Bahria University

(Islamabad Campus)

Department of Management Sciences

Course Title:

Cost Accounting
CATALOGUE DESCRIPTION
Course Code:
Credit Hours:
Semester:
Instructor:

ACC-210
Prerequisites: ACC-160
Three (3)
Class: BBA
rd
3 Semester Section: A, C and D
Rabia Sharif

COURSE DESCRIPTION
This course is designed to develop students knowledge about cost accounting based on the
classification of cost, cost behavior and cost accounting tools to plan and control. Course is
designed to make the students familiar with the application of basic methods and techniques of
cost accounting. The course deals with the cost concepts, cost classification and cost flows,
material, labour, factory overhead costing. Students are made to understand the Cost
accumulation procedure, job order costing, process costing and cost accounting cycle.

COURSE OBJECTIVES
To provide the students with an appropriate knowledge of Cost Accounting to enable them to.
Apply cost methods and techniques for preparing and presenting information for planning
and cost control.
Improving efficiency by controlling and reducing costs.

COURSE OUTCOMES
On completion of this course, students should be able to:
Understand cost concepts, objectives, scope, cost flow and classification.
Prepare cost of production report and cost statement under process cost accounting
system and job order costing system respectively.
Understand and explain material, labour, factory overhead costing and control.
Distinguish between the meaning of a joint product and a by- product
Describe the acceptable methods of accounting for by-product in the determination of the
cost of the joint products.

TEXT BOOKS (S) AND REFERENCES

Cost Accounting Planning and Control, By Matz and Usry (7th edition)

FOR REFERENCES:

Cost Accounting, By T-Lucy.

Cost Accounting, By Charles T. Horngren.

ASSESSMENT EVALUATION

Assignments/Project 20%
Quizzes/Tests
15%
Midterm Exam
25%

Bahria University
(Islamabad Campus)

Final Exam

Department of Management Sciences

40%

COURSE CONTENTS

Introduction, classification and types

Management reporting
Materials
Material control
Labor control
Factory Overheads control
Job order costing
Process costing
Joint and by-Product
Departmentalization

SYLLABUS BREAKDOWN IN LECTURES

(WEEKLY COURSE OUTLINE)
WEEK - 1
INTRODUCTION
Field of Accounting.
Introduction to Cost Accounting.
Planning and control-Objectives of cost accounting.
Classification of Cost.
Flow of cost in manufacturing organizations.

WEEK 2 & 3
MANAGEMENT REPORTING
Cost of Goods Sold Statement.
Income Statement.
Balance Sheet.
Problems solutions.

WEEK 4
COSTING PROCEDURES (JOB ORDER COSTING)
Introduction to costing procedures and systems.
Job order costing, the job order cost sheet.
Costing of Material, Labour and FOH in Job order Costing.
Jobs Completion and sale of products.
Problems Solution.

WEEK 5
COST ACCOUNING CYCLE

Bahria University
(Islamabad Campus)

Department of Management Sciences

Accounting treatment of Cost Accounting Cycle.

Problems Solution.

WEEK 6 & 7
PROCESS COSTING
Introduction to Process Costing.
The Cost of Production Report.
Treatment of losses (normal and abnormal loss).
Increase in number of units.

WEEK - 8
Joint and By-Product
Distinguish between joint products and by-products.
Identify the split off point in a joint cost situation
Method of costing by-products.
Allocation of Joint costs using four different methods.
Problems Solution.

WEEK 9
Mid Term Exam

WEEK 10,11 & 12

MATERIALS CONTROLS
Procedures for materials procurement, Internal Control Regarding Purchasing, Receiving
and Issuance of Materials.
Inventory costing methods-FIFO, LIFO and Average Costing.
Inventory Valuation at Lower of Cost and Market Price.
Quantitative models for materials, Economic Order Quantity (EOQ), Re-order Level,
Maximum and Minimum Limit, Danger Level.
Accounting treatment of scrap, Wastage, Spoilage and defective work

WEEK 13 & 14
LABOUR CONTROL
Productivity and efficiency measurement and Labour Cost.
Incentive Wage Plans, types of Incentive Wage Plans.
Taylor differential piece rate plan, the Halsey premium plan etc.
Overtime earnings and bonus payments.
Recording of payroll and deductions on payroll.
Problems Solution.

WEEK 15
FACTORY OVERHEAD CONTROLS

Bahria University
(Islamabad Campus)

Department of Management Sciences

The nature of Factory Overhead.

The use of predetermined factory overhead rate.
Factors to be considered in selecting the basis for overhead rate.
The calculation of a factory overhead rate.
Actual vs. Applied factory overhead.

WEEK - 16
FACTORY OVERHEAD CONTROLS (VARIANCE ANALYSIS)
Overall variance (under applied and over applied FOH).
Variance analysis.
Spending variance.
Idle capacity variance.
Problems Solution.

WEEK - 17

DEPARTMENTALIZATION
Introduction to Producing and service departments.
Direct departmental expenses, indirect departmental expenses.
Allocation of expenses.
Distributing service department costs.
Algebraic method.
Calculation of factory overhead rate.
Department wide and plant wide.
Problems Solution.

WEEK - 18
Final Term Exam