Islamic university in Uganda
Course outline
Faculty Management Studies
Department Business Studies
Course Title Fundamentals of Cost Accounting
Year of Study 2
Course Code DIC 2202
Credit Hours 3
Contact Hours 60
Mode of Delivery Lectures, tutorials, online teaching and presentation
None
Mode of Assessment Weight (%)
Course Work 30%
Final examinations 70%
Total 100
Course
Instructor(s)
Course Description The course is concerned with fundamental cost concepts, behavior and analysis
and the use of cost information to develop superior decision making process
and outputs. Therefore, it enables the student to prepare production cost sheets
and be able to use accounting information within the context of business
activities.
Course Objectives The objectives of the course are to enable the students should be able to;
1. Understand cost concepts, cost behaviours and cost accounting
techniques that are applied to manufacturing companies.
2. Acquire knowledge of preparing budgets
Learning Outcomes By the end of the course, students should ;
1. Apply cost concepts and cost behaviours in the solving of management
problems
2. Determine the cost of products and services
3. Analyse the profitability of a product or service.
4. Prepare financial statements of manufacturing companies.
5. Prepare cost budgets, cash budgets and determine breakeven point .
Teaching and The class will meet for three hours each week.
Learning
Week Detailed Course Outline Allocated Time
1st 2nd week Introduction to Cost Accounting 6 Hours
Definition, nature and scope of Cost Accounting
Comparison; Cost Accounting vs Management
Accounting, Cost Accounting vs Financial
Accounting.
Relation of Cost Department to other departments.
Sources of cost accounting data.
Use of cost control as a tool for planning.
Objectives, advantages and limitations of Cost
accounting
Role of a Cost Accountant in a manufacturing firm.
Reports generated by cost accounting department.
3rd Week. Installation of a Cost Accounting System
Basic consideration
Steps in introduction
Essentials of a good cost accounting systems.
Difficulties in introduction. 3 Hours
4th and 5th Week Cost Concepts and terms
Cost, predetermined cost, standard cost, estimated 6 Hours
cost
Marginal cost, Differential cost, Decision driven cost
Notional/imputed cost, Product(inventoriable) cost,
Opportunity cost, joint cost, period cost, sunk cost
Cost center, cost unit, cost allocation, cost
apportionment, cost absorption, responsibility center.
6th and 7th Week Classification and elements of cost
Fixed, variable costs and semi-variable cost.
Graphic representation of cost behavior.
6 Hours
Elements of cost-material, labor and overhead
costing.
Introduction to manufacturing cost statements.
8th and 10th Week Financial statements for Manufacturing companies
Concept of direct materials, work in progress and
finished goods and their presentation in financial
statements.
Manufacturing costs, costs of goods manufactured 9Hours
Cost of goods sold and profit statement.
Manufacturing account
11thand 12th Week Budgeting
Definition
Importance and limitation of budgeting
Types of budgets; production, cash budget, flexible
budget and fixed budgets 6 Hours
Cash Budget
13thWeek Budgetary control
Definition
Prerequisites for effective budget control
3Hours
Organization for budgetary control
Key factors in preparing the budget.
Budgetary control process.
Advantages and limitations of budgetary control.
14thand15thweek Break Even analysis
Calculation of Break-even point, principle upon
which it is based.
6 Hours
Importance of this analysis.
Construction of a Break even chart
Breakeven point in sales volume units and in
currency(monetary terms)
Total Contact Hours 45 Hours
References
Anirban G,(2015) Fundamentals of Cost Accounting:LAP LAMBERT Academic Publishing
Srikant M,Madhav V(2018),Horngren’s Cost Accounting:A Managerial Emphasis 16th Edition.
Phillips F, Libby R, Libby P.(2011),Fundamentals of Financial Accounting 4th Edition New York M c
GrawHill.
William N, Shannon W, Maher M.(2019),Fundamentals of Cost Accounting: McGraw-Hill Education
6th Edition
Steven M.B,(2019) Cost Accounting Fundamentals: Accounting tools, Inc 6th Edition
William N, Shannon W, Maher M.(2017),Fundamentals of Cost Accounting 5th Edition
