ACC431 - Cost Accounting
In this paper, the student is required to focus on the major theme of internal accounting paying more heed to cost accounting. There are several aims of the paper yet the students has to concentrate on the following ones primarily
The prerequisites and objectives of the need of accounting information by managers
The contrast between product costs and period costs
The revelation of the key cost elements involved in the establishment of a product
The development of schedule of cost of manufactured goods
The identification of documents used in a job order cost system
The details of flow of costs in a manufacturing process using T accounts
The development of cost of production reports including equivalent unit calculations through different methods
The working of manufacturing overhead to products under different costing situations
The categorisation of costs/expenses by their behaviour
The analysis of mixed costs using the High-Low and the least Squares methods
The verification of volume, price, break-even before and after taxes for single products
The attesting of inventory values and income under the direct costing
Accounting 431 deals with internal accounting, specifically cost accounting. Its objectives are to determine product costs for inventory valuations. The associated accounting systems include methods of identifying, separating, classifying and summarizing costs under various product costing techniques. The subject also includes the managerial use of cost information for planning and cost control. Cost Accounting is an extension of financial accounting. Its aim is to provide relevant information to various levels of management for planning and controlling day-to-day operations. The internal accounting system must be designed to meet the requirements of specific managerial needs.
Upon successful completion of this subject the student will be able to:
1. Describe the purpose and usefulness for which the manager needs accounting information.
2. Distinguish between product costs and period costs. Identify the basic cost elements involved in the manufacturing of a product and prepare a schedule of cost of goods manufactured.
3. Demonstrate the flow of costs in a manufacturing process using T accounts.
4. Identify all documents used in a job order cost system; prepare journal entries for all transactions of a manufacturing process; and compute predetermined overhead rates.
5. Prepare cost of production reports including equivalent unit calculations, costing of normal and abnormal spoilage under the AVERAGE and the FIFO method.
6. Allocate manufacturing overhead to products using activity based costing.
7. Classify costs/expenses by their behaviour and analyse mixed costs using the High-Low and the least Squares methods.
8. Determine the volume, price, break-even before and after taxes for single products and sales mix using the contribution margin approach.
9. Determine the inventory values and income under the direct costing and the full absorption costing methods and reconcile the differences.
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