Course outline PGP I I Batch 2012/2014 Faculty Dr.

Dr. Vinay Goyal Why this course Any organisation which is in the market place strives to maximize its presence and make profits. Further, the profit needs to be made efficiently and thus maximize shareholder returns. In reality this situation is more complex as other players in the market are competing and constantly changing the business parameters which affect profits. The presence of competition requires the organisation to look with-in and have a good understanding of its products, markets, competitors prices; capacities etc.This would require a clear understanding of what it costs to make the product, alternatives available which can change the costs to our advantage to enable decisions on pricing. Costs associated with production are dynamic and could change from what was assumed at the time of planning/deciding. Thus the need for a system which gives information on a dynamic basis the current status of the cost assumptions and the actual costs so that managerial decisions can be reviewed/revised to attain best possible profit objectives. Cost data can also help in taking make or buy decisions so that the over all profitability improves. Cost management is an objective not only for manufacturing companies but also for all service organisations including Not for Profit ones. Cost data is now mandatory information sought by Government authorities for taxation purposes. Transfer pricing between divisions of the same corporate across international borders are of interest to tax authorities. Costing has also relevance from the point of international trade issues-particularly antidumping. Costing system provides actionable information to an organisation and its managers for planning, and controlling costs and taking management decisions on its products, services, operations and customers. At a different level, internal to the organization, costing system helps to evaluate performance of individual managers and also incentivize them. This course aims to provide basic concepts relating to cost, tools of analysis, managerial decision framework for costing decisions and practices in the shop floor/market place. Students taking this course are expected to have sufficient understanding of financial statements, P& L accounts, their inter-links. COST AND MANAGEMENT ACCOUNTING (COMA) Term II Number of credits 2.5

Learning objectives To understand basic concepts of Cost accounting & Management Accounting To understand scope and context of cost management techniques and their application To understand and use cost information for business decisions To understand and use cost information for strategic decisions Text books suggested for reference 1. Cost accounting: a Managerial emphasis-Horngren, Datar, foster (Pearson) 2. Cost management: A strategic emphasis-Blocher, Chen, Cokins, Lin-(Tata Mcgraw Hill) Pedagogy Lectures which will be followed up by problem solving in the class, Assignments, quiz etc. The theoretical inputs are required to be reinforced by actually solving as many problems as possible to internalize the concepts. It is important that the student comes to class with preparation in respect of problems which are identified for being solved in the class. The same holds for assignments which are given. Evaluation Mid term examination (after 8 sessions) Term end examination (comprehensive, covers full syllabus) Case study submission Quiz Project work

30% weight age 30% weight age 10% weightage 10% weight age 20% weight age

Session Plan
Session No. 1 2&3 4, 5 & 6 7&8 9 10 & 11 12 13 14 15 & 16 Introduction Basic Concepts Cost Volume Profit Analysis and a case Activity Based Costing and Activity Based Management - and a case Decision Making and Relevant Costing Budgeting Process Costing Pricing decisions & Cost Management Target Costing Cost Allocations Joint Products & By Products Balance Score Card Transfer Pricing Economic Value Added & Standard Costing Topic Horngren Chapter 1 2 3 4 11 6,7 & 8 17 12 15 & 16 13,19, 22,

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Standard Costing

7,8 14

The session plan is an indicative one. The purpose of giving it is to assist the student in doing pre reading Project work Every student (in groups ) is required to under take a practical project by visiting an industrial/service unit. It could be the study of its costing system. If currently no system is being used, the student is expected to recommend an appropriate system which is implementable and further the student should be able t demonstrate to the owner of the unit how the system adds value to the operations. It could also be in the area of management decision making. The student can, in consultation with the owner can take up a problem of capacity management, make/buy, etc using CPV, cost data etc. These are indicative suggestions and student is expected to work with the owner by identifying areas where COMA principles can be used for actually solving management issues. The project should be submitted on the day of the end term examination.