Sem8

Course Objectives:
a. To discuss the fundamentals of the costing system.
b. To discuss the process of costing for different industries.
c. To illustrate the cost accounting methods
d. To demonstrate the techniques of costing in cost control and cost reduction areas. 

Course Outcomes:
On completion of the course, students will be able to
a. Demonstrate the fundamentals of the Costing System.
b. Apply the costing methods based on the type of industry.
c. Apply the different Cost accounting methods as per requirement.
d. Demonstrate his acquired skills in Cost Control and Cost Reduction

Unit 1
Cost and Cost Estimation
Concept of cost, cost unit, cost center, classification of cost, elements of cost, Definition of costing, desirable conditions for a costing system. Cost sheet. Cost Estimating: Definition, purpose and functions of estimation, the estimator's role, constituents of estimates, and estimating procedures.

Unit 2
Estimation of Weight and Material Cost Process of breaking down product drawing into simpler elements or shapes, estimating the volume, weight and cost. Purchasing procedure, Inventory Valuation by LIFO, FIFO, Weighted average method.

Unit 3
Estimation of various costs
Estimation of fabrication, foundry, forging and machining cost Constitutes, direct cost, indirect cost, Procedure of cost estimation for each type. Machine hour rate:
Definition, constituents, direct cost, indirect cost, steps for estimating machine hour rate for conventional machines, CNC lathe and machining centre.

Unit 4
Overheads : Elements of overheads, classification, general considerations for collection, analysis
of overheads, different methods for allocation, apportionment, and absorption of
overheads.

Unit 5
Cost Accounting Methods
Job costing, Batch costing, Unit costing, Process costing, Contract costing, Activitybased costing.

Unit 6
Cost Control
Budget and budgetary control, standard cost, variance analysis, Cost Reduction Areas: Value analysis and Value engineering, Zero Base Budgeting, Cost Volume Profit Analysis, Profit volume ratio. 

The suggested list of Tutorials and Assignments:
Note: Use of computers is essential for at least one exercise.
1. Estimating weight and material cost for an assembly of three to five components.
2. Valuation of inventory by LIFO, FIFO, and Weighted average method
3. Estimating machine hour rate for representative machines – one conventional
machine and one CNC lathe or machining centre.
4. Case study on estimation of overheads for a manufacturing unit
5. Study of different methods for allocation, apportionment, and absorption of overheads
6. A case study in any one industry using any of the methods of costing.
7. Different examples illustrating cost control
8. Case studies of cost reduction
General Instructions:
Note: Numerical treatment on units 1, 2, 3, 4 and 5 is essential.

Text Books:
7. Principles & Practice of Cost Accounting – N. K. Prasad (Book Syndicate Pvt. Ltd.)
8. A Text Book of Estimating and Costing Mechanical – J.S. Charaya & G. S. Narang (Satya
Prakashan)
9. Practical Problems in Cost Accounting- S. P.Jain and K. L Narang, Kalyani publishes
New Delhi
Reference Books:
1. Cost Accounting- S. P.Jain and K. L Narang, Kalyani publishes New Delhi
2. Principles and Practices of Costing - Lal and Nigam, Himalaya publishing house.
3. Cost Management: Ravi M Kishore, Taxmann Publications
4. Costing Simplified: Wheldom Series – Brown &Owier (ELBS)
5. Cost Accounting: B. Jawaharlal (TMH)