Friday, July 19, 2013

ICMAI - Intermediate New Syllabus - Paper 10: Cost and Management Accountancy

Section A: Cost & Management Accounting – Methods & Techniques (50 marks)

1. Cost Accounting Methods and Systems
(a) Necessity and importance of cost accounting, what management expects of cost accounting, cost department organization and relationship with other departments, installation of a costing system and modification thereof; planning and progressing of accounting, design of forms and records

(b) Accounting entries for an integrated accounting system- cost ledgers; Reconciliation between cost and Financial profit and loss account; Integrated and non-integrated accounting and reporting

(c) Job, batch, contract costing, process costing (including establishment of equivalent units in stock, work-in – progress and abnormal loss accounts and use of various methods like first-in-first out), operation costing, operating costing, unit costing, multiple costing, by-product and joint products

2. Decision Making Tools (advanced level)
(a) Marginal Costing : basic concepts; break even analysis and cost-volume-profit analysis; break-even charts and profit charts; differential cost analysis; stock valuation under marginal costing techniques versus absorption costing techniques; applications of marginal costing in decision making

(b) Throughput Accounting (TA) – as a system of profit reporting and stock valuation

(c) Activity-Based Costing (ABC) for profit reporting and stock valuation

(d) Integration of Standard Costing with Marginal Cost Accounting, Absorption Cost Accounting and Throughput Accounting

(e) Transfer Pricing – determination of inter-departmental or inter-company transfer price

(f) Treatment of special expenses in costs such as – research and development expenses, preliminary expenses, rectification expenses, costs of obsolescence, etc.

(g) Accounting and control of waste, scrap, spoilage, defective, etc

3. Budgeting and Budgetary Control
(a) Budget Concepts and Budget Preparation

(b) Fixed and Flexible Budgets

(c) Fixed, variable, semi-variable and activity-based categorizations of cost and their application in projecting financial results

(d) Zero Base Budgeting (ZBB)

(e) Budgetary Control

4. Standard Costing
(a) Concept and uses; accounting – methods and reconciliation – stock valuation

(b) Variance Analysis: Cost, Profit and Sales Variances – presentation of variances, investigation of variances, revision of standards

(c) Reporting – requisites of reports – interpretation and uses for Managerial decision-making activities
(d) Uniform Costing and Inter-firm comparison

Section B: Cost Records and Cost Audit (20 marks)

5. Cost Accounting Records and Cost Audit
(a) Cost Accounting Records and Cost Audit under Companies Act, 1956

(b) Nature and scope of Cost Audit

(c) Cost Compliance Reports – by Cost Accountants

(d) Companies (Cost Accounting Record) Rules, 2011 and Companies (Cost Audit Report) Rules,2011

Section C: Economics for Managerial Decision-making (30 marks)

6. Economics for Managerial Decision-Making
(a) Concepts of Markets, analysis of market demand and empirical estimation of demand

(b) Government Intervention and effect

(c) Business and economic forecasting

(d) Empirical production function and cost analysis

(e) Factor demand and input decisions


(f) Pricing Policies