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Synopsis This course seeks to expose students to the functions and principles of Management Accounting and its applications in
managerial decisions. It focuses on understanding basic but major issues related to concepts, theories, techniques and
practical problems of management accounting from entrepreneurial perspective. Topics include costing and cost control,
budgeting, short term decision making, standard costing and and capital budgeting.
Main Reference 1. Mowen M.M. Hansen D.R. & Heitger D.L. Managerial Accounting, (2012). 4th Edition, South-Western Cengage
Learning
2. Atkinson, A.A., Kaplan, R.S., Matsumura, E.M., and Young, S.M., (2012). Management Accounting, 6 th. Edition,
Prentice Hall.
e-books (ebrary)
Arora, M.N., Management Accounting: Theory, Problems and Solutions. (2009) Global Media, Mumbai, IND
Additional References 1. Blocher, E.J., Stout, D.E. & Cokins, G., Cost Management A Strategic Emphasis, 5th Edition, McGraw-Hill, 2010.
2. Garrison, R. H, Noreen, E. W. & Brewer, P.C. (2010) Managerial Accounting, 13th Ed., McGraw Hill.
3. Drury, C. Management and Cost Accounting, 7th Edition, Thomson Learning, 2008.
e-books (ebrary)
1. Agrawal, N.K. Principles of Management Accounting. (2010) Global Media. Delhi, IND
2. Ramagopal, C. Accounting for Managers. (2009) New Age International. Daryaganj, Delhi, IND
Additional
No. Topics Learning Outcomes Suggested Learning Activities
References
1 Introduction To Management Cost And a. Explain the meaning of managerial a. Google and understand
Accounting accounting. relevant concepts related to the
Development of Cost and b. Explain the differences between managerial topic being discussed.
Management Accounting accounting and financial accounting. b. Go through the Lecture Slide.
Difference Between Management c. Identify and explain the current focus of c. Go through relevant slides in
Accounting and Financial managerial accounting the Chapter1 folder.
Accounting d. Describe the role of managerial d. Read Chapter 1 of Mowen and
accountants in an organization. Chapter 1 of Atkinson.
Management Accounting Role in
e. Explain the role of Management e. Do one exercise at the end of
Performance Evaluation and
Accountant in planning, controlling and each chapter you read.
Rewards
decision making. Suggested exercise from
Mowen: 1-11, 1-12, 1-13
Cost Concepts And Cost Classification a. Understand the strategic role of basic cost a. Google and understand
2 Manufacturing Costs concepts. relevant concepts related to the
Material Costs, Labour Costs and b. Explain the cost driver concepts at the topic being discussed.
Overhead activity, volume, structural, and b. Go through the Lecture Slide.
executional levels. c. Go through relevant slides in
Opportunity Costs and Sunk
c. Understand the strategic role of cost the Chapter 2 folder.
Costs
estimation. d. Read Chapter 2&3 of Mowen
Fixed Cost, Variable Cost, Mixed d. Use the high-low cost estimation method. and Chapter 3 of Atkinson
Cost e. Explain the cost concepts used in product e. Do one exercise at the end of
and service costing. each chapter you read.
f. Demonstrate how costs flow through the Suggested exercise from
accounts. Mowen: 2-38-2.41, 2-44, 2-
g. Prepare an income statement for both a 46, 2-49, 3-20, 3-22, 3-26, 3-
manufacturing firm and a merchandising 30, 3-40
firm.
3-4 Costing Systems a. Explain the types of costing systems. a. Google and understand
Cost Accounting Systems b. Explain the flow of costs in a job costing relevant concepts related to the
Job Order Costing system. topic being discussed.
c. Explain the application of factory overhead b. Go through the Lecture Slide.
Process Costing
costs in a job costing system. c. Go through relevant slides in
Activity-based Costing d. Calculate underapplied and overapplied the Chapter 3 folder.
overhead and show how it is accounted for. d. Read Chapter 5-7 of Mowen
e. Identify the types of firms or operations for and Chapter 4-5 of Atkinson
which a process costing system is most f. Do one exercise at the end of
suitable each chapter you read.
f. Explain the strategic role of activity-based Suggested exercise from
costing. Mowen: 5-29, 5-33, 5-36, 5-
g. Describe activity-based costing (ABC), the 50, 5-51, 7-37, 7-53, 7-54
steps in developing an ABC system, and the
benefits and limitations of an ABC system.
h. Determine product costs under both the
volume-based method and the activity-
based method and contrast the two.
i. Explain activity-based management (ABM).
5-6 Cost-Volume-Profit Analysis a. Explain cost-volume-profit (CVP) analysis, a. Google and understand
Cost-Volume Relationship the CVP model, and the strategic role of relevant concepts related to the
Cost Behavior and Operating CVP analysis. topic being discussed.
Income b. Apply CVP analysis for breakeven planning. b. Go through the Lecture Slide.
c. Apply CVP analysis for profit planning. c. Go through relevant slides in
Contribution Margin, Margin of
d. Employ sensitivity analysis to more the Chapter 4 folder.
