JAIPURIA INSTITUTE OF MANAGEMENT, LUCKNOW

Post Graduate Diploma in Management

SECOND TRIMESTER (2015-2016)
Course Code: FIN201

Course Title: Management Accounting and Control

Course Overview:
Management Accounting and Control seeks to create value by providing effective tools for
planning, analysis and control, which furnish information that is useful for decision making at all
levels in the organization. The course introduces a number of cost and management accounting
tools and quantitative techniques that can be used to analyze how business processes consume
resources, create value for a firm and its customers, and how this value may be enhanced through
activity and process improvement. Major topics include cost behavior, cost analysis, profit
planning and control measures.
Financial accounting provides information of firms financial condition and results of its
activities through three standard financial statements, i.e., the balance sheet, income statement
and statement of cash flows. Management Accounting and Control is the next phase in
accounting which deals with evaluating the information not provided by financial accounting and
is essentially meant for internal use of management. It incorporates cost accounting with an aim
to ascertain costs, control costs and in the long run reduce costs. This course focuses on decision
facilitating information for improvement in specific decisions such as to set better prices, to cut
costs productively, to plan product mix, or to make better allocation of resources and has crucial
managerial uses for planning, implementing and controlling the firms activities. This course,
thus, incorporates the analysis and effect of all relevant information for improvement in specific
managerial decisions.
This course is divided into four modules. Module 1 acquaints students with the concept and
applications of cost and management accounting. Module 2 deals with activity based costing, its
relevance and how it is better than traditional system of costing for companies. Module 3 deals
with Cost-volume-profit analysis and its implications for managerial decision making. Module 4
is accounting for planning and control of organization and essentially covers budgeting, variance
analysis, responsibility accounting, balanced scorecard and transfer pricing. This course includes
cases to analyze and apply the concepts in practical business problems involving costing tools
followed by class discussion. The case analyses help students to take a position, to understand
and appraise the arguments of fellow students and to reach to some decision.

Learning Outcomes:
After undergoing this course, the participants will be able to:
1.
2.
3.
4.

Understand how Costs behave;

Evaluate Cost Management System;
Analyze relevant cost information for decision making;
Apply management accounting techniques for planning and control.

List of Topics/ Modules

Topic/ Module
Module 1: Introduction to Costing

Contents/ Concepts
Goals of Managerial Accounting, Cost Terms used
for decision making and Concept of Incremental
Analysis, Traditional Cost Management Systems:
Job-Order Costing and Process Costing System,
Cost Behaviour Patterns and Cost Estimation
Methods
Module 2: Activity Based Costing
Cost Allocation, Activity Based Costing and
Application of Activity Based Costing and Activity
Based Management
Module 3:
Managerial Decision Cost-Volume-Profit Analysis, Use of Cost
Information in Management and concept of
Making
Relevant Costs in Decision Making
Module 4: Tools for Cost Planning and
Budgetary Planning and Control, Standard Costs and
Control
Variance Analysis, Responsibility Accounting and
Transfer Pricing, Balanced Scorecard Concept; As
a Tool for Performance Evaluation and Concepts of
Strategic Cost Management

Evaluation Criteria:
Component
Quiz

Class Participation

Description
Weight
There will be three quizzes conducted during the course
consisting of MCQ (s). Best two out of three will be 0.10
considered for evaluation.
Students will be evaluated for their active contribution in class
discussions, relevance of contribution and overall conduct
during classes.
0.10

Project Assignment
& Presentations

Mid-term
Examination
End-term
Examination

A group project assignment would be given to help the

students to Analyze the cost structure of a company and
compare it with its competitor company and further
thereupon would be required to prepare a write up on the 0.20
business risk of that company.
The mid-term question paper would be designed in such a
manner that it will assess the conceptual understanding and 0.20
application ability of the students.
The end-term question paper would consist of conceptual 0.40
questions, application based questions and a case study to
assess the application and analytical ability of the students.

Recommended/ Reference Text Books and Resources

Text Book

James, J. (2014). Managerial Accounting (5th Edition). New Delhi: Wiley India Pvt. Ltd.

References

Hansen, D.R. and Mowen M.M. (2013). Management Accounting (8th Edition) Delhi:
Cengage Learning.

Atkinson, A. A., Kaplan, R. S., Matsumura, E. M., Young, S. M., & Kumar, G. A. (2014).
Management Accounting: Information for Decision Making and Strategy Execution (6th
Edition) New Delhi: Pearson Education.

Horngren, C. T., Sundem, G. L., & Stratton, W. O. (2012 ). Introduction to Management

Accounting (16th Edition). Delhi: Pearson Education.

Drury, C. (2012). Management and Cost Accounting (7th Edition). New Delhi: Cengage
Learning India Pvt Ltd.

