Total Marks: 100 Paper Code: BMHCR2133
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MANAGEMENT ACCOUNTING
Unit 1.1: Nature and Scope of Introduction to Management Accounting (1L+2L+6L+9L=18L)
o Meaning, nature and scope of Management Accounting; Comparison of Management
Accounting with Cost Accounting and Financial Accounting.
Unit 1.2: Cost concepts Classification of Costs
o Meaning, Scope, Objectives, and Importance of Cost Accounting; Cost, Costing, Cost
Control, and Cost Reduction; Elements of Cost, Components of total Cost, Cost Object, Cost
Unit and Cost Center.
o Fixed, Variable, Semi-variable, and Step Costs; 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;
Out-of-pocket Costs; Opportunity Costs; Expired, and Unexpired Costs; Conversion Cost.
Unit 1.3: Preparation of Cost Sheet Cost Ascertainment
o Concepts with practical problems
Unit 1.4: Cost Ascertainment
o Overheads - Collection, apportionment, absorption, & distribution both traditional and
modern (ABC)
Unit 2.1: Marginal Costing (1L+8L+7L=16L)
o Concept of Marginal Cost, Difference between absorption costing & marginal costing
Unit 2.2: Cost-Volume Profit Analysis
o Contribution, Profit-Volume Ratio, Margin of safety, Cost Break-even Point, Composite
Break-even Point, Cash Break-even Point, Key Factor & sales mix, Break-even Analysis
Unit 2.3: Relevant Costs and Decision Making
o Pricing, Product Profitability, Make or Buy, Exploring new markets, Export Order, Sell or
Process Further, Shut down vs. Continue.
Unit 3.1: Budgets and Budgetary Control (12L+4L+6L=22L)
o Meaning, Types of Budgets, Steps in Budgetary Control, Fixed and Flexible Budgeting,
Preparation of functional budgets for operating and non-operating functions, cash budget,
master budget (concept), principal budget factors, Budget manual
Unit 3.2: Responsibility Accounting
o Different responsibility centers with divisional performance measurement, concepts of
return on investment (ROI), residual income (RI) and economic value added (EVA) (concept),
Controllable and uncontrollable costs and profits, preparation of divisional performance
reports.
Unit 3.3: Transfer Pricing
o Objectives, Methods (Cost Based, Market Price Based, Negotiated Pricing), Advantages
and Disadvantages, Criteria for setting Transfer Prices, Transfer Price in different situations,
Situations causing Conflicts and resolving the Conflicts
Unit 4.1: Standard Costing and Variance Analysis (9L+5L=14L)
o Meaning of Standard Cost and Standard Costing, Advantages, Limitations and Applications;
Material, Labour, Overhead and Sales variances.
Unit 4.2: Strategic Decision Making
o Target Costing - methodology, methods of establishment of target costs, attributable
costing, and back-flush costing; Life Cycle Costing -Meaning of Life Cycle, characteristics of
life cycle concept, importance and benefits of life cycle costing , Product Life Cycle Costing,
Project Life Cycle Costing; Kaizen Costing - concept, procedure for implementation,
evaluation, benefits, challenges; Lean accounting; Cost of Quality and Total Quality
Management – principles/concepts, stages, quality control, quality assurance, quality
management, corrective actions, and Continuous Process Improvement; Learning curve
(only theory)
References:
1. C.T. Horngren, Gary L. Sundem, Jeff O. Schatzberg, and Dave
Burgstahler:Introduction to Management Accounting, Pearson
2. M.N. Arora: A Textbook of Cost and Management Accounting, Vikas
PublishingHouse Pvt. Ltd.
3. M.Y. Khan, and P.K. Jain, Management Accounting: Text Problems and
Cases,McGraw Hill Education (India) Pvt. Ltd.
4. S.N. Maheshwari, and S.N. Mittal, Cost Accounting: Theory and Problems,
ShreeMahavir Book Depot (Publishers)
5. Cost Accounting- A Managerial Emphasis – Horngren,Foster,Datar.
