Level of Knowledge : Working knowledge.
Objectives . . .
- To gain understanding of costing concepts and the detailed procedure and documentation involved in cost ascertainment systems.
- To gain understanding of the various basic concepts of decision-making process in financial management.
Contents . . .
Section - A: Cost Accounting [60 Marks]
- Objectives, Importance and Advantages of Cost Accounting, cost concepts; Types of costing; Installation of a costing system; Essentials of a good Cost Accounting system; Difference between Cost Accounting and Financial Accounting; Elements of cost; Cost unit, Cost centre and Profit centre.
- Cost ascertainment:
- Material accounting:
- Procurement procedures; Store procedures and Documentation in respect of receipts, Issues of stock, Stock verification.
- Inventory control; Conventional techniques such as fixing of minimum/maximum and re-order levels.
- Valuation of receipts, issues of inventories.
- Consumption; Identification with products of cost centers; Basis for consumption entries in financial ac-counts; Monitoring consumption.
- Employee-related cost:
- Attendance and Payroll procedures; Overview of statutory requirements; Overtime and incentives.
- Utilisation of labour; classification into direct and indirect as demanded by circumstances of the unit identifying with cost centers; labour booking procedures; identifying labour hours with work-orders or batches or capital jobs or overhead work-orders; absorption rates.
- Efficiency rating procedures.
- Direct expenses:
Sub-contracting; Control on material movements; identification with the main product or ser-vices; Documentation requirements.
- Functional analysis; Factory Administration, Selling, Distribution, Research and development. Behavioural analysis; Fixed, Variable, Semi-variable.
- Factory overheads; Primary allocation to all cost centers; Secondary allocation of service/utility cost centersto production cost centers; Criteria for choosing suitable basis for allotment; Activity-based cost allocations; Capacity cost adjustments; Fixed absorption rates for absorbing overheads to products or services.
- Administration overheads; Activity analysis for control; Method of allocation to cost centers or products.
- Selling and distribution overheads; Analysis and absorption of the expenses in products/customers; Impact of marketing strategies; Cost effectiveness of various methods of sales promotion; Segment-wise/customer-wise/region-wise cost analysis.
- Methods of costing: Job/Contract costing system; Process costing system; operating costing system.
- Cost accounts systems, Cost control accounts (non-integrated accounts), Reconciliation of cost and financial accounts.
- General introduction to Cost Accounting records and rules (industry-wise details are not expected).
- Cost system installation and operation; Structuring the organisation into cost/activity centers; criteria and purpose.
- Product cost sheets:
- Valuation of work-in-progress; Procedures in Job order method and in Process costing.
- Profitability statements; Product-wise/ segment-wise/ customer-wise profitability.
- Uniform costing and inter-firm comparison.
- Cost Reduction.
- Suchitra Prakashan Pvt. Ltd.
- Cost Accounting for C A
- Mahavir Publications
- Cost Accounting (Problem and Theory)
- Academic Publisher (Calcutta)
- Cost Accounting (Methods & Problems)
- A. H. Wheeler publisher
- Principles and Practices of Cost Accounting
Other Relevant Books
Section - B: Financial Management [40 Marks]
- Meaning, Importance and Objectives of Financial Management; Time value of money; Conflicts in profit versus value maximisation principle; Functions of chief financial officer.
- Tools of Financial Analysis and Planning; Ratio Analysis to evaluate performance and financial health; Application of ratio analysis in financial decision-making; Analysis of cash flow and Funds Flow statements.
- Management of working capital; Cash and Marketable securities management; Treasury management, Receivables management, Inventory management, Financing of working capital.
- Investment decisions: Capital budgeting; Techniques for evaluation like payback method, accounting rate of return, Internal rate of return, Net present value and Profitability index - simple problems; Relationship between risk and re-turn.
- Financing decisions: Cost of capital; Cost of different sources of finance, Weighted average cost of capital, Marginal cost of capital; Concepts of operating and financial leverage; Capital structure patterns; Designing optimum capital structure; Constraints; Various capital structure theories; Different sources of finance: Long, medium, and Short-term finance.
- Prentice Hall of India Pvt. Ltd., New Delhi
- Financial Management and Policy
- Sultan Chand & Sons
- Management Accounting & Financial Analysis
- Tata McGraw Hill Publishing Co. Ltd.
- Financial Management Text & Problems
- Tata McGraw Hill Book Co.
- Financial Management Theory and Practice
- Chaitanya Publishing House
- Financial Management An Analytical and Conceptual Approach
- Vikas Publishing House Pvt. Ltd.
- Financial Management
- Galgotia Publiishing Company ()New Delhi)
- Principles of Financial Management
Other Relevant Books