Course Objectives
LEARNING OUTCOMES
At the end of this course, students should be able to
COURSE CONTENTS
Management accounting is not a mere accounting technique for providing financial statements, its major role however lies in planning and controlling business operations, analyzing costs for operational decisions and formulating long term and short term business policies and strategies. Hence a strong understanding of Managerial accounting concepts is a pre requisite for all sorts of financial decision-making. Course contents are designed to encompass the course objectives and the related learning outcomes.
Week |
Main Topics |
1 |
Decision making and Relevant Information . Information and decision process. Relevant costs and relevant revenues.
|
2 |
One time only special orders. Potential problems in relevant cost analysis. Insourcing-vs-outsourcing. Make vs. buy decisions. |
3 |
Opportunity costs and capacity constraints. Carrying costs of inventories. Product mix decisions under capacity constraints. Consumer profitability and relevant costs analysis. |
4 |
Analysis of adding & dropping a business segment. Performance evaluation analysis. |
5 |
Pricing decisions and cost management. Major influences on pricing decisions. Time horizons of pricing decisions. |
6 |
Target costing for target pricing. Value engineering. Cost plus pricing. Life cycle product costing |
7 |
Cost Allocation, customer profitability and sales variance analysis. Purposes of cost allocation. Cost benefit approach. |
8 |
Allocation of corporate costs and costing systems. Customer cost analysis. Customer revenue analysis. Sales variances. Static budget variance |
9 |
Flexible budget variance and sales volume variance, sales mix and sales quantity variance, market share variance and market size variance in-process and off-process inspection |
10 |
Cost management of joint and by products, Joint costs basics. Approaches to allocating joint costs. Sales value at split off method. Physical measure method. |
11 |
Net realisable value method. Sell or process further decisions. Joint cost allocation and performance evaluation. Byproducts recognized at time of production. By products recognized at time of sale. |
12 |
Control systems, transfer pricing and multinational considerations. Management control systems and their evaluation. Organization structure, decentralization and its benefits. |
13 |
Cost and revenue analysis of decentralization. Responsibility centres. Transfer pricing methods. |
14 |
Market based transfer prices, cost based transfer prices, negotiated transfer prices. |
15 |
Performance Measurement & multinational considerations . Financial &non financial performance measures. |
16 |
Choosing among different performance measures. Return on investment. Residual income. Economic value added. Return on sales. Comparison of performance measures. |