COURSE TITLE ADVANCED COST AND MANAGEMENT ACCOUNTING CREDITS 4

COURSE
MGT 3125 COURSE CATEGORY CORE L-T-P 4-0-0
CODE
LEARNING
Version 1.0 Approval Details ACM BTL-5
LEVEL
ASSESSMENT SCHEME
Semester End
During Semester Assessment (DSA)
Examination
MSE DSA Components Attendance SEE
20% 25% 5% 50%
• This subject aims to create a good understanding on various tools for analysis and
interpretation like ratio analysis, statement analysis and cash flow analysis. In addition,
it also introduces to the students, the tools for decision making such as cost-volume
profit analysis and the applications of marginal costing. It provides an overview of the
Course
control techniques such as budgetary control, standard costing and variance analysis.
Description
• Since, cost control and cost reduction have assumed greater significance in view of the
recent recession elsewhere in the world and the consequent slowdown in our own
country, understanding cost concepts, costing methods and techniques, dissemination
of costing information have become integral part of reporting.
• Understand how to furnish information about the firm's economic resources, claims
against those resources, owners’ equity, and changes in resources and claims
• Understand how cost control achieve the targeted cost objectives through the
realization of predetermined cost targets to reduce costs
Course • Understand the significance of cost control. Understand the various tools and
techniques of costing.
Objectives
• Understand the functions of each responsibility center within an organization and what
are the inter-linkages between those centers
• Be able to identify financial strengths and weaknesses of a business through appropriate
analysis.

Upon completion of this course, the students will be able to

1. Understand and explain the significance of Financial Statements, annual reports and the
role of management accountant in managing, analyzing and interpreting the company’s
results.
2. Analyze and interpret the financial statements using ratio analysis to understand the
Course
financial performance and position of the company.
Outcome
3. Understand and exhibit their knowledge on various cost ascertainment techniques,
methods and valuing inventory, labour and overheads.
4. Evaluate different capacity levels budgets to decide on the production capacity which given
the maximum profit and estimate cash flows using cash budget.
5. Establish cost standards and analyze material and labour variances for managerial decision
 making.
6. Understand the relevance of adopting Marginal Costing & CVP analysis in business
operations, interpret the results and make prioritized evidence-based recommendations
for management action.
Prerequisites: LVP – Business Accounting
CO, PO AND PSO MAPPING

CO PO -1 PO-2 PO-3 PO-4 PO-5 PO-6 PO-7 PO-8 PSO-1 PSO-2 PSO-3

CO-1 2 - - - - - - - - - -
CO-2 - 3 - - - - - - - - -
CO-3 - - - 3 - - - - - - -
CO-4 - - - 2 - 2 - - - - -
CO-5 - 3 - - - - - - - - -
CO-6 - - - - 2 - - - - - -
1: Weakly related, 2: Moderately related and 3: Strongly related
MODULE 1: INTRODUCTION TO CMA (2 Sessions)
Cost & Management Accounting: Evolution, Meaning, Objectives and Scope. Relationship
among Cost Accounting, Financial Accounting and Management Accounting. Role of CO-1
Management Accounting in Management Process.

MODULE 2: CORPORATE FINANCIAL REPORTING (2 Sessions)

Objectives of Corporate Financial Reporting, Profit and Loss statement, Balance Sheet and
Cash Flow Statement as per the Schedule III of Companies Act of 2013 (Only theory). GAAP
(Indian and US perspective), Objectives and principles of IFRS (International Financial CO-1
Reporting Standards) and Indian Accounting Standards (IND AS). Annual Report and its
Contents.

MODULE 3: ANALYSIS OF FINANCIAL STATEMENTS (5 Sessions)

Ratio Analysis - Meaning of ratio, classification of ratios, Liquidity ratios, capital structure or
solvency ratios, turnover or activity ratios, Profitability ratios, Integrated ratios, Advantages CO-2
and Limitations of ratio analysis and its computations (Case study)

MODULE 4: COST CONCEPTS & TREATMENT OF COST ELEMENTS (6 Sessions)

Concept of cost, cost centre, cost unit, methods and Technique of costing, Classification of
costs, Elements of costs. Material Cost: Inventory Valuation Policy as per IND AS, methods
of inventory valuation (problems on FIFO and Weighted average method). Labour Cost:
CO-3
Meaning and Classification of Labour Costs, Accounting and Control of Labour Costs. Direct
Expenses & Overheads: Meaning, Nature, Collection, Classification and Treatment of Direct
and Indirect Expenses (Basic Problems)

MODULE 5: PREPARATION OF COST SHEET (4 Sessions)

Procedure and computation of Cost Sheet (Tender and Quotations). Traditional Cost CO-3
Statement & Marginal Cost Statement. Cost control and Cost reduction.

MODULE 6: ACTIVITY BASED COSTING (2 Sessions)

Activity based costing system, Elements & steps involved & computations, ABC vs CO-3
Traditional Costing. Uses and Limitations.

MODULE 7: BUDGETARY CONTROL (4 Sessions)

Meaning of budget, budgetary control, Types of Budgets and their objectives, Computation
of Flexible Budget and Cash Budget only. Responsibility Budgeting, Rolling Budgets & Zero CO-4
based Budgeting (Case study)

MODULE 8: STANDARD COSTING & VARIANCE ANALYSIS (4 Sessions)

Various Types of Standards, Installation of Standard Costing System-for Material, Labour,
and Overhead. Standard costing as a control technique, Computation & Analysis of CO-5
Variance - Material variances & Labour variance Analysis only. Benchmarking for Setting of
Standards (Case study)

MODULE 9: MARGINAL COSTING & STRATEGIC DECISION MAKING (7 Sessions)

Meaning, Advantages, Limitations and Applications, Breakeven Analysis, Cost-Volume
Profit Analysis, P/V Ratio and its Significance, Margin of Safety. Transfer Pricing –
Objectives & Methods of Transfer Pricing, Decision making: Make or buy, Accept or reject, CO-6
Sales-Mix, Discontinuation of a product line, Operate or Shut down decisions and Product
Mix – Computation (Case study).

TEXT BOOKS
Khan, M.Y. & Jain, P.K. (2017). Management Accounting Text, Problems and Cases. 7/e. New
1.
Delhi: Tata McGraw Hill Publications.
REFERENCE BOOKS
1. Bhat, S. (2016). Management Accounting. 1/e. New Delhi: Excel Books.
Maheshwari, S.N. (2013). Cost and Management Accounting. 1/e. New Delhi: Sultan Chand
2.
and Sons.
Arora, M.N. (2012). A Textbook of Cost and Management Accounting. 10/e. New Delhi: Vikas
3.
Publishing House.
E BOOKS
1. https://open.umn.edu/opentextbooks/textbooks/137
MOOC
1. https://www.mooc-list.com/course/managerial-accounting-fundamentals-coursera
2. https://www.mooc-list.com/course/managerial-accounting-and-corporate-control-edx
https://www.mooc-list.com/course/managerial-accounting-cost-behaviors-systems-and-
3.
analysis-coursera