Management Accounting

Post-Graduate Diploma in Management (2023-25)
Executive Batch
Area: Finance
Course Title – Managerial Accounting
Course Faculty:
Prof Ashish Varma : avarma@imt.edu; 0120-4083453, Room # 2 , Faculty Wing 16

Course Description
In the emerging competitive business environment, an excellent managerial accounting system is
imperative for organizations to understand and manage their cost structures, as well as make better
decisions for achievement of corporate goals. As business success cannot be left to luck or chance
factors, it is important that all managers from finance as well as marketing, operations, human
resources, technology and other functions should understand the implications of their decisions and be
able to evaluate alternative strategies taking into account the accounting and other relevant
information. This
course therefore, deals with firms’ internal accounting systems and their use in decision-making,
planning and control.
The course would help participants in understanding the relevant concepts and develop skills in using
cost accounting information for planning of business operations and decision making including
product mix decision, pricing strategy, choosing between alternatives and performance evaluation.
Major topics include cost classification, cost behavior, cost-volume-profit analysis, budgeting system
& variance analysis, cost analysis for short-term decision-making, Standard Costing, Activity Based
costing.
The role of managerial accounting has evolved to a deeper and greater involvement in almost all
aspects of management including strategy formulation, decision making, planning and control;
indeed, management accountants are now expected to play a vital role in evaluating growth strategies,
valuation of businesses, mergers and acquisitions and so on. Also, as businesses become more and
more globalized, issues related to responsibility accounting and evaluation of divisional performance
are assuming greater significance. The course will strive to cover the traditional as well the recent
developments in the relevant topics.
Today’s business world also need to appreciate the challenges being faced due to unprecedented
impact of climate change, due to exponential growth in economic activity over past two decades. This
calls for management accountants to understand the implication of climate change on the business
operations and decisions. The session on non-financial information (session 2&3) and sustainability
accounting (session 16) will help students understand the impacts of externalities on business
operations and help them apply the same for take better and sustainable business decisions to reduce
firm’s carbon footprint.
Learning Objectives
i. Recognize the importance of management accounting in an organization and how it can be
used together with other functions of the company.
ii. To use management accounting techniques for business planning, control and performance
measurement.
iii. Calculate costs and analyze decisions that involve cost data and financial data, and interpret
them in a decision-making context. (Goal 1.1)
iv. To develop an understanding of the costing systems, including cost classification, and cost
behavior for planning and control
v. To excel in decision making by the analysis of financial and cost data.
Pedagogy
The course will be delivered through a blend of lectures, exercises, case discussions, industry/research
based projects, assignments and students’ presentations. The success of the course is a joint
responsibility of the instructor and the students and hence it is important that you should regularly
attend classes and actively participate. In addition to the prescribed reading materials, additional
readings and cases may be suggested/distributed in the class from time to time. Keeping a track of
related corporate developments through business journals/newspapers is essential.
Course Requirements
i. As the success of the course is the joint responsibility of the instructor and the students, it is
important that prior to each class, students must read the relevant text/readings and prepare
for case-discussions, exercises and assignments. The students are encouraged to participate in
class discussion, bring out live illustrations of concepts and contribute to group learning.
ii. Case discussions are an important part of the course. Typically, a case would ask you to
identify the major issues/problems, evaluate alternative strategies or courses of action using
qualitative and quantitative analysis, and present your recommendations. The class will be
divided into a number of groups and for assigned cases, each group will be required to
submit case analysis report and power point presentation on schedule.
iii. Evaluation of Class participation will be based on the value you add to the class discussions
through your questions, analytical inputs and positive contribution.
iv. The nature of the subject matter requires significant amount of numerical computations.
Students are expected to bring a simple non-programmable calculator to every class session
and to all examinations. Students are not allowed to use/carry cell phones into the class room
and exam-halls.
Evaluation
1. QUIZ: 2 Quiz (10 x 2= 20 marks) (Faculty will share the date of the QUIZ)
2. Group Project: 30 marks (Written Report + Presentation+ Viva)
3. Class Participation: 10 marks
4. End Term Exam: 40 marks
Specific Assessment Intended objectives to be assessed
Method Weight 1 2 3 4 5 6
( Goal 1.1)*
QUIZ 20% √ √ √ √
Group Project / 30% √ √ √ √

Assignment
Class Participation / 10% √ √ √ √
Viva / Presentation
End Term 40% √ √ √ √ √
Examination
*Demonstrate technical and analytical capabilities.
Recommended Textbook
Ronald W. Hilton, Managerial Accounting, McGraw Hill Education. Latest Edition
Reference books:
Anthony RN, Hawkins D.F, and Merchant K.A., Accounting: Text and Cases, TMH.
Hansen Don R & Mowen MM, Cost Managenment – Accounting and Control, Thomson
James Jiambalvo, Managerial Accounting, Wiley Student Edition
Colin Drury, Management & Cost Accounting, Thomson Learning-Taxmann India, Fifth Edition
Course Outline: Session/Topic/Reading Material/Reference
Session Topic Reading

Material/C
ase
1 Management Accounting- An overview (Nature, objectives, Chapter 1
scope and significance).
 Scope of management accounting, financial accounting
and cost accounting.
 Scope of management accounting in organizational
decision making process
Cost concepts (Basic terminology)
2,3 Introduction to the concept of cost object, cost drivers and cost Chapter 2,
pools. 6
Cost classification and cost behavior: fixed, variable and semi-
variable costs.
Framework of Cost Sheet.
Use of non-financial information and qualitative information in
business decision making ( Triple Bottom Line ; Sustainability)
4,5 Overhead Allocation And Apportionment using traditional cost Chapter 3
system
 Homogenous Plant rates and Department rates

Over and under absorption of overheads
6,7 Introduction to Activity Based Management (ABM); Chapter 5
Activity Based Costing (ABC)
8.9  Absorption and Variable costing: Chapter 7,
8
 Cost-volume-profit analysis: break-even point including
multiple product breakeven point
 Margin of safety
Profit planning for earning a target income
10,11,12 Relevant cost and irrelevant cost for decision making (including Chapter 14
sunk cost, opportunity cost, incremental cost, differential cost,
marginal cost)
 Pricing and product mix including limiting factor
 Make or buy decisions
 Special order costing
 Export order costing
Other decision making
13,14 Budgetary control: Nature, Uses and advantages of budgets. Chapter 9,
Choice of forecasting tools and assumptions in the budgeting 11
process.
 Functional and Master budgets.
 Fixed and Flexible budgets,
Cash Budget
15 Standard Costing: Meaning and significance. Chapter 10
Meaning and relevance of Variance Analysis
Determination of standard costs
Material, labour, overhead and sales variances
16 Introduction to Target costing and Life Cycle Costing Chapter 15
17 Introduction to Sustainability Accounting
18,19 Introduction to Responsibility Accounting and Performance Chapter
Evaluation Metrics such as ROI , Residual Income and 12,13
Economic Value Added (EVA)
The concept of Cost Centre, Profit Center, Revenue Center and
Investment Center for performance evaluation.
20 Key learnings from the course and Group Project Presentations

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Post-Graduate Diploma in Management (2023-25)

Course Title – Managerial Accounting

Prof Ashish Varma : avarma@imt.edu; 0120-4083453, Room # 2 , Faculty Wing 16

Group Project / 30% √ √ √ √

Ronald W. Hilton, Managerial Accounting, McGraw Hill Education. Latest Edition

Course Outline: Session/Topic/Reading Material/Reference

Session Topic Reading

 Homogenous Plant rates and Department rates

20 Key learnings from the course and Group Project Presentations

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