INSTITUTE OF FOREIGN TRADE AND MANAGEMENT
Department of Management Studies
Instruction Division
MBA Second Semester
Session 2006-2007
Course Handouts

Paper Code : MBA 211
Paper Title : Management Accounting
Instructor : Tribhuvan Pratap Singh


Paper Description: This paper deals with various concepts of management accounting such as Marginal costing, Budgeting and Responsibility Accounting along with some Neo Concepts of activity based costing for decision making. The whole syllabus is divided into five units which deal with various concepts in detail. This paper enables the students to learn various accounting concepts to be used while decision making for the future and for evaluating the past performance against the set standards as well.

Paper Objective: The main objective of this paper is to introduce the management accounting to the students as an effective tool for sound decision making. This paper explains them, how the accounting information and statements can be used for effective and efficient financial decisions. The greater details of the topics covered; enable the students to establish the cause and effect relationship between the managerial decisions and their impact on the financial health of the organisation.

T1 : Financial and Management Accounting Maheshwari S.N.

Reference Books:

R1 : Management Accounting Pillai and Bagavathi
R2 : Management Accounting Pandey I. M.


Unit
Objective
Topics to be covered
References
Unit 1
To introduce management accounting and various other cost concepts to be used for decision making.
Introduction : accounting for management
Text book:
Page :
A.03 to A.16.

Reference 1:
Page:01 to 25
Role of cost in decision making
Management Accounting and Cost Accounting as internal control tools
Types of cost (cost concepts): Full costing
Overhead allocations
Preparation of cost sheet.
Unit 2
To enable the students to analyze and understand cost dynamics with the help of various cost analyses and their implementation in future decision making.

Marginal Costing: Cost, Volume analysis
Text book:
Page No:
C.147 to C.222.

Reference 1:
Page: 283 to 358
Profit analysis
P/v ratio: analysis and implications
Concept and uses of Contribution
Break-even point and its analysis for the various types of decision-making
Single Product Pricing, Multi Product Pricing
Replacement, sales analysis.
Differential costing and Incremental costing: (concepts)
Uses and applications of differential costing.
Method of calculation of above cost concept and its role in management decision making.
Unit 3
To introduce the budgeting to the student as a tool to control and following the standards. This unit also helps them to prepare various budgets for different areas of management and activities.
Budgeting: Concept of Budget; Budgeting and Budgetary control, Types of budget
Text book:
Page No:
C.01 to C.59.

Reference 1:
Page: 449 to 482
Static and Flexible budgeting
Preparation of Cash budget
Sales budget, Production budget
Materials budget, Capital expenditure budget
Master budget, Advantages and Limitations of Budgetary Control
Standard Costing: Concept of Standard Costs, Establishing Various Cost Standards
Text book:
Page:
C.60 to C.76

Reference 1:
Page: 366 to 448
Calculation of Material Variance
Labour variance
Overhead Variance; its Applications and Implications.
Unit 4
To enable the students to understand the role of responsibility accounting and transfer pricing in the growth of modern organisations.

Responsibility Accounting: Concept and various approached to Responsibility Accounting
Reference 1:
Page:
516 to 521.
Concept of Investment Center
Cost Center, Profit Center
Responsibility Center and its managerial implications
Transfer Pricing –Multinational Transfer Pricing
Market Based Transfer Pricing
Cost-Based Transfer Pricing
Cost of Quality and Time.
Unit
Objective
Topics to be covered
References
Unit 5
To make the students aware of various Neo cost concepts developed in the modern era of complex business activities.
Neo concepts for decision making: Concept, distinctive features of Activity Based Costing

Cost drivers, Cost of activities
Cost object such as product, service and customer.
Cost management: Concept, Strategies and Applications.
Value Chain Analysis
Target Costing, Life cycle costing.

Total no. of sessions : 40 (regular) and 5 (end unit sessions).
Presentation aids : OHP slides, PowerPoint slides for LCD projector.
Assignments : at the end of each unit.
Class tests : as per university schedule.
Consultation hours : Students are welcome for consultation during
prescribed hours in the class.
Make up exam : At the discretion of instructor in charge.





Tribhuvan Pratap Singh (Course Instructor)