost accounting profit
with financial profits.
Notes :
1. Treatment of various items of cost should be as per the relevant cost
Accounting Standards (CAS) issued by Institute of Cost Accountant of India.
2. Use of spreadsheet software should be encouraged for the basic calculation.
Exercises:
The learners are required to:
1. Prepare a cost statement for manufacturing and/ or service organisation.
2. Identify the items to be included and excluded in the material and labour costs.
3. Visit a factory and analyse different elements of overhead costs.
4. Visit industries to understand process costing and prepare a cost statement for any
Process industry.
5. Suggest a suitable cost system for different types of services organisation.
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Suggested Readings:
● Arora, M.N. (2021). Cost Accounting-principles and practice.Delhi, India: Vikas
Publishing House.
● Goel, R. K., & Goel, I. (2019). Concept Building Approach to Cost Accounting for
B.Com (Hons.)/B.Com.. Delhi, India: Cengage Publications.
● Gupta, S., Reeta, & Prabhakar, R. R. (2021).Cost Accounting for B.Com. Delhi, India: Sultan
Chand.
● Maheshwari, S. N., & Mittal, S. N. (2020). Cost Accounting. Theory and Problems. Delhi,
India: Shri Mahaveer Book Depot.
● Maheshwari, S. N., Mittal S. K. & Mittal, S.N. (2021). Cost Accounting: Principles &
Practice, Delhi, India: Shree Mahaveer Book.
● Mitra, J. K. (2021). Cost and Management Accounting. Delhi, India: Oxford University
Press.
● Nigam, B. M. L. & Jain, I. C. (2023). Cost Accounting: Principles and Practice. Delhi,
India: PHI Learning.
● Singh, S. (2019). Fundamentals of Cost Accounting. Allahabad, India: Kitab Mahal.
● Tulsian, P.C. (2020). Cost Accounting. Delhi, India: S.Chand.
Additional Resources:
● Drury, C. (2018). Management and Cost Accounting. China: Cengage.
● Horngren, C. T., Foster, G. & Dattar, S. M. (2017).Cost Accounting: A Managerial Emphasis.
Delhi, India: Prentice Hall of India Ltd.
● Jain, S.P. & Narang, K.L. (2021). Cost Accounting: Principles and Methods. Jalandhar,
India: Kalyani Publishers.
Note: Suggested readings will be updated by the Department of Commerce and uploaded
on the Department's website.
