INTERNATIONAL ISLAMIC UNIVERSITY, ISLAMABAD

FACULTY OF MANAGEMENT SCIENCES (Department of Accounting & Finance)

TITLE OF DEGREE PROGRAM

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BBA Program 3 Compulsory Principles of Accounting (ACT-201) Semester 3 Cost Accounting (ACT 301)

DEFINATION OF CREDIT HOURS : DEGREE PLAN: PREREQUISITES: COURSE OFFERED: COURSE TTLE:

Course Objectives and Outcomes: 1. To provide the students with an appropriate knowledge of Cost Accounting 2. To apply cost methods and techniques for preparing and presenting information for decision-making and cost control, and 3. To prepare standard costs and variances 4. To understand cost concepts, objectives, scope, cost flow and classification 5. To prepare cost of production report and cost statement under process cost accounting system and job order costing system, respectively 6. To understand and explain material, labor, factory overhead costing and control 7. To calculate and interpret material, labor, overheads variances. How Program Content Meets The Program Objectives? Cost information are one of the most important input to good decision making. Understanding of different cost concepts, cost elements, cost flow and cost accumulation enables the students to base their decisions on objective information. Text Books: ESSENTIAL TEXT: Cost Accounting: by F. Usry, H. Hammer & Adolph Matz T. Lucy 7th Edition FMS, IIUI

therefore. Projects Quizzes Final Topics Covered 1. • Oral reports and other student presentations. Failure to attend these classes will therefore result in zero in that particular assignment. 2. Average and FIFO Costing 6.Lectures: The medium of instruction will be English. 3. There will be no makeup quiz. IIUI 20% 20% 10% 50% . midterm or final for any reason whatsoever. Students unable to submit an assignment on the due date should discuss the matter in advance with the professor. the professor will apply a late penalty. • Power Point Presentations. All in-class assignments must be completed in-class. • Guests Speaker. Instructional methods will vary with each instructor. 2. Where late assignments are accepted. Course Assessment Midterm exam Assignments. Lost Unit Calculations. 3. Students are responsible for keeping track of these dates. Success in this course is based heavily on in-class participation and assignments. At the professor’s discretion. Factory Overhead Costing and Control FMS. • Web based assignments and activities General Rules and Procedures 1. However. late assignments may not be accepted. they cannot be made up with a take-home. 4. Test dates and assignment due dates are announced in class. • Group Activities. 5. Concepts and Scope of Cost Accounting Financial Statements: The Bases for Planning and Control The Cost Accounting Systems: Design and Operation Job Order Costing Process Costing: Cost of Production Report. attendance and active in-class participation is essential to a student’s success. some suggested techniques are • Quizzes and other tests with feedback and discussions. Addition of Materials. • Problem Solving • Lectures and class discussions.

Job Order Cost Accumulation Procedures. Costing department and its relationship with other departments. Statement of cost of goods manufactured and sold. Role of cost accounting in a management information system. The Flow of Costs. Chart of Accounts. Controllable and uncontrollable cost. Control System. IIUI . Cost accounting v/s financial accounting. Costs and Expenses Week Week 1 Topics Concepts and Scope of Cost Accounting Definition and concept of cost. Chapter 4 The Manufacturing Cost Accounting Cycle. Cost object. Sources and uses of cost data. Material Costing and Control 8. Practice Questions Week 3 Week 4 Week 5 FMS. Standard Costing 11. General and Cost Accounting Principles and Practices Cost Classification and Flows Direct and indirect cost. Marginal Costing and Break-even Analysis 12. Labor Costing and Control 9. Cost Chapter 5 Accumulation. Cost elements. Suggested Reading Chapter 1 Week 2 Financial Statements: The Bases for Planning Chapter 2 and Control The Reporting Function. Fixed and Chapter 3 variable cost. The Cost Accounting Systems: Design and Operation Fundamentals of a Cost Accounting Information System. Semi-variable and step fixed cost Cost flow.7. Budgeting: Profits. Uses of cost data. Sales. Product and period cost. The Factory Ledger Job Order Costing Cost Systems: Actual or Standard. Procedures: Job order of Process. Absorption Costing and Variable Costing 10. Financial Statement in the Annual Report. Data Processing by Means of the Journal Voucher.

Overtime and idle time. Predetermined overhead applied rate. Labor turnover rate. Material Costing and Control Procedure of material procurement. Straight piece rate and differential piece rate. LIFO and weighted average for material valuation and the pricing for material issue. service department costs. Stock taking and perpetual inventory. safety stock and maximum stock. Economic order quantity. over and under applied factory overhead and its disposal. Departmentalization of overhead. Costing by Departments. Effect of quantity discount on EOQ.Week 6 Process Costing: Cost of Production Report. Time sheet and job cards. Difficulties Encountered in Process Cost Accounting Procedures Factory Overhead Costing and Control Chapter 6 Classification and collection of overhead. Product Flow. Labor and Factory Overhead Costs The Cost of Production Report Process Costing: Addition of Materials. ABC Control Chapter 7 Week 7 Week 9 Week 10 Week 11 Labor Costing and Control Direct and indirect labor. IIUI Week 12 . Remuneration methods. Productivity and Chapter 8 efficiency. The use of FIFO. Procedures for materials. Allocation. Increase in Unit Cost and Change in Unit Cost due to Addition of Materials. Reorder level. Use of variable costing. Group bonus. repeated distribution and algebraic method for reciprocal. Absorption Costing and Variable Costing Treatment of period and product costs. FMS. Two-bin system. Beginning Work in Process Inventories. Average Chapter 6 and FIFO Costing Increase in Unit Cost due to Addition of Materials. Factory overhead cost: planned applied and actual. Principle Chapter 9 guiding the treatment. apportionment and reapportionment of overhead costs. Chapter 6 Lost Unit Calculations Characteristics and Procedures of Process Costing. Payroll. Incentive wage plan. Treatment of differences between physical and book stock.

Practice questions Week 13 Standard Costing Preparation of standard cost. Margin of safety ratio (M/S ratio). Break-even in units and value. Contribution margin to sales ratio (C/S ratio). IIUI . Marginal Costing and Break-even Analysis Chapter 11 Marginal cost and contribution margin. Costs and Expenses Profit Planning. The complete periodic Budget Presentations. Sales. Revision & Practice Session Week 14 Week 15 Week 16 Chapter 12 FMS. Fixed overhead budget and volume variances. Break-even graph Budgeting: Profits. Variable overhead expenditure and efficiency variances. Material price and Chapter 10 usage variances. Labor rate and efficiency variances. Principle of Budgeting.