CA Intermediate is the second level of the CA course and Costing or Cost & Management Accounting is Paper 4 of the CA Inter examination that falls in Group 2 of CA Intermediate.
The Institute of Chartered Accountants of India (ICAI) has introduced CA Intermediate course new syllabus and this new syllabus-based examination will be held in 2025.
All CA students must have complete knowledge of these changes and prepare accordingly. This complete article is based on the new syllabus for 2025 CA Intermediate Cost & Management Accounting (CMA).
Read Also: CA Intermediate Course 2025 by ICAI
CA Intermediate Paper 4 New Syllabus 2025: Cost and Management Accounting
| Topics | Sub Topics |
|---|---|
| Overview of Cost and Management Accounting | Introduction to Cost and Management Accounting: – Objectives and Scope of Cost and Management Accounting. – The users of Cost and Management accounting information, Functions of management Accounting. – Role of the cost accounting department in an organization and its relation with other departments. – Installation of Costing System. – Relationship of Cost Accounting, Financial Accounting, Management Accounting and Financial Management. – Cost terms and Concepts. – Cost Reduction and Cost Control – Elements of Costs. – Cost behavior pattern, Separating the components of fixed, variable, semi-variable, and step costs. – Methods of Costing, Techniques of Costing. – Digital Costing |
| Elements of Cost and Preparation of Cost Sheets – Functional classification and ascertainment of cost. – Preparation of Cost Sheets for the Manufacturing sector and for the Service sector. | |
| Ascertainment of Cost and Cost Accounting System | Material Cost – Introduction to procurement procedures. Valuation of receipts, issue and closing stock of Material, Stock verification. – Material requirement analysis through digital costing including Government e-Marketplace (GeM). Introduction to Costing through Enterprise Resource Planning (ERP). Process of tender and quotation. – Inventory control: — Techniques of fixing the level of stocks- minimum, maximum, reorder point, safety stock, determination of the 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 inventory control ratios, Digital Inventory control. — Treatment of Normal/Abnormal Losses w.r.t. waste, scrap, spoilage, defective, obsolescence. |
| Employee Cost – Introduction to Attendance and Payroll procedures. – Elements of wages- Basic pay, Dearness Allowance, Overtime, Bonus, Holiday and leave, wages, Allowances, and perquisites – Employee Cost Control – Employee Turnover- Methods of calculating employee turnover, causes of employee turnover, effects of employee turnover – Remuneration systems and incentive schemes- Premium Bonus Method (Halsey Plan and Rowan Plan | |
| Direct Expenses Identification of direct expenses with the main product or service and its treatment | |
| Overheads – Functional analysis- Factory, Administration, Selling, Distribution, Research and Development. – Behavioral analysis- Fixed, Variable and Semi-Variable. – Allocation and Apportionment of overheads using the Absorption Costing Method. – Factory Overheads- Primary and secondary distribution. – Administration Overheads- Method of allocation to cost centers or products. – Selling & Distribution Overheads- Analysis and absorption of the expenses in products/customers, the impact of marketing strategies, and the cost-effectiveness of various methods of sales promotion. – Treatment of Research and development cost in cost accounting | |
| Concepts of Activity-Based Costing (ABC) | |
| Integration of Cost and Financial Data – Recording of financial data and its segregation. – Introduction to Non-integrated and Integrated Accounting Systems. – Items included in cost accounts only but financial accounts and vice versa. – Reconciliation of profit as per Cost and Financial Accounts (under Non-Integrated Accounting System) | |
| Methods of Costing | Single Output/ Unit Costing |
| Job Costing – Job cost cards and databases, collecting direct costs of each job, attributing overheads to jobs, Application of job costing. | |
| Batch Costing – Determination of optimum batch quantity, Ascertainment of cost for a batch, Preparation of batch cost sheet, Treatment of spoiled and defective work | |
| Process/Operation Costing – Process cost recording, Process loss, Abnormal gains and losses, Equivalent units of production, Inter-process profit, and Valuation of work in process. – Joint Products-Apportionment of joint costs, Methods of apportioning joint cost over joint Products. – By-Products-Methods of apportioning joint costs over by-products, treatment of By-Product cost | |
| Costing of Service Sectors – Determination of Costs and Prices of services | |
| Cost Control and Analysis | Standard Costing – Setting up Standards, Types of Standards, and Standard Costing as a method of performance Measurement. – Calculation and Reconciliation of Material Cost, Labour cost, Variable Overhead, Fixed Overhead. |
| Marginal Costing – 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). – Determination of Cost of a product/ service under marginal costing method, determination of cost of finished goods, work-in-progress. – Comparison of Marginal costing with absorption costing method- Reconciliation of profit under both methods. Short-Term Decision-Making: – Make or buy decision – Discontinuation decision – Multiproduct break-even analysis – Limiting factor (key factor) | |
| Budget and Budgetary Control | |
| – Meaning of Budget, Essentials of Budget, Budget Manual, Budget setting process, Preparation of Budget and monitoring procedures. – The use of budget in planning and control. – Flexible budget, Preparation of Functional budget for operating and non-operating functions – Cash budget, Master budget. – Introduction to Principal/ Key budget factor Zero Based Budgeting (ZBB), Performance budget, Control ratios, and Budget variances. – Budgets and motivation. – Feedback and Feedforward controlling in budgeting |
Download the CA Inter Costing Free Study Material Now
How to Prepare for CA Inter Costing for 2025 Examination?
