SIVA SIVANI INSTITUTE OF MANAGEMENT

MANAGEMENT ACCOUNTING

Batch: TPS SEC-A&B

Term: III
No of Sessions : 27
Prerequisite: Fair understanding of Financial Accounting and Analysis and Financial
Management is required.
Facilitator: D Sreekanth
Email: sreekanth@ssim.ac.in

Course Objective

The course is titled Management Accounting and it is designed to familiarize the students with
important management accounting terminology, cost accounting concepts and costing methods.
It includes such topics as cost behaviors, standard costing, target costing, activity thinking,
budgeting, variance analysis, and performance measurement and assessment, and it presents
them through the use of an organizational framework focused on their relevance to operating and
strategic decisions.

Basic Text

Hongreen .C.T., Cost Accounting, Pearson Education Ltd., New Delhi.

Supplementary books

1. Blocher, Cost Management , TMH Publications.

2. Hansen and Mowen, Cornerstones of Cost Management 2nd edition Cengage

Publications, New Delhi, 2013.

Course requirements

The students will be assigned readings from the textbook as well as reading material and they
will be expected to come to class prepared and also take part in class room deliberations.
Attendance is compulsory. In my experience, attendance is highly correlated with the absorption
of academic materials.

Pedagogy

The pedagogy to be followed will be completely based on the students follow up. It will be mix
of case based lecture, class discussion, and students presentation. The majority of the learning
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should happen off the classroom, and the classroom sessions will be used for discussing what has
been learnt outside the classroom. Very heavy importance will be given for students preparation
for the classes. Most of the sessions will be based on problems solving and case, which has to be
first tried / discussed by the students as a group on their own. The Facilitators effort will be
focused in providing a learning environment for the student rather than spoon feeding.

Grading

The course contains the following components for evaluation:

Continuous Internal Assessment 45 M

Class attendance 05 M
End term exam 50 M
Total 100M

Continuous Internal Assessment (CIA)

The students are assessed based on the following components as part of CIA. Those are quizzes,
assignment, case analysis and try yourself problems. The marks for each components is as
follows;
Mid-term exam 20M
Quizzes 10M
Case analysis 10M
Try yourself problems 05M

All the components of the above mentioned evaluation criteria would be administered on group
basis except for midterm exam, quizzes and stock market game. Though it is a team effort,
assessment would be done individually where ever necessary with suitable method of
assessment. The students are expected to form in groups as per their convenience by considering
the following guidelines, if not ensure that the group maintains diversity in nature.
Each group should not have more than 3 members.
The group should have a minimum of one member from graduation backgrounds like
B.com, B.Sc., BBA, B.Tech, BA and if any other (there may be exemptions for this
depends on the merit of the case)
All the members in the group are expected to contribute for the performance of the group
as a whole and the marks that the group would get is given to the each member of the
group.
The groups are expected to form on the first day of the session begins and submit their
details to the CR in turn the same should be handed over to the course facilitator by
evening. The details should cover the aspects like the name of the student and his/her roll
number and their basic degree (any other qualification).

Midterm exam

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Midterm examination administered in the middle of a trimester term consisting set of questions
or exercises evaluating skills and knowledge acquired during class discussion. The exam will be
closed-book and closed notes. There are no midterm exam make-ups if you are not in class the
day of exam No Exceptions.

Class tests/Quizzes

Tests/Quizzes are designed not only to give a student encourage to read main text book, but also
to make the student habit to update with the recent business and economics information. During
the term - there will be two to six quizzes/tests. The quizzes/tests will be closed-book and closed
notes. They will typically require short answers that are directly related to recent class modules
and current affairs knowledge. There are no quiz/test make-ups if you are not in class the day of
a quiz/test No Exceptions.

Case studies

The case studies and problems are to be submitted on slot. It can be submitted in a print form or
a neatly hand written one. Late submissions may attract no marks or zero marks.

Case analysis

Cases are to be discussed in class. Most cases do not have "right" answers. Being "right" or
"wrong" should not be of your concern, when participating or deciding whether to make a
comment. Dont be afraid to disagree with comments by your fellow students (or facilitators
comments, for that matter). If there is complete agreement on case solutions, then something is
wrong! Critical discussion and disagreement are to be expected and encouraged. A case brief (as
word document) by each group has to be prepared.
Three to five cases are planned to discuss depends on class progress and students response and
the cases would be circulated to the students well in advance.
All the groups are expected to come prepared with their own workings in excel sheet (where ever
necessary) kept ready for presentation.

