Professional Documents
Culture Documents
Evaluation Criteria
End Term Examination: 60 marks Mid Term Examination: 40 marks Total: 100 marks
Text Books
Cost Accounting A Managerial Approach by Horngren, Datar, Foster, Rajan, Ittner Costing Accounting by M N Arora Costing Accounting by Dutta Management Accounting by M A Sahaf
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Objective 1
Distinguish between financial accounting and management accounting.
Primary Users
Financial Investors Creditors Government authorities Management Internal managers of the business
Purpose of Information
Financial Help investors, creditors, and others make investment, credit, and other decisions Management Help managers plan and control business operations
Type of Report
Financial Management Financial Internal reports statements not restricted by restricted by IAS; determined Indian by cost-benefit Accounting analysis Standards (IAS)
Verification
Financial Annual independent audit by Chartered Accountants Management No independent audit
Scope of Information
Financial Management Summary Detailed reports reports primarily on parts of the on the company company as a whole
Behavioral Implications
Financial Concern about adequacy of disclosure Management Concern about how reports will affect employees behavior
Objective 2
Value Chain
Design
Production or Purchases
Marketing
Distribution
Customer Services
Objective 3
Objective 4
Distinguish among full product costs, inventoriable product costs, and period costs.
Product Costs
What are product costs? They are the costs to produce (or purchase) tangible products intended for sale.
Product Costs
There are two types of product costs:
Full product costs Inventoriable product costs
External Reporting
Period costs
Manufacturing Overhead
Inventory
Materials Inventory
deduct
Manufacturing Company Example Kendall Manufacturing Companys beginning finished goods inventory was $60,000 and its ending finished goods inventory was $55,000. How much is the cost of goods sold?
Beg. finished goods inventory + Cost of goods manufactured = Cost of goods available for sale Ending finished goods = Cost of goods sold
Manufacturing Company Example Kendall Manufacturing Company had sales of $627,000 for the period. How much is the gross margin?
Sales Cost of goods sold = Gross margin $627,000 327,000 $300,000
Manufacturing Company Example Kendall Manufacturing Company had operating expenses as follows:
$80,000 Sales salaries 10,000 Delivery expense 30,000 Administrative expenses $120,000 Total What is Kendalls operating income?
Objective 6
Identify major trends in the business environment, and use cost-benefit analysis to make business decisions.
Objective 7
Confidentiality
Objectivity