Internet Resources
www.accountingcoach.com/
This website has details on all accounting topics. It has an exhaustive glossary of
accounting terms. Apart from explaining various accounting concepts, this website has
host of other interactive tools like Quizzes, Questions & Answers, Crosswords, and
templates to practice the concepts.

www.aaahq.org
3

This is the website of American Accounting Association. The American Accounting

Association promotes worldwide excellence in accounting education, research and
practice. This website contains a digital library which has exhaustive archive of
accounting publications. It also has latest accounting news and research articles.

www.accountingtoday.com
AccountingToday.com is a leading provider of online business news for the tax and
accounting community, offering breaking news, in-depth features, insightful editorial
analysis, and a host of Web-related resources and services. This website would help
students to keep abreast with the latest in the field of accounting.

www.icwai.org
This is the website of Institute of Cost Accountants of India. It provides updated
information on the Act, Rules and Guidelines to be followed by cost accountants in India.
It also publishes Management accounting guidelines and guidance notes. The website
should be referred to keep abreast with the latest in management and cost accounting in
India.

The students are also advised to read The Economic Times and Business Today regularly
for getting the latest updates.

Session Plan:
Session Topic

Requirements: Readings/Cases

Module 1: Introduction to Costing

1
Goals of Cost and
Essential Reading:
Managerial
Text Ch. 1 Pp. 4-11
Accounting

2.

Cost Classification
for Manufacturing
and Service
Companies

3-4
Job Order Costing
System/Cost Sheet

Essential Reading:
Text Ch. 2 Pp. 38-46

Essential Reading:
Text Ch. 2 Pp. 47-60

Module 2: Cost Allocation and Activity Based Costing

4

Learning Outcomes
Understanding of primary
goals of managerial
accounting and Knowledge
of cost terms used in
planning, control and
decision making [LO 1]
Ability to understand and
distinguish between product
and period costs, direct costs
and overheads, and concepts
of Cost Cutting, Saving,
Control, Rationalization and
management [LO 1]
Understanding of how direct
costs and overheads are
applied to jobs [LO 1, LO2]

5-6
Cost AllocationTraditional Method
7
Activity Based
Costing
8

Application of
Activity Based
Costing and Activity
Based Management

Essential Reading:
Text Ch. 6 Pp. 205-218
Essential Reading:
Text Ch. 6 Pp. 218-227

Essential Reading:
Text Ch. 6 Pp. 218-227

Knowing the need, basis and

process of allocation of
overheads among
departments and further
allocation of service
department costs [LO2]
Ability to distinguish
between Traditional and
Activity Based Costing
Methods [LO1, LO2]
Understanding the benefits
and challenges in applying
ABC method in Indian
Companies [LO1, LO2,
LO3]

Module 3: Managerial Decision Making

9
Cost Behaviour
Patterns and Cost
Estimation Methods

Essential Reading:
Text Ch. 4 Pp. 121-133

10-11
Cost-Volume-Profit
Analysis

Essential Reading:
Text Ch. 4 Pp. 134-145

12
Use of Cost
Information in
Management
Decision Making
13
Incremental Analysis
14
Pricing Decisions

Essential Reading:
Text Ch. 7 Pp. 258-268, 273-274

Caselet: Primus Consulting Group

(Pp. 294)
Essential Reading:
Text Ch. 7 Pp. 258-268
Caselet: Preston Concrete
(Pp. 314)
Essential Reading:
Text Ch. 8 Pp. 297-309

Understanding of Cost
Behaviour Patterns and
Variable cost Estimation and
applying the derived costs
for Breakeven point analysis
[LO1, LO3]
Understanding the concept
and implications of
Operating Leverage from
Financial decision making
perspective and What if
analysis for decision making.
[LO3]
Analyse decisions like
Additional Processing, Make
or Buy and Dropping a
Product Line using cost
concepts and qualitative
considerations. [LO3]
Using Incremental costing
and understanding qualitative
considerations for decision
making [LO3]
Understanding the profitmaximising price, fixation of
prices for special orders and
analyzing customer
profitability [LO3]

Module 4: Tools for Cost Planning and Control

15-17

Budgetary Planning
Budgets for Financial
Planning; Types of
Budgets

18

Budgetary Control
Static Vs. Flexible
Budgets

Essential Reading:
Text Ch. 10 Pp. 371-384
Essential Reading:
Text Ch. 10 Pp. 384-389

Making Master and

Functional Budgets and use
them as a tool for planning.
[LO4]
Explaining why and how
flexible budgets help in
performance evaluation and
planning. [LO3, LO4]

19
Responsibility
Accounting and
Transfer Pricing

20
Introduction to
Balanced Scorecard
21 - 24

Presentation

Essential Reading:
Text Ch 12 Pp. 453-469 and 477481

Essential Reading:
Text Ch 12 Pp. 470-475

Identifying cost centers,

profit centers and investment
centers and Comparing
different methods of Pricing
for internal transfers and
their implications. [LO3,
LO4]
Using Balanced Scorecard
for Performance Evaluation
[LO4]

Individual Presentation on Group

Assignment followed by Questions

Contact Details:
Name of the Instructor:
Office Location:
Telephone:
Email:
Teaching Venue:
Office Hours:
Website:
Online Links (Link to
Blackboard etc.):

Prof. Rashmi Chaudhary

Room No.207 (old building 2nd Floor) Jaipuria Institute of
Management, Lucknow.
9369429900
rashmi.chaudhary@jaipuria.ac.in
Room No.112 (Section A) & Room No 113 (Section B) &
Room No.114 (Section C )
9:30am - 5:30pm
www.jaipuria.ac.in