Case analysis structure

Case briefs should not be less than six pages:

A suggested structure for a case brief: (1) Details of background knowledge required for solving
the case - one page (2) Case back ground - half page (3) Various levels of problem identified in
the case - one page (4) Details of your analysis and your interpretations - 2 pages (5) specific
recommendations and implementation - one page (6) Final conclusion - half page.
Exhibits, figures, and numerical calculations should be attached on separate pages. (If necessary)

In case solving, the groups are expected to apply the tools and principles of Investment
Management, as well as all other necessary skills, to decide how to resolve the problem
identified in the case. The group can use necessary assumptions in solving the case. The
assumptions have to be strongly supported by logical explanations. Be specific and assertive.
Each group is expected to come with PPT presentation on the cases given. The presentation
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should cover understanding of the problems, analysis (show the worksheet), comments and
conclusions. Any one from the group randomly called to make presentation. The presentation and
case discussion mark (for the group) will be provided only on the performance of the member
who presents it. The prepared case brief (word file), workings (spread sheet file), and
presentation (power point file) have to be submitted to the course facilitator on or before the
scheduled time.

Evaluation criteria: The case will be evaluated by the facilitator and marks are awarded in
the following pattern:

1 Quiz on case 5M
2 Details of background knowledge required for solving the case and case back ground 1M
3 Various levels of problem identified in the case and details of your analysis and your 2M
interpretations
4 Specific recommendations, implementation, final conclusion and presentation 2M

Problems

Try yourself problems are to be practiced regularly. The problems would be informed
periodically depending on the class progress. All the students need to submit solutions neatly
handwritten with their own workings in excel sheet (where ever necessary) which carry 5 marks.

Class Etiquette

The purpose of etiquette rules is to ensure that no one interferes with the learning of others

Attending a college class demands the same degree of discipline and professional behavior
expected in the professional work world. Through class participation, peers are able to learn from
each other and thus expand their knowledge base and exposure to various points of view. This
type of learning is considered primary to the adult learning experience. With this in mind,
sharing your views and knowledge, asking questions, and being respectful of differing views is
expected. 09 behaviors that will help you to be successful in this class include:
1. I expect you to be on time and attending class regularly
2. Active listening and learning
3. Reading the syllabus and assigned readings before each class session
4. Participating in class/group activities with enthusiasm
5. Doing only class activities during class
6. Avoiding side conversations
7. Completing assignments on time
8. Keeping your cell phone and/or pager on silent mode during class
9. Minimize wandering in and out of the classroom.

As a general rule you may not use other handheld communication devices in class. I allow
the use of laptops for specific limited purposes such as note-taking, problem solving and for
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practise. At no time are you permitted to perform any email related activities or e-texting in
class.

Important Notes:

All course participants are expected to have read the relevant textbook chapters, articles
and cases before commencement of class. Plagiarism will not be tolerated.

Session Plan

Course: Management Accounting

PGDM-TPS-NR-SEC-A & SEC-B
Trimester Dates : Starting Date : 03-03-2014 to Ending Date : 10-05-2014

