Cost Accounting (BCOC-138): Records, Material Control, Labour Turnover & Overheads: quick revision, 16 bites

Cost Records Drive Planning and Control

Cost data is the business's steering wheel.

Cost accounting records help management **plan operations** and **control costs** by providing timely, accurate data on what is spent and why.

Takeaway. Cost records are not just bookkeeping — they are a management tool for planning and control.

Role of a Cost Accountant

More than numbers — a strategic partner.

Takeaway. The cost accountant bridges the gap between raw financial data and strategic management action.

Material Control: Definition

Right material, right time, right cost.

Takeaway. Material control balances availability with economy — no shortages, no excess.

Requirements of a Good Material Control System

Five pillars of material control.

Takeaway. A sound material control system covers purchase, storage, records, verification and issue.

ABC Analysis of Inventory Control

Not all inventory deserves equal attention.

ABC analysis classifies inventory by **value and usage** so control effort is focused where it matters most.

Takeaway. ABC analysis directs tight control to high-value items and simple control to low-value items.

FIFO vs LIFO Valuation

Oldest first or newest first?

Takeaway. FIFO matches actual flow for perishables; LIFO can reduce tax in inflation but is not always realistic.

Labour Turnover: Meaning

The rate at which workers leave.

Takeaway. High labour turnover signals dissatisfaction or poor working conditions and raises costs.

Causes of Labour Turnover

Why workers walk away.

Takeaway. Both avoidable (wages, conditions) and unavoidable (personal) causes drive labour turnover.

Reducing Labour Turnover

Keep the team, cut the cost.

Takeaway. Investment in employee satisfaction directly reduces turnover and its hidden costs.

Overhead Classification

Not all overheads are the same.

Takeaway. Classifying overheads by function and behaviour is the first step to controlling them.

Apportionment and Reapportionment of Overheads

Spread the cost, then spread it again.

Overheads are first **apportioned** to departments, then **reapportioned** from service departments to production departments.

Takeaway. Apportionment assigns overheads to departments; reapportionment moves service costs to production.

Cost Sheet: Per Kilometre Cost of a Vehicle

What does each kilometre really cost?

Takeaway. Per-unit cost combines fixed and variable elements; higher usage spreads fixed costs thinner.

Process Account: Joint Cost Allocation

Two products, one joint cost.

Takeaway. Process accounts track costs through stages and allocate joint costs to products.

Contract Account: Work-in-Progress

When a contract spans years.

Takeaway. Contract accounting recognises profit progressively based on work certified, not just cash received.

Confusing Apportionment with Allocation

Allocation ≠ apportionment.

Takeaway. Allocation is direct charging; apportionment is dividing shared costs on a fair basis.

Exam Tip: Show Working Notes

Marks hide in the working notes.

In cost accounting exams, **always show working notes** for calculations like apportionment, FIFO/LIFO, and cost per km. Examiners award step marks even if the final answer is wrong.

Takeaway. Working notes secure partial marks and demonstrate your method.