Master of Business Administration (MBA) Program

Course Name: Management Accounting

Course Code: MBA 611
Course Credit: 3

Course Owner: Amit Kumar Mishra, Ph. D

Name of Faculty Members to Teach this Course

(To be mentioned after final course allocation)

Galgotias University
School of Business

Course Background and Learning Objectives:

The course Management Accounting deals with the Cost Accounting aspect. Cost
accounting is one approach to managerial accounting that involves cost, budget and
profitability. It helps the management in planning, controlling and decision making. It is
generally concerned with internal reporting for management requirement. This branch of
accounting has gained a lot of significance due to heavy industrialization and the overall
cut throat competition that has been taking place in the market. It helps the management
to have a clear indication of their economic performance, and the direction in which they
must move in order to improve their economic efficiencies, and be helpful in solution of
complex management problems, such as determination of most profitable mix, make or
buy decisions, replacement of equipments, introduction of new products and
discontinuance of non profitable products.
The learning goals and objectives of this course for students to pursue management
education are:
1. To acquaint students with basic concepts and techniques of management
accounting and their applications to managerial decision-making to sustain the
business in long-run. [Sub-goal: 3.1]
2. To develop managerial accounting skills and become familiar with techniques
used in decision-making situations. [Sub- goal 3.1 and 3.3]
3. At the end of this course, students will be able to apply the various methods
learned in the course to manufacturing and service enterprises, public sector
entities and non-profit organizations. [Sub-goal: 3.2 and 4.2]

Pedagogy:
The pedagogy will be a combination of class lectures (theory and solving problems), real
life examples, case let discussion and projects/assignments. Each concept of management
accounting will be explained in a lucid manner so that students from any background are
able to comprehend the concepts easily. In addition to the text and reference books,
additional readings will be distributed in the class from time to time. Students are also
expected to read and identify the problems in understanding the concepts and their
application before the start of each session. This will help to develop creativity and
innovative thinking in students to manage multi-stakeholder relationships.

Course Strategy and Requirements:

Every field of study has its own language and its own way of thinking. To get the
conceptual clarity and to think the application of concepts for business managers you
should follow the following strategies.
(i)

Read and identify the problems in understanding the concepts before the
start of each session. If you are unable to get the conceptual clarity after
the end of the session, immediately ask questions in the class (if time
permits), or after the class (preferably same day).

(ii)

Try to solve problems on your own, which have already solved in the
class. In case of difficulty, ask friends, or teacher.

(iii)

Read the case let and try to find out the learning points pertaining to the
specific topic in Managerial Accounting.

(iv)

Any difficulty in understanding concepts or problems while studying,

clarify your doubts by asking friends, or the teacher.

(v)

While studying the course, try to relate the use and usefulness of various
concepts, which you have learned from this course.

(vi)

Thus, class participation is very much useful for better understanding of

the concept. This will be appreciated and rewarded if you add value to the
class through your questions, statement, and comments. It is the quality of
these that is more important than the quantity.

(vii)

Moreover, there will be assignments/projects assigned to all of you either

individually or in group. Late submission of assignments/projects will not
be accepted.

Assessment of Learning Goals and Objectives:

Components of evaluation are very crucial pertaining to assessing the learning goals and
objectives of the course. Keeping in mind students heterogeneous background, and
strategies specified above, the following components of evaluation have been designed to
assess the learning goals and objectives. Quizzes will evaluate the conceptual clarity of
each student most frequently. Case studies discussion, project report presentation and
semester end examination will assess the learning goals 1, 2 and 3 as mentioned above.

Assessment Components and Marks

Learning Goals and Objectives*

1
2
3

Quiz/ Case Studies/ Project Report

Presentation (20 Marks)
CAT-1 & CAT-2 (30 Marks)
Semester End Examination (50 Marks)

* For details of 1, 2, 3 learning goals and objectives, see above of this course outline.

