Management Accounting

Paper Code : 412503 ——
Credits : 4
Paper Title :
Class Hours : 120 hrs.
Management Accounting
1. Introduction: Definition of Management Accounting and Its Relation with Financial and
Cost Accounting, Management Accounting and Decision Making, Importance of Ethics,
Management Accounting in Service and Non-profit Organizations, Cost-Benefit and
Behavioral Considerations, Management Process and Accounting, Planning and Control for
Product Life Cycles and the Value Chain, Career Opportunities in Management Accounting,
Changes in Business Processes and Management Accounting, Management Accounting
Profession.
2. Cost Concepts and Classifications: General Cost Classifications- Cost Classifications
on Financial Statements – The Flow of Cost in a Manufacturing Company- Cost
Classifications Predicting Cost Behavior- Cost Classifications for Decision Making.
3. Absorption and Variable Costing: Variable and Absorption Costing, Variable vs.
Absorption Costing: Operating Income and Income Statements, Absorption Costing and
Performance Measurement, Comparing Inventory Costing Methods: Absorption &
Variable, Costing, and Actual, Normal & Standard Costing; Reconciliation of profit under
both methods.
4. Cost-Volume-Profit Relationships: Identifying Resources, Activities, Costs, and Cost
Drivers, Variable and Fixed Costs, CVP Analysis: Computing the Break-Even Point (BEP),
Graphing the BEP, Changes in Fixed Expenses, Changes in Unit Contribution Margin,
Target Net Profit and an Incremental Approach, Multiple Changes in Key Factors;
Additional Uses of CVP Analysis: Best Cost Structure, Operating Leverage, Margin of
Safety, Contribution Margin and Gross Margin; Sales-Mix Analysis, Impact of Income
Taxes.
5. Relevant Costs for Decision Making: Management’s Decision-making Process
Identifying Different Costs and Benefits- Different Costs for Different Purposes-The
Incremental Analysis Approach-Types of Incremental Analysis- Accept an Order at a
Special Price, Make or Buy, Sell or Process Further, Retain or Replace Equipment,
Eliminate an Unprofitable Business Segment, Allocate Limited Resources.
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6. Budgeting and Budgetary Control: Budgets and the Organization: Potential Problems in
Implementing Budgets, Planning Horizon (Strategic Plan and Long-Range Planning): Types
of Budgets: Master Budget, Components of a Master Budget: Operating Budget/Profit Plan
(Sales budget, Purchases budget, Cost of goods sold budget, Operating expenses budget) and
Financial budget: Cash budget, Budgeted Income statement and preparing master Budget:
Activity Based Budget.
7. Flexible Budget: Flexible Budget and Fixed Budget-Characteristics of Flexible Budget
Advantages of Flexible Budget-Segregation of Semi-variable Cost-Preparation of
Flexible Budget.
8. Standard Costing: Concepts-Standards and Budgets-Advantages of Standard Costing
Analysis of Material, Labor and Overhead Variances.