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..