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CA Intermediate Paper 3 Cost and Management Accounting Syllabus

CA Intermediate Paper 3 Cost and Management Accounting Syllabus

CA Intermediate Paper 3 Cost and Management Accounting Syllabus:

The Institute of Chartered Accountants of India (ICAI) has now announced dated 27th May 2017 that the Revised Scheme of Education and Training for CA course will come into effect from 1st July, 2017. Students who are eligible to register in the CA IIPC under the existing (OLD) scheme, may register on or before 30th June, 2017

ICAI has given details about CA New Course | Foundation Route, CA New Course | Direct Entry Route, Changes in CPT, IPCC and CA Final syllabus from 2016 and other training programmes| CA IPCC Old Scheme Versus CA Inter New Scheme Syllabus.

CA Intermediate Paper 3 Cost and Management Accounting Syllabus

PAPER – 3: Cost and Management Accounting (One Paper- Three hours- 100 Marks)

A. Overview of Cost and Management Accounting

(a) Introduction to Cost and Management Accounting

(i) Objectives and Scope of Cost and Management Accounting,
(ii) The users of Cost and Management accounting information- Functions of management accounting.
(iii) Role of cost accounting department in an organisation and its relation with other departments.
(iv) Installation of Costing System
(v) Relationship of Cost Accounting, Financial Accounting, Management Accounting and Financial Management.
(vi) Cost terms and Concepts
(vii) Cost Reduction and Cost Control
(viii) Elements of Costs
(ix) Cost behavior pattern, Separating the components of fixed, variable, semi-variable and step costs.
(x) Methods of Costing, Techniques of Costing.
(xi) Cost Accounting with use of Information Technology.

(b)Elements of Cost and preparation of Cost Sheets

(i) Functional classification and ascertainment of cost
(ii) Preparation of Cost Sheets for Manufacturing sector and for Service sector

CA IPCC Old Scheme Versus CA Inter New Scheme Syllabus

B. Ascertainment of Cost and Cost Accounting System

(a) Material Cost

(i) Procurement procedures- Store procedures and documentation in respect of receipts and issue of stock, Stock verification,
(ii) Valuation of material receipts,
(iii) Inventory control-

– Techniques of fixing level of stocks- minimum, maximum, re-order point, safety stock, determination of optimum stock level,
– Determination of Optimum Order quantity- Economic Order Quantity (EOQ),
– Techniques of Inventory control- ABC Analysis, Fast, Slow moving and Non moving (FSN), High, Medium, Low (HML), Vital, Essential, Desirable (VED), Just-in-Time (JIT)- Stock taking and perpetual inventory system, use of control ratios,

(iv) Inventory Accounting
(v) Consumption- Identification with products of cost centres, Basis for consumption entries in financial accounting, monitoring consumption.

(b) Employee Cost

(i) Attendance and Payroll procedures-
– Elements of wages- Basic pay, Dearness Allowance, Overtime, Bonus, Holiday and leave wages, Allowances and perquisites.
(ii) Employee Cost Control
(iii) Employee Turnover- Methods of calculating employee turnover, causes of employee turnover, effects of employee turnover.
(iv) Utilisation of Human Resource, Direct and indirect employee Cost, charging of employee cost, Identifying employee hours with work orders or batches or capital jobs.
(v) Remuneration systems and incentive schemes-
-Time Rate System, Piece Rate System, Differential piece rate system, Calculation of wages, Effective Wages.

(c) Direct Expenses

(i) Direct expenses
(ii) Nature of Direct or Chargeable expenses.
(iii) Sub-contracting- Control on material movements, Identification with the main product or service.

(d) Overheads

(i) Functional analysis- Factory, Administration, Selling, Distribution, Research and Development.
(ii) Behavioral analysis- Fixed, Variable and Semi- Variable.
(iii) Allocation and Apportionment of overheads using Absorption Costing Method.
(iv) Factory Overheads- Primary and secondary distribution,
(v) Administration Overheads- Method of allocation to cost centres or products,
(vi) Selling & Distribution Overheads- Analysis and absorption of the expenses in products/ customers, impact of marketing strategies, cost effectiveness of various methods of sales promotion.
(vii) Treatment of Research and development costing.

(e) Concepts of Activity Based Costing (ABC)
(f) Recording and Accounting of Costs

(i) Non-integrated Cost Accounting system- Ledger under non-integral system
(ii) Integrated (Cost and Financial) Accounting system- Ledgers under integral system.
(iii)Difference between the Non- integrated and Integrated Accounting system.
(iv) Reconciliation of profit as per Cost and Financial Accounts (under Non-Integrated Accounting System).

