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Course Objectives The course aims at developing a deep and comprehensive understanding of cost and managerial concepts and systems and their practical applications.
Course outlines
Cost accounting introduction Elements of cost * materials, labor and Overhead Costing systems * job cost, contract costing Costing methods and techniques * marginal, absorption and standard cost
Course outlines
Decision making * Cost behavior. * CVP analysis. * Times series analysis. * Limiting factor. * Relevant costing. * Decision making under uncertainty * Pricing.
Course outlines
Performance measurement * measurement of productivity * measurement of profitability and quality * monetary and non- monetary measures Budgeting
Cost classification
(1) Functional analysis of cost * manufacturing cost * administrating cost * selling cost * distribution cost * research cost
Cost classification
The use of functional classification * to produce financial statements * for cost unit calculation * for stock valuation * to implement cost control
Cost classification
(2) Direct and Indirect cost, Prime and Overhead. Direct cost: expenditure which can be directly identified and linked with a specific cost unit or cost centre. Indirect cost: expenditure which can not directly identified and linked with a specific cost unit or cost centre.
Cost classification
Prime Cost: is the aggregate of direct materials cost, direct labor cost, and direct expense.
Overhead cost: is the aggregate of indirect materials cost, indirect labor cost, and indirect expense.
Cost classification
(3) Product cost, and period cost. * product cost is the cost included in stock valuation. * period costs are those costs charged in the profit and loss account for the period and excluded from the stock valuation and calculation of gross profit
Cost classification
(4) Fixed cost and variable cost Fixed costs are costs which are not affected in total by the level of activity. Variable costs are costs which change in total in direct proportion to the level of activity. (5) Avoidable and Unavoidable. (6) Controllable and non controllable.
Cost classification
(7) Other analysis of costs * Cost unit: is a unit of product or service in relation to which costs are ascertained. * Cost centre: is a production or service location, function, activity or item of equipment for which costs can be ascertained. Responsible for cost only. * Revenue centre: is a centre devoted to the raising of revenue, with no responsibility for costs.
Cost classification
Profit centre: is a production or service location, function or activity for which costs and revenue can be ascertained, with responsibility for cost and revenue
Prime cost
Production overhead
Production cost
Administration cost Selling cost Total cost
Example
The following information related to the cost of final product for CTC company. SDG Direct material 10 Direct 29 Direct expenses 3 Factory expenses variable 7 fixed 5 Non- manufacturing costs- variable 2 fixed 4 60 Profit is 33% of total cost
Example
Required 1- what is the final selling price 2- what is variable cost 3- what is the total cost 4- what is the prime cost
1- 80 2- 51 3- 60 4-42