Cost accounting is an incredibly interesting subject. However, it seems to be a little tough for most of the students, preparation wise. It is completely unpredictable with the respect to the new question patterns that are asked in the examination. It requires a lot of practice to approach the questions with common sense. Padhuka’s costing books written by CA.Saravana Prasad are great for costing and also for financial management since they structure the solution to every problem step by step, therefore making it much easier to remember a standard format. If the mere thought of costing/FM gets you cold feet, i recommend you to follow the tips mentioned below:
- Put yourself in the situation : Approach the problem as though you are trying to deal with your own money and business. This way you will be able to attach much more sense in approaching the problem.
- Memorize the format: When practicing costing problems try to memorize the format in which the problem is solved. This will help you to structure your solution. For eg: There is a basic tabular column to to find out the standard cost. Try to remember the headings of the tabular column to help you solve the question quickly.
- Write down the formulas: Maintain a separate notebook and write down the formulas chapter wise and memorize them. Everyday, assess yourself by repeating the formulas aloud without referring to the notebook. This is a highly effective way to remember the formulas.
- Understand the pattern: Give attention to the question and the pattern on how it is solved. Try to apply the solving pattern to similar questions.
- Do not skip theory: Even though this is more of a practical subject, theory is equally important. Do not skip theory. Studying theory also helps you in applying correct formula to the relevant question. Otherwise, there is a chance that even if you know the formula by heart, you end up not understanding the question and apply the wrong formula. For eg: Without a proper understanding of the theory, it is possible you may classify an administration OH as production OH or vice versa.
- Practice in entirety: Practice is the key to ace costing/FM. Sometimes students may feel confident about a particular problem or topic. However, without adequate practice the student will not be able to solve the problem on the examination day within the specified time limit. Take that pen,paper and calculator and get your fingers moving.While practising the problems, do not stop half way. Be patient and complete the sum in its entirety even if you think you are nearing the answer.Practice and solve a minimum of 10 to 20 problems from each chapter
- Practice Manual: Study and practice all the questions from the practice manual. This is really important. Give the highest priority to be thorough with all the questions in the practice manual since you can be assured a minimum of 20 to 30 marks with questions appearing in the same pattern as that of the practice manual.
Few important topics that are easy to score and prepare in costing are :
- Material costing
- Absorption costing
- Activity based costing
- Unit and batch costing
- Marginal costing
- Budgetary control
- Joint and by products
- Process costing
Financial management, on the other hand is a cakewalk with an easy understanding of concepts and formulas. It is an easy subject to score good marks. Again it requires lots of practice and attention to and application of theoretical concepts. Few important topics that are easy to score and prepare are :
- Ratio Analysis
- Cost of capital
- Financial Leverages
- Investment and dividend decisions
- Capital Budgeting
Try to make yourselves stronger in the topics mentioned above, to achieve a leverage during the examination.
Happy Learning ! 🙂