Performance Management

MC-321
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Program

M.Com

Credit Hours

Duration

15 Weeks / 30 sessions

Prerequisites

Management Accounting (MC-318)

Resource Person

Tahir Mahmood (ACCAUK, FCA-PAK)

Counseling Timing

Monday Thursday
11:00 a.m. 12:30 p.m.

Contact

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Capsule Statement
The syllabus of Performance Management, builds on the knowledge gained in
Management Accounting. This course equips the participants with more specialist
capabilities which are covered in strategic management accounting.
The syllabus begins by introducing more specialised management accounting topics.
There is some knowledge assumed from the course Management Accounting. The
objective here is to ensure that the participants have a broader background in
management accounting techniques.
The syllabus then considers decision-making. The participants need to appreciate the
problems surrounding scarce resource, pricing and make-or-buy decisions, and how it
relates to the assessment of performance. Risk and uncertainty are the factors of real-life
decisions and the participants need to understand risk and be able to apply some basic
methods to resolve the risks inherent in decision-making.
Budgeting is an important aspect of accountants lives. The syllabus explores different
budgeting techniques and the problems inherent in them. The behavioral aspects of
budgeting are important for accountants to understand, and the syllabus includes
consideration of the way, individuals react to a budget. Standard costing and variances
are then built on.
The syllabus concludes with performance measurement and control. This is a major area
of the syllabus. The participants need to understand how a business should be managed
and controlled. They should appreciate the importance of both financial and nonfinancial performance measures in management. Accountants should also appreciate the
difficulties in assessing performance in divisionalised businesses and the problems
caused by failing to consider external influences on performance.

Learning Objectives
After studying this course the participants should be able:
1.
2.

To explain, apply, and evaluate cost accounting techniques.

To select and appropriately apply decision-making techniques to evaluate
business choices and promote efficient and effective use of scarce business
resources, the risks and uncertainty inherent in business and controlling those
risks.
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3.
4.
5.

To apply budgeting techniques and evaluate alternative methods of budgeting,

planning and control.
To use standard costing systems to measure and control business performance and
to identify remedial actions.
To assess the performance of a business from both financial and non-financial
viewpoint, appreciating the problems of controlling divisionalised businesses and
the importance of allowing for external aspects.

Learning Methodology
The Course
Regularity and Punctuality
Regularity and punctuality will be very strictly observed. You have an allowance of only
six absents (Out of 30 sessions). It includes the leaves that you get approved from your
Batch Advisor. In case you are absent in seven classes, you will get SA grade in the
course i.e; failure due to short attendance. Regarding punctuality, you will be marked
present only if you arrive in the class on time. Any absent during the presentation
sessions will result in deduction of 1 mark each from the class participation marks. This
means that the class participation marks can go into the negative as well. If you miss a
Quiz, you get zero in that Quiz. You will lose 5 marks if you deliver your assignment /
report after the due date.
Book Readings
You are supposed to read in advance the text chapters under discussion. Questions
answered, relating to these text chapters, will contribute to the class participation marks.
Class Participation
Positive, healthy and constructive class participation will be monitored in each class.
Particular emphasis will be given during the presentation sessions. The manner in which
the question is asked or answered will also be noted. Your behavior as professional
accountants in the class will contribute to the class participation marks.
Consultancy Service

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During this program, consider me as your consultant. You are free to discuss the
progress of the course any time you want. However to avoid inconvenience, setting up
of appointment is recommended.
In Case of Cheating
In real world outside the classroom, students do not often work individually. They
typically work in teams and help each other extensively. I have no objection to you
getting help from me or other students. I encourage you to do so. But do not do your
assignments / projects etc. by cheating.
Remember that if you cheat, you will lose your 10 marks out of your aggregate
sessional evaluation in addition to the cancellation of the relevant quiz / assignment
/ project etc. whatever it will be. There is no second chance. The first time you are
caught cheating, you will be penalized.
Hope you will have great time learning Performance Management.

Assessments
All of the activities held during the session will be evaluated; the final grades for the
course will be as follows:
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Quizzes

20%

Assignments

10%

Mid-Term

15%

Attendance & Class Participation

5%

Project

5%

Presentations

10%

Final exam

35%

Total

100%

Recommended Text Books

Study Text-Performance Management (Paper F5) ACCA.

Reference Books

Management Accounting
By Collin Drury

Performance Measurement & Performance Management

By Coaffee Jon

Strategic Performance Management

By Lawrie , Gavin

Calendar of Activities
Performance Management Fall 2010
Session
1-2

Activity

Chapter Reading
2a

Activity Based Costing

5/9

Implications of switching to ABC

Sales strategy, performance management and decision
making

Back Flush Accounting

3-4

Process of back flush accounting

Contrast with traditional accounting
Implications of BF accounting on performance
management
Benefits of introducing BF accounting
The decision to switch to BF accounting from
traditional process.

2d

Assignment # 1
Throughput Accounting
5-6

Interpretation of throughput accounting

Suggest how a TPAR could be improved.
Application of throughput accounting to a multiproduct decision-making problem

2e

Quiz # 1
Budgeting

7-8

Budgetary systems for an organization, including topdown, bottom-up, rolling, zero-base, activity- base,
incremental and feed-forward control.
Usefulness and problems with different budget types
(zero-base, activity- based, incremental, master,
functional and flexible).

7, 8

Assignment # 2
9-10

9
Forecasting Techniques

Time series, simple average growth models and

estimates
Future value prediction from time series analysis using
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both additive and proportional data.

Quiz # 2
Standard Costing and Variance Analysis

11-12

Production overheads variances analysis

Variable overhead total, expenditure and efficiency
variances
Fixed overhead total, expenditure and, where
appropriate, volume, capacity and efficiency variances.

10, 12

Assignment # 3
Standard Costing and Variance Analysis
13-14

Operating statements in full absorption costing

environment
Reconciliation of actual profit with budgeted profit

11

Quiz # 3
Pricing

15-16

Factors that influence the pricing of a product or

service
Derivation of a straight line demand equation
Equation for the total cost function (including volumebased discounts)

Mid term
Pricing
17-18

Different price strategies including cost-plus pricing,

skimming, penetration, product-line, discrimination and
relevant cost

Assignment # 4
19-20

13
Performance Measurement and Control
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The scope of performance measurement

Financial performance indicators (FPIS) for
profitability
Quiz # 4

Performance Measurement and Control

21-22

Liquidity and risk in both manufacturing and service

businesses.
Methods to improve FPIS.
Non-financial performance indicators (NFPIS)
Methods to improve NFPIS.

13

Assignment # 5
Performance Measurement and Control
23

Balanced scorecard
Building block model proposed by Fitzgerald and
Moon

13

Quiz # 5
14, 15
Performance Measurement and Control

24-25-26

Divisional performance and transfer pricing

(Absorption and Marginal cost pricing)
Effect of transfer prices on the performance assessment
of divisions and decisions made
Assignment # 6

27-28

Presentations & Project

29-30

14,15
Performance Measurement and Control

Return on investment (ROI) and residual income (RI)

indicating their shortcomings
Value for money (VFM) as a public sector objective
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Quiz # 6

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