Cost Accounting plays a vital role in commerce education, providing essential knowledge for students to understand cost management in businesses. This book, Cost Accounting – Semester II, is designed to meet the academic needs of F.Y. B.Com students. It covers both theoretical and practical aspects, making complex concepts easy to grasp.
The syllabus is divided into six units, each focusing on a specific area of cost accounting:
Unit 1: Introduction to Cost Accounting This unit explains the meaning, objectives, importance, and limitations of cost accounting. It also covers key concepts like cost, expenses, loss, costing, cost unit, and cost centre, along with factors to consider for installing a cost accounting system.
Unit 2: Elements of Cost Students will learn about the three main elements of cost: material, labour, and overheads. The unit emphasizes the classification and principles of overheads, providing clarity on how costs are categorized and managed.
Unit 3: Preparation of Cost Sheet This unit focuses on the preparation of cost sheets to determine the total cost and profit of products or services. It covers the meaning, nature, advantages, and practical problems related to cost sheets.
Unit 4: Material Cost The fourth unit delves into material classification, purchasing methods, and procedures for storage and issuance. It also covers handling material losses such as wastage, scrap, and spoilage, and explains methods of material costing like FIFO, LIFO, and average methods.
Unit 5: Labour Cost This unit introduces the concept of labour and wages, including labour classification and wage payment methods like time rate and piece rate systems (Halsey and Rowan plans), helping students understand labour cost management.
Unit 6: Overheads Cost The final unit explains overhead costs, covering allocation, apportionment, and distribution of overheads. It also discusses re-apportionment of service department costs, which is crucial in cost management.
We trust that both students and educators will find this book immensely beneficial. While every effort has been made to ensure accuracy and clarity, we acknowledge the possibility of inadvertent errors. We extend our heartfelt gratitude to our families for their unwavering support and encouragement throughout this endeavor.