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BMS - DSC - 4 Cost and Management Accounting

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27 views

BMS - DSC - 4 Cost and Management Accounting

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goutam.rana3060
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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DSC 4: COST & MANAGEMENT ACCOUNTING

Course Objective(s): The rapidly changing business environment requires managers to make
informed decisions. This paper will equip the students with cost and management accounting
concepts, techniques and practices which will help them in planning and controlling business
operations and management decision making.

Learning Outcomes:
After successfully completing this course, students will have the knowledge and skills to:
⮚ Understand and distinguish various types of costs in manufacturing and service
organizations.
⮚ Determine the costs of products and services.
⮚ Identify relevant costs for decision making and undertake different analysis of various
types of decisions.
⮚ Prepare budgets and analyse variances from standard cost to identify areas in need of
control.

Course Contents:
Unit 1: Nature, Scope of Management Accounting (3 Weeks)
Meaning, nature and scope of Cost Accounting and Management Accounting; Comparison
between Cost Accounting & Management Accounting; Cost Control, Cost Reduction& Cost
Management, Components of Total Cost & Preparation of Cost Sheet. Cost Ascertainment: Cost
Unit and Cost Center. Overheads: Meaning, Allocation & Apportionment.
Classification of Costs: Fixed, Variable, Mixed Cost; Product, and Period Costs; Direct and
Indirect Costs; Relevant and Irrelevant Costs; Shut-down and Sunk Costs; Controllable, and
Uncontrollable Costs; Avoidable, and Unavoidable Costs; Imputed / Hypothetical Costs and Out-
of-pocket Costs; Opportunity Costs; Expired, and Unexpired Costs.

Unit 2: Cost-Volume-Profit Analysis (5 Weeks)


Marginal cost, Contribution per unit and Total contribution. Profit Volume Ratio, Break-even
Analysis: Break-even Point, Composite Break-even Point, Cash Break-even Point, Margin of
safety.
Relevant Costs and Decision Making such as: Key Factor, Pricing, Product Profitability, Dropping
a product line, Make or Buy, Export Order, Shut down vs. Continue operations.

Unit 3: Budgets and Budgetary Control (3 Weeks)


Meaning, Steps in Budgetary Control, Types of Budgets: Sales budget, Production Budget, Raw
material consumption Budget, Raw Material Purchase Budget, Overhead Budgets, Cash Budget,
and Master Budget. Fixed and Flexible Budgets, Zero based budgeting.
Unit 4: Standard Costing and Variance Analysis (4 Weeks)
Meaning of Standard Cost and Standard Costing, Advantages, Limitations and Applications;
Material Cost Variance, Price and Usage Variance and Mix and yield Variance; Labor Cost
Variance, Rate and Usage Variance, Idle time, Mix and Yield variance. Introduction to the concept
of Target Costing, Life Cycle Costing, Quality Costing, and Activity based Costing.

Suggested Readings
1. Horngren's Cost Accounting: A Managerial Emphasis. Pearson.
2.Arora, M.N. (2016) A Textbook of Cost and Management Accounting. Vikas Publishing House
Pvt. Ltd.
3. Maheshwari, S.N. and Mittal, S.N. (2016) Cost Accounting: Theory and Problems. Shree
Mahavir Book Depot.

Additional Readings
1. Arora, M.N. & Katyal Priyanka, Management Accounting: Theory, Problems & Solutions,
Himalaya Publishing House
2. Lal, Jawahar. Advanced Management Accounting: Text, Problems & Cases, Sultan Chand &
Company Ltd.

Note: Latest edition of the readings may be used.

Teaching Learning Process:


Class room lectures, Case study discussion, Numerical problem solving, Class presentation on the
assigned topic by students - individually or in groups, Workshops and Tutorials.

Assessment
Total Marks: 100
Internal Assessment: 25 Marks
End Semester University Exam: 75 Marks
The Internal Assessment of the course may include Class participation, Assignments, Class tests,
Projects, Field Work, Presentations, amongst others as decided by the faculty.

Key Words
Cost Sheet, Budgetary control, C.V.P Analysis, Decision Making, Management Accounting.

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