CORE-3: COST ACCOUNTING

UNIT-1
1. Generally, there are three branches of accounting. These are
a. Financial Accounting
b. Cost Accounting
c. Management Accounting
2. What are the main objectives of Financial Accounting?
The main objectives of Financial Accounting are
a. To know correct profit or loss
b. To know correct financial position
3. What is Cost Accounting?
Cost Accounting is the second branch of accounting which gives cost information to the
management.
4. What are the objectives of Cost Accounting?
The objectives of Cost Accounting are
a) Cost Determination
b) Cost control and Cost reduction
5. Normally, there are three elements of cost.
a) Material
b) Labour
c) Expenses
6. Cost = Material Cost + Labour Cost + Expenses
Cost = DMC + IMC + DLC+ ILC + DE +IE
Cost = DMC + DLC + DE + IMC + ILC+ IE
Cost = Prime Cost + Overhead
7. Format of Cost Sheet or Statement of Cost

Cost Sheet
for the period ……..
Particulars Amt Amt
Direct Material ***
Direct Labour ***
Direct Expenses ***
PRIME COST ***
(+) Factory Overhead/Production/Manufacturing ***
FACTORY COST ***
(+) Office Overhead ***
COST OF PRODUCTION ***
(+) Selling and Distribution Overhead ***
(+) Research and Development Overhead ***
TOTAL COST ***
(+) Profit ***
SELLING PRICE ***

13,600
1,19,900

18,460
1,38,360
 34,590
1,72,950

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