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The pre-requisite for this course is financial accounting concepts as applied in trading and manufacturing business concerns and their application in business decision making.
This course emphasizes the use of accounting information in effective management. For effective management we need timely, relevant and accurate information, so this course is objectively focused on such information. In this course students study the reports , statements and analytical tools used by management and the manner in which they are applied in planning, controlling ,decision making and performance evaluation of various components of a corporate organization. This course includes basic cost term and concepts, costing systems, cost reports, cost behavior, cost-volume profit analysis, profit planning, variable and absorption costing, standard costing and budgeting techniques.
After studying this course the students should be able to: The course in objectively focussed on management accounting which primarily deals with decision making. The first part of study would cover introduction to management accounting, the purpose of management accounting and a comparison with financial accounting. The second part deals with understanding the basic cost terms, concepts, cost reports, cost behaviour, costing systems like job order costing and process costing, marginal and absorption costing and detailed discussions regarding cost-volume-profit relationship and activity based costing, relevant cost for decision making and pricing of products and services. The third part deals with budgeting for managers. After studying this course, the student should be able to : a. critically analyze the financial information regarding costs and costing, costing techniques, pricing decision and apply the results in business management. b.Obtain an understanding necessary to prepare various operating budgets alongwith some other budgeting techniques like flexible budgeting, zero based budgeting.
Lectures Reading Material Guest Speakers Industrial / Corporate Visits Skills Development Exercises Project Report / Term Paper Recommended Text Suplementary Texts Periodical Watch Exercises / Seminars Documentaries / Movies Handouts Case Studies Any other TeachingLearning Tool
Managerial Accounting by Garrison and Noreen , 14th Edition, Published by McGraw Hill
Managerial Accounting by Ronald W. Hilton , 6th Edition, Published by McGraw Hill Introduction to Management Accountin g by Charles T. Horngren , 14th Edition, Published by Pearson
Exam Type Quiz Assignments Project-Presentation Mid Term Final Term Class Participation
Percentage(%) 5 5 15 30 40 5
Week
Contents Introduction to course outline What is Management Accounting. Planning & Controlling Cycle, Financial Accounting vs. Managerial Accounting. Brief Overview of Organization Strucuture Product Cost/Manufcaturing Costs, Non-Manufacturing Costs, Product Costs vs. Period Costs Classification of Costs for financial Statements Predicting cost behaviour, Assigning costs to cost objects Job Order Costing vs. Process Costing Job Costing Overview, Job Order Cost Sheet, Process Costing Process Costing and Job order costing differences, Cost flow in Process Costing, Equivalent units of Production Cost Behavior Patterns, Variable and Step Variable Costs, Fixed costs and Step Fixed Costs, Committed and Discretionary Fixed Costs, Cost-volume Profit Analysis Break-even Analysis, Target Profit and Margin of Safety, operating Leverage, sales mix and break-even analysis. Marginal and Absorption Costing Income Statement Comparison under both methods Activity Based Costing Steps for Implementing ABC System Comparison with Traditional Costing and
Tasks/Activities
2 3 4 5 6
7 8 9
managerial decision making 10 11 12 13 14 15 16 17 Relevant Costs for Decision Making Buy or Make decision Adding or Dropping Product Lines Intoduction to Pricing Products and Servcices, Transfer Pricing, an Economis`s approach Budgeting, Basic Framework, Budget Committees, Master Budget, Sales Budget and Production Budget Direct Material Budget, Direct Labor Budget, manufacturing overhead Budget, Finished Goods Inventory Budget, Selling and Admn. Budget Cash Budget, Budgeted Income Statement, Budgeted Balance Sheet, Standard Costing and Management by Exception Flexible Budgets, Incremental Budgets, Zero based budgets Final Term
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