Sessi Session Content Chapter No Page No Additional

on Readings
No
1 Introduction to Cost Management 1 1-12 Vital Truths
Financial Accounting vs Cost About Managing
Management Factors Affecting Cost Your Costs
Management Ames and
Hlavacek HBR
Article Jan-
Feb, 1990 - Soft
Copy.
2 Basic Cost Management Concepts 2 26-35, Case Let
Cost Cost Assignment Direct 46-49 Breezy Boat
Tracing Allocation Product and Company Hard
Service Costs Copy
3 Different Costs for Different Purposes 2 36-52 Chapter end
Cost Sheet Traditional vs Activity exercises and
Based Cost Management Systems - problems -54-71
Review Problems and Exercises
4 Cost Behaviour Fixed and Variable 3 74-83 Case Study
Costs Mixed Costs Step-Cost Fine Print
Behaviour Flexibale Resources vs Company A
Committed Resources Hard Copy
5 Methods of Determining Cost 3 86-104 Case Study
Behaviour Quantitative Methods for Indian Optics Inc
Separating Mixed Cost into Fixed and Kellog School
Variable Components The High- of Management
Low Method Scatterplot Method Case Study
Using Regression Programs etc., Tuba Accessories
(Microsoft Excel Data Analysis and
Solver )
6 Multiple Regression Learning Curve 3 105112 Chapter end
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 and Nonlinear Cost Behaviour Exercises 116-
Cumulative Average Time Learning 137
Curve Incremental Unit-Time
Learning Curve
7 Activity Based Costing Unit-Level 4 140-148 Chapter end
Product Costing Overhead exercises 175-
Assignment Plant wide Rates 185
Departmental Rates Limitations of HBR Article :
Plant wide and Departmental Rates Measure Costs
Right : Make the
Right Decisions-
R. Cooper &
Kaplan
September-
October, 1988
8 Activity-Based Costing System 4 155-165 Chapter end
Activity Definition Activity Exercises 186-
Classification Assigning Costs to 198
Activities
9 Integrative Exercises 1-4 200-203
10 Product and Service Costing : Job- 5 204- 214 Chapter end
Order System Characteristics Exercises 234-
Setting Up the Cost Accounting 240
System Cost Accumulation Cost Case Study:
Measurement Cost Assignment Lambeth Custom
Cabinets
11 Job Order Costing System : General 5 215-220 Chapter end
Description Material Requisitions Exercises 241-
Job Time Tickets Overhead 248
Application Unit Cost Calculation
12 Process Costing Basic Operational 6 254-268 Chapter end
and Cost Concepts Process Costing Exercises : 291-
with No Working Progress Process 294
Costing with Ending Work-In-
Progress
13 FIFO Costing Method Weighted 6 269-282 Chapter end
Average Costing Method Treatment Exercises : 295-
of Transferred-In-Goods Operation 304
Costing
14 Allocating Costs of Support 7 312-320 Chapter end
Departments and Joint Products An Exercises : 354-
Overview of Cost Allocation 364
Allocating One Departments Costs to
Other Departments
15 Choosing a Support Department Cost 7 325-335 Exercises 365-
Allocation Method Direct Method 373
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 Allocation Sequential Method of
Allocation Reciprocal Method of
Allocation Total Cost of Support
Departments Comparison of Three
Methods Departmental Overhead
Rates and Product Costing
16 Budgeting for Planning and Control 8 375-380 Chapter end
Role of Budgeting Purposes of Exercises 420-
Budgeting Budgeting Process 426
Types of Budgets- Forecasting Sales
Forecasting Other Variables
17 Preparing the Operating Budget 8 381-394 Exercises - 427-
Sales Budget Production Budget 442
Direct Materials Purchase Budget
Direct Labour Budget Cost of Goods
Sold Budget etc.,
18 Preparing the Financial Budget Cash 8 395-417
Budget Components of Cash Budget
Budgeted Balance Sheet Static
Budgets versus Flexible Budgets
Characteristics of a Good Budgetary
System
19 Strategic Cost Management Basic 11 567-573 Exercises: 603-
Concepts Strategic Positioning 608
The Key to Creating and Sustaining a
Competitive Advantage Cost
Leadership Differentiation
Focusing Operational Activities
20 Value Chain Analysis Life Cycle 11 574-597 Exercises: 609-
Cost Management Just-In Time 620
(JIT) Its effect on the Cost
Management System
21 The Balanced Scorecard: Strategic 13 680-688 Exercises : 701-
Based Control Basic Concepts 706
Strategy Translation Financial
Perspective Customer Perspective
Process Perspective
22 Innovation Process Operations 13 689-699 Exercises: 707-
Process Learning and Growth 710
Perspective Linking Measures to
Strategy Strategic Alignment
23 Cost Volume-Profit Analysis (CVP) 16 822-832 Chapter End
Basic Concepts for CVP analysis - Exercises : 856-
Break Even Point Equation Method 861
for Break Even and Target income
Contribution Margin Approach -
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 Target Profit in Units and Sales
Revenue
24 Break Even Point and Target Income 16 833-838 Chapter end
in Sales Revenue Targeted Income Exercises : 862-
as a Percent of Sales Revenue 867
Comparison of Two Approaches
Multiple Product Analysis Sales Mix
25 Graphical Presentation of CVP 16 839-850 Chapter end
analysis Assumptions of CVP Exercises : 868-
Analysis Changes in CVP analysis 875
Case Study :
Breeden
Electronics -A
26 Activity Resource Usage Model and 17 877-894 Chapter end
Tactical Decision Making Decision Exercises : 901-
Making Process Relevant Costs and 917
Revenues Make-or-Buy Decisions
Special Order Decisions etc.,
27 Pricing and Profitability Analysis 18 921-940 Chapter end
Basic Pricing Concepts Cost and Exercises : 957-
Pricing Policies Measuring Profit 973
Analysis of Profit Related Variances
Limitations of Profit Measurement

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