Cost Accounting

Where the marks are

Percentages are the examinable weighting for each area. Revising in this order puts your time where the marks are.

1. Elements of cost

   25%

   Accounting for inventory: classification, documentation and control · Overheads: allocation, apportionment and absorption · Under- and over-absorption of overheads · Valuation of inventory issues and store records · Activity based costing and activity based management · Just-in-time production and purchasing · Job evaluation, merit rating, work study and work measurement · Time-keeping and time-booking · Labour remuneration methods and incentive schemes · Overtime, idle time and payroll accounting · Causes and cost of labour turnover

2. Costing methods

   15%

   Specific order costing: job, batch and contract costing · Process accounts: normal loss, abnormal loss and abnormal gain · Equivalent units and work-in-process · By-products and joint products · Service costing · Service, subscription and digital product cost models

3. Performance measurement

   15%

   Budgeting and budgetary control · Types of budget and the stages of the budgeting process · Fixed, flexible and zero-based budgeting · Standard costing and the setting of standards · The standard cost card · Computation of basic variances · Standard ratios and the analysis of variances

4. Other costing techniques and decision-making tools

   15%

   Marginal and absorption costing income statements · Relevant cost and limiting factors · Cost statements for short-term decision-making · Cost-volume-profit analysis · Break-even charts and contribution ratios · Advanced CVP, scenario planning and the limitations of break-even analysis · Simple investment appraisal: payback and net present value

5. Introduction to cost accounting

   10%

   Cost accounting and its related terms · Nature, purpose, behaviour and scope of cost accounting · The role of the cost accountant · Source documents in a costing system · Cost data, cost information and its value in decision-making · Information technology and spreadsheets in providing cost information · Cost accounting compared with financial and management accounting · The cost recording system and designing a cost accounting system

6. Developments in cost accounting

   5%

   Just-in-time, lean accounting, kanban and backflush accounting · Life cycle costing, target costing and throughput accounting · Advanced manufacturing technology · Data analytics, predictive analytics and cost transparency · Sustainability, environmental and carbon footprint cost accounting · Cloud-based solutions and blockchain in cost accounting

7. Cost classification, codification, and segregation

   5%

   Classification of cost · Cost coding and coding systems · Cost segregation, cost estimation and the linear cost function · Segregating cost using scatter graph, high/low and regression analysis · Fixed, variable and semi-variable costs and changing activity levels

8. Interlocking and integrated accounts

   5%

   Bookkeeping entries and ledgers under interlocking systems · Reconciliation of financial and cost accounting profits · The integrated accounting system

9. Cost reduction and control

   5%

   Cost reduction and cost control · Cost control and cloud systems · Value analysis and value engineering · Organisation and methods, and work study · Cost audit

Where candidates lose this paper

The Institute publishes its own past questions. What it cannot give you is an answer to these.

There is not enough time to read the whole study text before the diet.

The official study text condensed and reorganised by examinable weighting, with every claim cited back to the page it came from — so you can check anything you doubt in one click.

You write practice answers for months and never find out whether a single one would have scored.

Write by hand, photograph it, and have it marked against the examiner's own marking guide — with the marks broken down the way the examiner breaks them down, and the reason for each one.

The study text is hundreds of pages and none of it tells you which parts the examiner actually asks about.

Every syllabus topic, ordered by the share of marks it carries, so your revision time follows the marks instead of the page count.

You know the answer but lose marks anyway, and no one ever explains where they went.

The Institute's published solution beside your attempt, with the mark allocation visible — so you can see the marks sitting in the principle and the application, not only the final figure.