Preparing for CA Intermediate Cost & Management Accounting (CMA) 2025 examination must be a structured approach with complete dedication.
You can follow the step-by-step procedure to prepare for CA Inter Costing exam:
Know Your Syllabus
For every exam preparation, syllabus is the first thing that you should know about. Complete syllabus knowledge will help you to follow the further steps for better preparation for the examination.
Study Material
In CA course 2 types of study material you can reach out, the first set of study material is provided by ICAI for all students who have registered for CA intermediate examination. The second set of study material is that which is grabbed by you from other reliable sources or best faculties. So, choosing the second set of study material is crucial for preparation.
Study Schedule
Plan your complete study schedule from the first day of joining CA Intermediate level. Your schedule must have time for every topic of the subject and also helps you to device all the topics regularly. For the Cost & Management Accounting examination, you must have time to practice numerical questions.
Conceptual Based Learning
Conceptual-based learning is necessary for CA Inter Costing exam preparation. If your concepts are clear then you can easily crack your CA Inter costing exam in the first attempt with good marks or full marks.
Practice Regularly
Practice solving problems regularly to strengthen your understanding and improve your speed. Use practice manuals, previous year’s question papers, and mock tests for practice.
CA Intermediate Complete Course 2025
| CA Inter Group 1 | ||
|---|---|---|
| Paper 1: Advanced Accounting | 30% Objective 70% Descriptive | 100 |
| Paper 2: Corporate and Other Law Part A – Company Law and Limited Liability Partnership Law (70 Marks) Part B – Other Laws (30 Marks) | 30% Objective 70% Descriptive | 100 |
| Paper 3: Taxation Part A – Direct Taxation (50 Marks) Part B – Indirect Taxation (50 Marks) | 30% Objective 70% Descriptive | 100 |
| CA Inter Group 2 | ||
| Paper 4: Cost and Management Accounting | 30% Objective 70% Descriptive | 100 |
| Paper 5: Auditing and Ethics | 30% Objective 70% Descriptive | 100 |
| Paper 6: Financial Management and Strategic Management: Part A – Financial Management (50 Marks) Part B – Strategic Management (50 Marks) | 30% Objective 70% Descriptive | 100 |
FAQs
Who is the best faculty for CA Inter Costing for 2025 Examinations?
CA Ashish Kalra sir is the best CA Inter costing faculty with an extensive 25+ years of experience in teaching CA students. With this new costing syllabus the classes of CA Ashish Kalra sir are also updated and based on conceptual based study for this subject.
How to get Exemption in CA Inter Cost & Management Accounting 2025 Exams?
Steps to score higher marks in CA Inter Cost & Management Accounting:
- Join the best CA Inter Costing Classes.
- Follow the schedule you prepared for study.
- Revise all topics that are covered in the class daily.
- Practice practical questions and make a habit of solving them faster.
- Complete your syllabus and start revising it.
- Participate in both chapter-wise test series and mock test series.
- Read the complete pocket notebook before the exam.
What books should I read for costing CA inter?
For CA Inter Costing exam you can prepare from the following books:
- Study Material by ICAI
- Study Material and PocketBooks by CA Ashish Kalra