Indian Institute of Management

Jammu

PGP
MANAGEMENT ACCOUNTING
COURSE OUTLINE
TERM II, 2017-2018

Instructor and Contact Information

Instructor Prof. S.C.Bansal

Email bansal@iiml.ac.in
Telephone 0120-6678411

COURSE CREDIT (1.00)

COURSE DESCRIPTION

This course will cover cost accumulation concepts and techniques for product and service costing
and planning and control. Modern management accountants are not only concerned with how cost
data are transformed into cost accounting information but more importantly how to use cost
accounting information to aid managerial goals. It is the case, however, that one cannot effectively
use cost information without a good understanding of how various cost accounting information are
generated. This course will provide students with a good exposure to topics on current and
emerging concepts, practices and developments in total cost management, including activity-based
costing, business process costing, cost-volume-profit analysis under absorption and direct costing,
relevant costing. The course will develop the student's understanding, skill, and analytical ability in
management accounting to the level where he or she can function effectively (and efficiently) as a
professional management accountant in industry. It also intends to develop the ability of the
students to analyse and use cost information in managerial decision making.

COURSE OBJECTIVE

In today's dynamic economic environment, effective managerial decision making requires in-
depth understanding and analysis of cost information. The purpose of this course is to:

1. Recognize the importance of management accounting in an organisation and how it can be

used within the context of the other functions of the company.
2. Identify the characteristics and behaviour of different types of costs and analyse decisions
that influence these costs.
3. Use cost/volume/profit analysis to determine the break-even point, the safety margin and
potential profit in a given situation. Identify and apply different pricing methods.
4. Recognize the application contexts of the various cost accounting systems.

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5. Calculate production costs and analyse decisions that have an influence on these costs, and
interpret them in a decision-making context.
6. Recognize the importance of activity-based costing in the evaluation of organizational
performance.
7. Have a clear understanding of management cost control mechanisms and understand their
importance and limits.
8. Apply divisional budget including cash budget to design master budget.

COURSE LEARNING OUTCOMES

By the end of this course it is expected that the student will be able to:

1. Understand the different cost accounting systems and how they account for product costs;
2. Explain how management accounting tools and techniques can be used to constructively
drive and support process improvement in order to reduce cost, reduce time, improve
quality, and support innovation.
3. Relate revenue and cost management concepts and techniques to particular types of
organisation structures
4. Identify relevant cost information for planning and decision making
5. Understand and apply management control techniques in organisations.
6. Prepare budgets for planning and control
7. Compare actual costs with standard costs and analyse any variances
8. Explain and apply performance measurements and monitor business performance.

ALIGNMENT OF INTENDED PROGRAM & COURSE LEARNING OUTCOMES

SL.No. Programme Objectives Course Learning (CL) outcomes

1 To acquire knowledge and skills in key functional areas CL 1 to 8; Case Discussions &
Assignments
2 CL 1 to 8: Case Discussions &
To internalize the knowledge and skills in key Assignments
functional areas
3 To integrate and apply business knowledge CL 2,6,7,8: Case Discussions &
Assignments
4 To develop a global perspective CL 5, 8: Case Discussions

5 To inculcate values of professionalism, ethical CL 2, 3, 4; Case Discussions

leadership and social responsiveness
6 To master relational and interpersonal communication Class participation, case
skills discussion and assignment

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REQUIRED COURSE MATERIALS AND READINGS

TEXTBOOK

 Basic Text [BT]: Cost Accounting : A Managerial Emphasis, 15th Ed., by Horngren, Datar
and Rajan, Pearson,

 Supplementary readings consisting of articles, conceptual and practical notes, and cases will
be distributed from time to time.
Other Reference Book: To be distributed on sharing and returnable basis
 Managerial Accounting by Garrison, Noreen and Brewer, 12th International Ed., McGraw
Hill International
 Cost Accounting Principles by Raiborn, Cecily A and Kinney, Michael R, 9th ed., Cengage.

