Management Accounting

MC-318

Program M.Com

Credit Hours 3

Duration 15 Weeks / 30 sessions

Prerequisites Admission in M.Com

Resource Person Tahir Mahmood (ACCA–UK, FCA-PAK)

Monday – Thursday
Counseling Timing
11:00 a.m. – 12:30 p.m.

tahir@umt.edu.pk
Contact
Phone # 042-35212801-10 Ext. 356

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 Capsule Statement

Management Accounting is the “Process of identifying, measuring, accumulating,

analyzing, preparing, interpreting and communicating information to help the managers
to fulfil organizational objectives”. This course is designed to enable students to learn
the management accounting techniques to achieve a level of proficiency sufficient to
guide management for effective utilization of economic resources. This course
capitalizes the accounting techniques and methods covered in the previous courses and
develop a conceptual foundation for establishing a result oriented mechanism of
administrative controls. This course surveys the types of control systems that can be
instituted in different situations. It examines the planning, recording, reporting,
analytical, and control processes, which generate information for management decisions
in business organizations. It also discusses the role of management in the financial
reporting process, the impact of the accounting information system on management’s
strategic decisions and explores the tools and concepts of cost management systems.
The practices of accounting information systems are analyzed to determine their
management implications.

Learning Objectives

After studying this course the participants should be able:-

1. To develop and utilize accounting information for strategic decision-making.

2. To learn about the decision making process in the field of accounting and finance.
3. To determine patterns of cost behavior including variable, fixed and semi –
variable costs.
4. To analyze the effects of absorption costing and variable costing on various
business decisions.
5. To make and use budgets for control purposes.

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 Learning Methodology

The Course

Regularity and Punctuality

Regularity and punctuality will be very strictly observed. You have an allowance of
only six absents (Out of 30 sessions). It includes the leaves that you get approved from
your Batch Advisor. In case you are absent in seven classes, you will get an ‘SA’ grade
in the course i.e; failure due to short attendance. Regarding punctuality, you will be
marked present only if you arrive in the class on time. Any absent during the
presentation sessions will result in deduction of 1 mark each from the class participation
marks. This means that the class participation marks can go into the negative as well. If
you miss a Quiz, you get zero in that Quiz. You will lose 5 marks if you deliver your
assignment / report after the due date.

Book Readings

You are supposed to read in advance the text chapters under discussion. Questions
answered, relating to these text chapters, will contribute to the class participation marks.

Class Participation

Positive, healthy and constructive class participation will be monitored in each class.
Particular emphasis will be given during the presentation sessions. The manner in which
the question is asked or answered will also be noted. Your behaviour as professional
accountants in the class will contribute to the class participation marks.

Consultancy Service

During this program, consider me as your consultant. You are free to discuss the
progress of the course any time you want. However to avoid inconvenience, setting up
of appointment is recommended.

In Case of Cheating

In real world outside the classroom, students do not often work individually. They
typically work in teams and help each other extensively. I have no objection to you

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getting help from me or other students. I encourage you to do so. But do not do your
assignments / projects etc. by cheating.

Remember that if you cheat, you will lose your 10 marks out of your aggregate
sessional evaluation in addition to the cancellation of the relevant quiz / assignment
/ project etc. whatever it will be. There is no second chance. The first time you are
caught cheating, you will be penalized.

Hope you will have great time learning Management Accounting.

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 Assessments

All of the activities held during the session will be evaluated; the final grades for the
course will be as follows:

Quizzes 20%

Assignments 10%

Mid-Term 15%

Attendance & Class Participation 5%

Project 5%

Presentations 10%

Final exam 35%

Total 100%

Recommended Text Books

 Management Accounting Practice Manual (2nd Edition)

By M. Tahir Mahmood (ACCA–UK, FCA-PAK)

 Management Accounting (7th Edition)

By Ronald W. Hilton

Reference Books

 Management Accounting
By Hansen / Mowen (6th Edition)

 Cost Accounting – Planning and Control

By Matz & Usry (9th Edition)
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 Calendar of Activities
Management Accounting – Fall 2010
Session Activity Chapter Reading

Basic Cost Terms and Concepts

Cost, expense and loss

Opportunity cost, differential cost, sunk cost
1-2 Out of pocket cost, imputed cost, relevant and 2
irrelevant cost
Period cost and product cost

Practice Questions: 1,2,3,4,5,6,7,8,9,10,11,12,13,14,15

Managerial Accounting: An Overview

Management process
3 1
Role of managerial accounting
Importance of managerial accounting

Assignment # 1

Cost Behaviour and Estimation

Fixed, variable and semi variable costs.

Using cost behaviour pattern to predict costs.
4-5 High low method 6
Account classification method

Practice Questions: 1,2,3,4,5,6,7,8,9

Quiz # 1
6-7-8 5
Activity Based Costing

Pool rate
Applied overheads

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 Practice Questions: 1,2,3,4,5

Assignment # 2

Marginal Vs Absorption Costing

Direct costing defined

Facets of direct costing
9-10 Concept of contribution margin 7
Direct costing VS Absorption costing

Practice Questions: 1,2,3,4

Quiz # 2

Cost, Volume and Profit Analysis

Contribution income statement

Break even in units and dollars
Contribution margin ratio
11-12 8
Target net profit
Safety margin

Practice Questions: 1,2,3,4,6,7,8,9,11

Assignment # 3

Budgeting: Profit Planning and Control Systems

Production budget
Purchase budget
13-14 Sale budget 9
Labour budget

Practice Questions: 2,5,7,10,11,14

Quiz # 3

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 Budgeting: Profit Planning and Control Systems

Cash budget
Projected income statement
15-16 9
Master budget

Practice Questions: 1,3,8,9,12,13

Mid Term

Standard Costing

Direct material price variance

Direct material quantity variance
17-18 Direct labour rate variance 12
Direct labour efficiency variance

Practice Questions: 1,2,3,4,5,6,7,8,9

Assignment # 4

Standard Costing

Planning variance
19 Operational variance 12

Practice Questions: 10,11,12,13

Quiz # 4

Responsibility Accounting

Responsibility centres
20 Total Quality Management 15

Practice Questions: 3,4

Project

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 Responsibility Accounting

Performance reports
21 Segmented reporting 15

Practice Questions: 1,2,5

Assignment # 5

Decision-Making

Relevant costs and benefits

22 Accept / reject a special order 13

Practice Questions: 3,6,7

Quiz # 5

Decision-Making

Add or drop a product

Make or buy a product
23-24 13
Qualitative vs. quantitative analysis

Practice Questions: 1,2,4,5,8

Assignment # 6

Pricing Methods

Profit maximizing pricing

25 Cost plus pricing 14

Practice Questions: 1,2

Quiz # 6

26-27 Presentations

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 Emerging Issues

28-29 Target costing 16

Value analysis
Cost reduction schemes

30 Revision

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