C. Methods of Costing

(a) Single Output/ Unit Costing
(b) Job Costing: Job cost cards and databases, collecting direct costs of each job, attributing overheads to jobs, Application of job costing.
(c) Batch Costing: Determination of optimum batch quantity, Ascertainment of cost for a batch, Preparation of batch cost sheet, Treatment of spoiled and defective work.

(d) Contract Costing

(i) Ascertainment of cost of a contract, Progress payment, Retention money, Escalation clause, Cost plus contract, Value of work certified, Cost of Work not certified.
(ii) Determination Value of work certified, Cost of work not certified, Notional or Estimated profit from a contact.

(e) Process/ Operation Costing

(i) Process cost recording, Process loss, Abnormal gains and losses, Equivalent units of production, Inter-process profit, Valuation of work in process.
(ii) Joint Products- Apportionment of joint costs, Methods of apportioning joint cost over joint products,
(iii) By-Products- Methods of apportioning joint costs over by-products, treatment of By-product cost.

(f) Costing of Service Sectors

(i) Determination of Costs and Prices of services of following sectors/ Industries:
– Transport, Toll roads, Hospitals, Canteen/ Restaurants, Hotels/ Lodges, Educational Institutions, Financial Institutions/ Banks, Insurance, IT sector and other services.

D. Cost Control and Analysis

(a) Standard Costing

(i) Setting up of Standards, Types of Standards, Standard Costing as method of performance measurement.
(ii) Calculation and Reconciliation of Cost Variances-
-Material Cost Variance, employee Cost Variance, Variable Overheads Variance and Fixed Overhead Variance.

(b) Marginal Costing

(i) Basic concepts of marginal costing, Contribution margin, Break-even analysis, Break –even and profit volume charts, Contribution to sales ratio, Margin of Safety, Angle of Incidence, Cost-Volume-Profit Analysis (CVP), Multi- product break- even analysis, Consideration of Limiting factor (key factor),
(ii) Determination of Cost of a product/ service under marginal costing method, determination of cost of finished goods, work-in-progress,
(iii) Comparison of Marginal costing with absorption costing method- Reconciliation of profit under the both methods,
(iv) Short term decision making using the above concepts (basic / fundamental level).

(c) Budget and Budgetary Control

(i) Meaning of Budget, Essentials of Budget, Budget Manual, Budget setting process, Preparation of Budget and monitoring procedures.
(ii) The use of budget in planning and control
(iii) Flexible budget, Preparation of Functional budget for operating and non- operating functions, Cash budget, Master budget,
(iv) Introduction to Principal/ Key budget factor, Zero Based Budgeting (ZBB), Performance budget, Control ratios and Budget variances.

CA Intermediate Paper 3 Cost and Management Accounting Syllabus

Old SchemeNew Scheme
CA IPCCCA Intermediate
700 Marks and 7 papers800 Marks and 8 papers
Group 1
Accounting (100 Marks)Accounting (100 Marks)
Business Laws, Company Law(30 + 30 Marks),Ethics and Communication (20 + 20 Marks)Corporate (60 Marks)and

Other Laws (40 Marks)

Cost Accounting (50 Marks)Financial Management (50 Marks)Cost Accounting (100 Marks)
Taxation (DT 50 Marks | IDT 50 Marks)Direct Tax Laws (60 Marks) andIndirect Tax Laws (40 Marks)
Group 2
Advanced Accounting (100 Marks)Advanced Accounting (100 Marks)
Auditing and Assurance (100 Marks)Auditing and Assurance (100 Marks)
Financial Management (60 MarksBusiness Economic Environment (40 Marks)
Information Technology (50 Marks)Strategic Management (50 Marks)Information Technology (60 Marks)Strategic Management (40 Marks)

CA Intermediate Paper 3 Cost and Management Accounting Syllabus

PapersCA Intermediate Subjects
(New Syllabus 2017)
Paper-2Corporate and Other LawsPart I: Company Law (60 Marks)

Part II: Other Laws (40 Marks)

Paper-3Cost and Management Accounting100
Paper-4TaxationSection A: Income Tax Law (60 Marks)

Section B: Indirect Taxes (40 Marks)

Paper-5Advanced Accounting100
Paper-6Auditing and Assurance100
Paper-7Enterprise Information Systems & Strategic ManagementSection A: Enterprise Information Systems (60 Marks)

Section B: Strategic Management (40 Marks)

Paper-8Information Technology and Strategic ManagementSection A: Financial Management (60 Marks)

Section B: Economics for Finance (40 Marks)


CA Intermediate Paper 3 Cost and Management Accounting Syllabus


CA Intermediate amendments and updates subject wise

CA IPCC Old Scheme Vs CA Inter New Scheme Syllabus

CA Intermediate Paper 3 Cost and Management Accounting Syllabus

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