AAT – Principles of Costing

This course introduces students to basic costing principles, laying the groundwork for more advanced topics in costing and management accounting. It highlights the role of costing systems in providing information for management to plan, make decisions, and control costs. Students will learn to distinguish between costing and financial accounting from a business perspective.

The course teaches methods to cost materials, labor, and overheads to determine the course cost of products or services, including the use of coding systems. Students will also learn to classify costs and understand how these classifications aid in management decision-making. They will explore cost behavior at different output levels, and how variable and fixed costs per course change with output variations.

Students will construct basic course product costs based on labor hours, machine hours, and per course bases. This knowledge sets the stage for future studies on overhead apportionment, reapportionment, and absorption. The course introduces budgetary control systems, teaching students to compare actual costs with budgeted costs, identify variances as adverse or favorable, and report their causes and effects to management.

The course emphasizes that using digital tools for cost calculation can be quicker and more accurate than manual methods, preparing students with practical skills for real-world applications.

Learning Outcomes:
On successful completion of this subject, you should be able to:

1. Understand the cost recording system within an organisation
2. Use cost recording techniques
3. Provide information on actual and budgeted costs and income
4. Use tools and techniques to support cost calculations