Safety
effectively use CVP analysis when actual d. Read Chapter 4 of Mowen and
sales are uncertain. Chapter 3 of Atkinson
e. Adapt CVP analysis for multiple products. e. Do one exercise at the end of
f. Apply CVP analysis in not-for-profit each chapter you read.
organizations. Suggested exercise from
g. Identify the assumptions and limitations of Mowen: 4-31, 4-37, 4-48, 4-
CVP analysis and their effect on the proper 49, 4-51
interpretation of the results.
7-8 Special Decisions a. Define the decision-making process and a. Google and understand
Concept of Relevant Cost identify the types of cost information relevant concepts related to the
Information relevant for decision making. topic being discussed.
Opportunity Costs, Sunk Cost b. Use relevant cost analysis and strategic b. Go through the Lecture Slide.
analysis to make special order decisions. c. Go through relevant slides in
Incremental Analysis in Common
c. Use relevant cost analysis and strategic the Chapter 5 folder.
Business Analysis
analysis in the make, lease, or buy decision. d. Read Chapter 13 of Mowen
Special Order Decision, d. Use relevant cost analysis and strategic and Chapter 3 of Atkinson
Production Constraint Decisions analysis in the decision to sell before or e. Do one exercise at the end of
after additional processing. each chapter you read.
e. Use relevant cost analysis and strategic Suggested exercise from
analysis in the decision to keep or drop Mowen: 13-25, 13-27, 13-
products or services. 39, 13-42, 13-43
f. Analyze decisions involving multiple
products and limited resources.
g. Discuss the behavioral, implementation,
and legal issues in decision making.
9-10 Operational Budgeting a. Describe the role of budgets in the overall a. Google and understand
Budgeting; Basis for Planning management process. relevant concepts related to the
and Control b. Discuss the importance of strategy and its topic being discussed.
Establishing Budgeted Amounts role in the master budgeting process. b. Go through the Lecture Slide.
c. Outline the budgeting process. c. Go through relevant slides in
Budget Period
d. Prepare a master budget and explain the the Chapter 6 folder.
Master Budget interrelationships among its supporting d. Read Chapter 9 of Mowen and
schedules. Chapter 10 of Atkinson
e. Deal with uncertainty in the budgeting e. Do one exercise at the end of
process each chapter you read.
f. Identify unique characteristics of budgeting Suggested exercise from
for service companies Mowen: 9-36, 9-41, 9-43, 9-
g. Understand alternative approaches to 44, 9-45, 9-47
budgeting (zero-base, activity-based, time-
driven activity-based, and kaizen
budgeting)
h. Discuss various behavioral considerations
in budgeting
11 Standard Costing and Budgetary control a. Develop standard costs for product costing, a. Google and understand
Concepts standard costs and performance evaluation, and control relevant concepts related to the
standard setting b. Record manufacturing cost flows and topic being discussed.
Variance Analysis associated variances in a standard cost b. Go through the Lecture Slide.
system c. Go through relevant slides in
c. Discuss major operating functions and the the Chapter 7 folder.
need for nonfinancial performance d. Read Chapter 10 of Mowen
indicators and Chapter 10 of Atkinson.
e. Do one exercise at the end of
each chapter you read.
Suggested exercise from
Mowen: 10-28, 10-29, 10-33,
10-39
12-13 Capital Budgeting a. Explain the strategic role of capital a. Google and understand
Significance of Decision Rule investment analysis relevant concepts related to the
NPV and IRR Methods b. Describe how accountants can add value to topic being discussed.
the capital budgeting process b. Go through the Lecture Slide.
Capital Rationing and Risk
c. Provide a general model for determining c. Go through relevant slides in
relevant cash flows associated with capital the Chapter 8 folder.
expenditure projects d. Read Chapter 14 of Mowen.
d. Apply discounted cash flow (DCF) decision e. Do one exercise at the end of
models for capital-budgeting purposes each chapter you read.
e. Conduct sensitivity analysis as part of the Suggested exercise from
capital-budgeting process Mowen: 14-26, 14-28, 14-29,
f. Discuss and apply other capital-budgeting 14-32, 14-40
decision models in the context of capital
rationing and risk.
g. Identify behavioral issues associated with
the capital budgeting process
14 Frontiers of Management Accounting a. Define accountings role in the a. Google and understand
TQM and Cost of Quality management and control of quality relevant concepts related to the
Benchmarking & Balanced b. Define quality and the characteristics of topic being discussed.
Scorecard total quality management (TQM) b. Go through the Lecture Slide.
c. Prepare and interpret relevant financial c. Go through relevant slides in
Advanced Manufacturing
information to support TQM initiatives the Chapter 9 folder.
Technology
d. Discuss the use of non-financial d. Read Chapter 7&12 of Mowen
performance data to support TQM and Chapter 2 & 7 of Atkinson.
initiatives
e. Describe and understand techniques that
can be used to detect and correct quality
problems
f. Define strategic performance measurement
and show how centralized, decentralized,
and team-oriented organizations can apply
it.
g. Explain the objectives and applications of
strategic performance measurement in
three common strategic business units: cost
centers, revenue centers, and profit centers.
h. Explain the role of the balance scorecard in
strategic performance measurement.
i. Describe lean manufacturing and changes
in management accounting systems to
support a change to lean