Cost Accountancy looks bigger than Financial Management but it is not that big or difficult as it is framed. If you are having problem in this subject then here you can follow some tips for Cost Accounting:
1. Refer PADHUKA book for Cost Accountancy. It contains past 60 exams questions and RTP. It is completely IPCC exam oriented book.
2. Out of 10 Chapters of costing 6 chapters are easy and simple, these are operating costing, Marginal costing, Materials, Budgetary control, contract and Integrated system & Reconciliation. It will just take few days and you can complete it quickly and the effort you have to give is only on practice. Exam hall is not a place where you just ‘sit and think’ the solutions, you have to answer quickly. So if you lack in practice then there is no trick which can save you from this subject in PCC/IPCC. Please practice cost and FM every day, try to solve all the questions of Padhuka or compiler and revise them as many times as you can because in Costing you may be knowing the chapters and you could also do its basic sums at home but you still need a lot of practice to do the sums in exam as you will be only having 3 hours and C.A level questions to be completed in 3 hours requires a lot of practice (Specially the previous year questions).
3. Start with a small or simple chapter first, it eases the pressure and makes the subject interesting at the first impression. So even if you are revising the subject from the beginning then pick a small chapter first but then onwards jump onto the important or big chapters.
4. So here you can start with the Operating costing, it’s a simple chapter among the other costing chapters. In operating costing sometimes questions are tricky. With proper revision you can understand the pattern of tricks in the questions. Please practice all different kinds of sums in this chapter like Operating costing of TRANSPORT, MACHINE, AIRLINES, HOTEL, HOSPITAL, ELECTRICITY, LIBRARY, INDIVISUAL SERVICE CENTRES ETC. Question can come from any part.
5.After completing Operating costing you can do any big chapter. You can select Standard Costing first. Standard costing and Process Costing are very important chapters, every time they ask questions from these 2 chapters, so try to complete Standard Costing and Process Costing first as they are important.
6.There are 5-6 topics in standard costing but the thing is that one topic is quite similar to another topic so if you get the concept “Material variance” properly then logic towards the “Labor variance” is same. Therefore as you proceed you will find that this chapter is not difficult or big. You just need to do all the variances like MATERIAL, LABOUR, OVERHEAD, SALES VARIANCES and do the problem sum on all variances together, like ALL VARIANCES and REVERSE WORKING WITH ALL VARIANCES. Formulas in this chapter are simple; when you do the sum you learn the formulas automatically.
6.Process Costing. Well in process costing the Topic at the beginning of the chapters are simple like normal/abnormal loss, abnormal gain etc, you don’t have to give too much effort to do this part. Thus the complicated part in this chapter is the equivalent production topic. If you face problem in this area then read the theory part slowly to understand the concept of equivalent production and then see the solved examples. You don’t have to run to your tutor or friends every time to clear your doubts, whenever you face difficulty in practical problems then read it’s theory part properly and see the solved examples. You can overcome all your doubts easily. Joint Product and by product is a small chapter, you can count it as a part of process costing.
7.When you are starting (or revising) other chapters then please do the revision of Standard costing and process costing side by side because questions often comes from these chapters and you should have a grip on Standard costing and process costing.
8. After Process & standard... You can do any simple chapter like Marginal costing. Avoid solving repeated problems in your book and focus on different kind of sums. Just learn the formulas and solve problems from Compiler or Padhuka. This is completely formula based chapter. Please cover all the areas in this chapter. Like if you are doing problems sums on the computation of PVR, BEP, MOS, profits etc then don’t skip the other topics like Profit under marginal and absorption costing (questions had been asked from this topic).
9. Material, Labour & Overhead. MATERIAL is very easy, mainly there is computation of EOQ, stock levels and valuation of inventory (FIFO, LIFO etc), and other than this there are few misc problems which you will find in Padhuka or compiler, don’t leave anything, Questions are formula oriented. Valuation of inventory (FIFO, LIFO) is but lengthy, practice properly because this part is very scoring. Topics which are scoring should be done most thoroughly because these parts can fetch you more marks.
LABOUR is not tough, so don’t get scared when you open this chapter. Actually labour requires complete logic. When you start solving the questions you will see you are getting different sums one after another but ALL THE PROBLEM SUMS ARE EASY, just keep on solving the questions and you will see that there is just logic required and nothing else to do this chapter.
Overhead needs patience and little time to complete. Questions can be tricky at some places but after solving few questions , you will understand the trick and complicated part of the questions. It just requires practice. Calculation of Machine hour rate in this chapter is in Operating costing as well, which is quite similar so you don’t have give much effort in this topic , however allocation of expenses and over/under absorption is an important and different topic so do it thoroughly and practice this part from the compiler surely.
10.Contract Costing. Apart from the escalation clause in this chapter, everything is simple. Just for the escalation clause you have to give little effort but even that can be done quickly. There are not many problem sums in contract chapter.
11.Budgetary control. OK, budget is very easy; you can complete it in few hours. There are just three topics in the chapter and very few problem sums. The chapter is very interesting so you can do it quickly.
12. Integrated system and reconciliation. Reconciliation is very small part and very simple. Only effort is required to do the ‘integrated system’ part. Integrated system is just lengthy but not difficult, here you are asked to open different accounts etc but the thing is that these are just not tough and you don’t have to give too much effort to complete it. Just see few solved examples and solve the compiler, moreover not many questions come from this chapter but you should not leave anything in a C.A exam.
13.The big chapters in costing are actually divided into small topics hence if you find a chapter big and difficult then don’t get apprehensive because there may be different topics in that chapter and you just need to do 2-3 sums from each topic and the chapters are done.
For example: In labour there may be too many sums but the chapter is actually divided into 7 small topics. These are Treatment of Idle time cost & overtime premium, Labour turnover rates, Piece rate system, Halsey /rowan systems, Group bonus system, wages under specified scheme and Misc illustrations. Therefore on an average there are 4 problems sum under each topic, if you can do just 2-3 problem sums from each topic then the chapter is done. It really looks easy and organized if you divide it into parts.
14. Even if you find Costing bigger than FM still the benefit you get in this subject is that many of the chapters can be completed quickly. So if you can complete 60-70% chapters in few days then obviously your confident increases and you can build a strong grip on this subject.
15. Please don’t ignore theory. Learning theory doesn’t means you gulp the whole thick institute material of cost and FM. You can refer compiler, see the last years question papers and read theory accordingly. Theory questions are straight forward hence it is always an advantage for you in COST/FM, so don’t leave theory part.
16. Lastly I would like say that any practical question requires smart analysis i.e. read the questions properly, no question is difficult whether you are doing Accounts, cost, fm or whatever. Only thing you have to do is read the questions slowly and think how to solve it, use your brain and don’t look at the answers. Practice the problem sums as much as you can.
17. You can also check out my TIPS FOR FINANCIAL MANAGEMENT.