Advanced cost Accounting

 5Q. Methods of inventory control 6Q. Classification of Labour 7Q. Methods of Remuneration 8Q. Overheads 5Q. Methods of inventory control           Material control aims at eliminating and minimizing all kinds of wastes and losses while the materials are being purchased, stored, handled, issued/ consumed. A number of techniques are used in planning, procuring, and holding stages of material which help in exercising and effecting material cost control. Methods: 1. Just in time 2. stock turnover 3. perpetual inventory 4. periodic inventory 5. ABC analysis 6. economic order quantity( EOQ) 1. Just in time:  JIT is a system of inventory management with an approach to having zero inventories in stores. According to this approach, the material should only be purchased when it is actually required for production.  JIT is based on two principles  (i) Produce goods only when it is required and  (ii) the products should be delivered to customers at the time only when they want.          It is al

 SYNOPSIS: ELEMENTS OF COST ( THEORY & PROBLEMS IN COST SHEET) MATERIAL PURCHASE PROCEDURE STORAGE OF MATERIALS ( INCLUDING PROBLEMS) METHODS OF INVENTORY CONTROL METHODS OF PRICING OF ISSUES ( INCLUDING PROBLEMS) LABOUR- CLASSIFICATION & ACCOUNTING FOR LABOUR COST METHODS OF REMUNERATION ( INCLUDING PROBLEMS) OVERHEADS-MEANING, CLASSIFICATION, ALLOCATION, APPORTIONMENT AND ABSORPTION ( INCLUDING PROBLEMS) Introduction:   Cost : Cost is the amount incurred for the production and distribution of the product. It does not include income tax, interest on capital, preliminary expenses, dividends, goodwill, bad debts etc.   Cost Accounting : Recording of cost-related information. Costing : Costing is the method or technique with the help of which cost can be ascertained. Definition: Cost accounting is defined as a system of recording in accounts the materials used and labour employed in the manufacture of a certain commodity/ on a particular job. Objectives : Ascertainment of cost D

           Batch costing is a method of costing which is used in industries where production is carried out in batches. It is generally applied in pharmaceutical industries, snack food industries, toys manufacturing industries, spare parts manufacturing industries.  Meaning : Batch costing is a type of specific order costing where articles are manufactured in predetermined lots, known as batch. This method is used to ascertain cost & profit of specific batch/ units in specific batch.  Features : Each batch is treated as a cost unit All costs are accumulated & ascertained for each batch A separate batch cost sheet is used for each batch & is assigned a certain number by which the batch is identified  The cost per unit is ascertained by dividing the total cost of a batch by a number of items produced in that batch.  Economic batch quantity:   Economic batch quantity (EBQ)refers to the optimum quantity batch which should be produced at a point of time so that the set up &

Remuneration methods: 1. Time rate 2. Piece rate 3. Combination of time and piece rate 4. premium bonus schemes 5. group bonus schemes 1. Time-based (Time Rate System)  Straight Time Rate System: Under this system, the workers are paid on a time basis i.e. hour, day, week, or month. The amount of wages due to a worker are arrived at by multiplying the time worked (including the normal idle period) by the rate for the time. Time-based wages payment is suitable for employees (i) whose services cannot be directly or tangibly measured, e.g., general helpers, supervisory and clerical staff, etc. (ii) engaged in highly skilled jobs, (iii) where the pace of output is independent of the operator, e.g., automatic chemical plants. Wages under the time rate system are calculated as under:               Wages = Time Worked (Hours/ Days/ Months) × Rate for the time   2. Output Based (Piece Rate System)  I) Straight Piece Rate System: Under this system, each operation, job, or unit of