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Cost and Management Accounting

Semester 3 · 18 topics in 6 units

Past question papers for Cost and Management Accounting

Foundations 7 topics

  1. Cost accounting: meaning, objectives, classification of costs and installing a costing systemWhat cost, costing and cost accounting mean, the objectives of cost accounting, how it differs from financial accounting, the elements and classification of cost, and the steps in installing a costing system in a factory.5 min
  2. Cost sheet, tenders and quotationsThe format of a cost sheet from prime cost to profit, treatment of stocks and scrap, and three solved papers: a detailed cost sheet with finished-goods stock, a short cost statement with machine-hour overheads, and a job quotation using last year's overhead percentages.5 min
  3. Material control: purchase procedure, stock levels, EOQ and inventory techniquesPurchase procedure, centralised and decentralised purchasing, the four stock levels and EOQ with their formulas, ABC, VED, JIT and perpetual inventory, with three solved level and EOQ problems from the papers.5 min
  4. Pricing of material issues: FIFO, LIFO and weighted average stores ledgerThe methods of pricing issues of material, their merits and effect on profit, and the stores ledger worked under LIFO and weighted average on the January 2026 paper, with the January 2025 FIFO problem including a return to vendor.4 min
  5. Labour cost: remuneration methods, incentive plans, idle time and labour turnoverTime and piece rates, Halsey and Rowan premium plans, Taylor, Merrick and Gantt, idle time, overtime and labour turnover, with the papers' Halsey-Rowan and differential piece-rate problems solved.5 min
  6. Overheads: classification, apportionment, service department distribution, absorption and machine hour rateClassification of overheads, allocation and apportionment bases, primary and secondary distribution by the direct, repeated distribution and simultaneous equation methods, absorption and under- or over-absorption, and the machine hour rate, all on the papers' figures.4 min
  7. Marginal costing and break-even analysis: contribution, P/V ratio, BEP and margin of safetyMarginal cost and marginal costing, its importance and limits, absorption versus marginal costing, contribution, P/V ratio, break-even point and margin of safety, with the papers' two-year and fixed-cost problems solved.4 min

Unit I 3 topics

  1. Budgetary control: meaning, objectives, preparation, advantages, limitations and zero-base budgetingBudget and budgetary control defined, objectives, the organisation and steps for preparing budgets, advantages and limitations, classification of budgets, and zero-base budgeting compared with traditional budgeting.4 min
  2. Functional budgets, the master budget and the cash budgetSales, production, cost, purchase, plant utilisation, capital expenditure and selling and distribution budgets, how they lead to the master budget, and the cash budget worked on the January 2026 paper.4 min
  3. Flexible budget and flexible budgetary controlFixed and flexible budgets, the steps in preparing a flexible budget and the treatment of semi-variable costs, with four solved papers: cost per unit at two outputs, profit at changing prices, an overhead budget with rates per hour, and a capacity budget.4 min

Unit II 1 topic

  1. Standard costing: objectives, principles, types of standards and setting standards for material, labour and overheadsStandard cost and standard costing, objectives, the steps in establishing a system, types of standards, how standards are set for material, labour, direct expenses and fixed and variable overheads, a standard cost card, advantages and limitations, and standard costing compared with budgetary control.5 min

Unit III 3 topics

  1. Material variances: cost, price, usage, mix and yieldVariance analysis defined, favourable and adverse variances, the formulas for material cost, price, usage, mix and yield variances, their causes and responsibility, and the January 2026 three-material problem with standard loss worked and checked.4 min
  2. Labour variances: cost, rate, efficiency, idle time and mixFormulas for labour cost, rate, efficiency, idle time, mix and sub-efficiency variances, their causes, and two solved papers: the three-grade gang problem of June 2025 and the two-grade problem of January 2026, each with its checks.4 min
  3. Overhead, sales and profit variances; disposition and significance of variances; standard cost accountingVariable and fixed overhead variances (expenditure, efficiency, volume, capacity), sales value and sales margin variances with mix and quantity, a reconciliation of budgeted and actual profit, how variances are disposed of in the accounts, and how their significance is judged.5 min

Unit IV 2 topics

  1. Uniform costing and inter-firm comparisonUniform costing defined, its objectives and purposes, the requisites and the development of a uniform costing system and manual, its merits and limits, and inter-firm comparison: meaning, procedure, requisites, advantages and difficulties.4 min
  2. Cost audit: meaning, objectives, the law under section 148, the cost auditor, audit programme and cost audit reportCost audit defined, its objectives and advantages, the move from sections 209(1)(d) and 233B of the 1956 Act to section 148 of the Companies Act 2013 and the 2014 Rules, appointment, duties and functions of the cost auditor, the audit programme and records checked, and the cost audit report.5 min

Unit V 2 topics

  1. Management audit: meaning, objectives, types of audit, scope, the management auditor and report, arguments for and againstManagement audit as defined by Leonard, its objectives and criticisms, how it differs from financial and cost audit, the types of audit, the areas it covers, the qualities of a management auditor, the management audit report, and the arguments for and against.4 min
  2. Social audit: meaning, objectives, steps in a social audit programme, the social audit report, advantages and limitationsSocial audit as a review of how a business meets its social responsibilities, its objectives and areas, the steps in a social audit programme, the contents and forms of the social audit report, advantages and limitations, and its Indian setting under CSR, BRSR and the MGNREGA.4 min