EVALUATION

Evaluation scheme for MANAC is designed to examine participants’ knowledge, analysis, and
managerial responsiveness to given business situations.
 Examinations: There will be quizzes from time to time and two term
examinations.
 Class Participation and assignments: Students are responsible for all materials
covered and readings including numerical assigned. Be prepared to answer certain
questions that had been emphasized in prior classes or from the reading
assignments. Your performance and participation will then be used to determine
your participation mark. Each assignments needs to be submitted by due date and
time.

GRADING SCHEME

25 Marks
Mid Term Exam
25Marks
End Term Exam
20 Marks
Quizzes
20 Marks
Project and Assignments
10 Marks
Class participation and presentations
100 Marks
Total

ACADEMIC DISHONESTY

Academic dishonesty or misconduct is cheating that relates to an academic activity. It is a violation

of trust between the Institute and its stakeholders. Plagiarism, fabrication, deception, cheating and

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sabotage are examples of unacceptable academic conduct. Please consult the PGP Manual for the
section on academic dishonesty

COURSE SCHEDULE

Duration of each session: 90 minutes

S No TOPICS READINGS EXERCISE/CASE
1 Cost concepts, purpose, and Chs. 1 & 2 (BT) Exercises
application
2 Costing & Control of Ch. 2 (BT) and Case: Dixon Company
Materials and Labour Reading material to be
distributed in the class
3 Factory Overheads: Ch. 15 (BT) Case: Star Engineering
Classification, distribution Company
and Control
4 Allocation of-departmental Ch.15(BT) and Exercises
costs, common costs. supplementary material
5 Master Budget: Operating Ch. 6(BT) Case: Hypothetical Ltd.
and Cash Budgets
6 Activity Based Costing and Ch.5 (BT) Case: Destin Brass Product
Activity based management
7 Job –order costing and unit Ch. 4(BT) Exercises
costing
8 Process Costing. Ch. 17 (BT) Case: Chemical Engineering
Factory
9 Cost Book Keeping
Case: Salem Telephone
10 Cost Volume Profit Analysis Ch. 3 (BT)
Company
Applications of CVP &
11 Chs. 3 & 7 (BT) Case: Sulphuric Acid Plant
Flexible Budgets
12 Profit Planning Ch.6 (BT) Case: Roysentien Breweries
Decision making and Case: Liquid Chemicals
13 Ch. 11 (BT)
relevant cost information Company
14 Trial Orders and Pricing Ch.13 (BT) Case: Indian Electricals Ltd.
Pricing decisions and cost Case: Indian Electricals Ltd.
15 Ch.13 (BT)
management (Contd.)
Cost allocation: Joint
16 Ch. 16 (BT) Case: Rajnigandha Perfumeries
products and By-products
Ch.7 & 8 (BT), Additional Exercises
Standard Costing: Variance
17 material to be distributed in
Analysis-1
the class.
Ch.7 & 8 (BT), Additional Exercises
18 Variance Analysis-II material to be distributed in
the class.
Reading material to be Exercises
19 &
Time Value of Money distributed in the class well
20
in advance

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Class Participation
Class participation is an integral part of the learning experience. It is expected that every student
will be prepared for each class and be a willing participant in the discussions and case studies
analysis. Students will be given marks for responding to questions raised by other students and the
instructor. Marks are also given for giving insightful comments based on your reading, analysis and
pre-class preparation. General comments with few additional inputs will get very low scores.
Consistent participation is expected.

Assignments

The primary objective of homework assignments is to help you review the lecture material before
attending class. A few assignments will follow class. Written assignments are declared in the class
as well as posted through mail. The assignments will be a combination of computational problems,
and short cases. Assignments will be graded based on your effort and your accuracy in completion.
There are four scheduled assignments in total; you are required to submit all of them. Students may
work on the home works in small groups (maximum of 3 students). In fact, I encourage students to
submit all assignments in handwritten format only.

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