Cost & Management

Accounting
Basics of Cost Accounting,
Elements of Cost,Budgetary
Control, Ratio Analysis

Instructions
You all are required to refer a
good text book for explanation
of key points mentioned in next
slides.

Contd
Objectives of Cost Accounting?
Difference between Cost
Accounting and Financial
Accounting?
Cost Unit, Cost Center?

Contd
Relationship between Cost
Accounting and Financial Accounting?
Relationship between cost
accounting and Management
Accounting?
Advantages of Cost Accounting?

Elements of Cost

Classification of Cost

Marginal Costing
Differential Costing
Opportunity Cost
Replacement Cost
Relevant Cost
Imputed Cost
Sunk Cost
Normal Cost/Abnormal Cost

Contd

Avoidable Cost/Unavoidable Cost

Uniform cost
Engineered Cost
Out-of-Pocket cost
Managed Cost
Controllable and Uncontrollable Cost
Common Cost

Cost Sheet??

Contd
Historical Vs. Estimated Cost Sheet?
Components of Cost Sheet?

Importance of Cost Sheet

Cost Ascertainment
Fixation of Selling Price
Help in Cost Control
Facilitates Managerial Decisions

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Budgeting: Preparation of
budgets and budgetary control

Budget

Budgeting

Objectives of Budgeting
are..??

Budgetary Control

Budgetary Control

Forecast and Budget

Objectives of Budgetary Control

Advantages of Budgetary Control

Maximization of Profits

Effective coordination

Evaluation of Executive Performance ( on the basis of goals

set for each department)

Clear cut goals and targets

Economy in operations

Correction of Performance continuously

Introduction of Incentive schemes of remuneration

Shutting down of unprofitable products and activities

Limitations of Budgetary Control

Prediction of uncertain future

Changes of conditions

Complacence/Self-Guarded

Difficulty in coordination

Conflict among different departments

Installation of a Budgetary
Control System??

Types of Budgets

Introduction to Ratio
Analysis

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Liquidity Ratios

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Leverage Ratios

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Activity Ratios

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Profitability Ratios

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Enjoy Reading and

Learning..