Quiz/ Case Studies/ Project Report Presentation

This is an individual assessment component of evaluation consisting of conceptual,
theoretical and numerical multiple choice questions. There will be at least 3 quizzes and
best 2 will be taken into consideration for final grade of students. Similarly, case studies
discussion and project report presentation might also be considered as the components of
evaluation to assess students performance in a group. Through case studies and project
report presentation students are expected to apply economic concepts and business
models in a decision-making setting to achieve the objectives of the firm, i.e. profit
maximization. Through these components students will also develop their creative and
innovative thinking by taking critical investment decisions into consideration.
Continuous Assessment Test 1 & 2 (CAT-1 & CAT-2)
This component of evaluation is to assess the performance of students after the
completion of 15 lectures and 30 lectures respectively. This is to monitor students
performance continuously and make them aware about their mistakes and wrong
understanding of the concepts.
Semester End Examination (SEE)
Semester End Examination is to assess students individually by keeping the overall
learning goals and objectives in mind. The questions are mostly analytical and situational.

RECOMMENDED TEXT BOOK AUTHOR & PUBLICATION

Principles and
Accounting

Practice

of

Cost Ashish K. Bhattacharyya, PHI

SUPPLEMENTARY READINGS
Management Accounting

Paresh Shah, Oxford Higher Education

Advanced Management Accounting

Jawahar Lal, Vikas Publication

Management Accounting
Management Accounting
Principles of Management Accounting

D.K. Mittal, Galgotias Publication

Khan and Jain, TMH

Management and Cost accounting

S.N.Maheswari, Sultan Chand

Colin Drury

Course Outline (session-wise):

Session
Topics to be discussed
Readings
Module I: Cost Accumulation
The objective of this module is to explain cost concepts relating to management needs, the nature of
process costing and its comparison with job costing and its suitability. It would also cover the accounting
procedure for joint products & analyze costing treatment of By Products and explain cost ascertainment by
different service organizations and role of ABC system to allocate and ascertain cost.
1
Meaning and Scope of Cost & Management Accounting
Text Book, Chapter 1 & 2
Importance Interface between Financial, Cost & Managerial
Accounting
Cost Accounting Terms: Meaning of the terms like cost, cost
unit etc.
2
Cost Classification-Element wise, Behavioral pattern, Function Text Book, Chapter 1 & 2
wise classification, Normality, For Decision Making Purpose
3
Cost Element and Cost Sheet :Meaning -material cost; labour Text Book, Chapter 9
cost and overhead cost
4
Preparation of Cost Sheet and Cost Calculation-Contd.
Text Book, Chapter 9
5
Preparation of Cost Sheet and Cost Calculation
Text Book, Chapter 9
6
Process Costing: Meaning; utility; Job vs. Process
Text Book, Chapter 8
7
Ascertainment of Cost under Process Costing
Text Book, Chapter 8
8
Accounting of Normal Loss, Abnormal loss, Abnormal Gain & Text Book, Chapter 8
Scrap; Spoilage
9
Accounting for Joint Product
Text Book, Chapter 8
10
Accounting for By Product Cost
Text Book, Chapter 8
11
Operating Costing: Meaning; utility; cost calculation for service Handout
organizations.
12
Transport Costing: Concept :
Handout
13
Transport Costing: Cost Ascertainment Procedure
Handout
14
Transport Costing: Application
Handout
15
Activity Based Costing: Concept & Relevance
Handout
16
Procedure of Cost ascertainment under Activity Based Costing
17
Comparison of Activity Based Costing with Tradition Costing
Handout
System
Module II: Profit Planning
The focus of this module is to explain the concept of CVP analysis, clarify its role in decision making.
18
CVP Analysis: Meaning, Assumptions and Role in Decision
Text Book, Chapter 13
making:
19

Break Even Analysis: Meaning, Computation and Preparation

Text Book, Chapter 13
of Graph
20
Concept and application of Margin of Safety
Text Book, Chapter 13
21
Application of CVP analysis in Decision Making
Text Book, Chapter 13
22
Case Study: Fly Ash Brick Project: Feasibility Study Using
Harvard Business Case
CVP Analysis (S.K. Mitra, Hajela Shubhra)
Module III: Decision Making
This module is intended to describe the analytical framework for short term decisions in terms of relevant
data and illustrate the application of differential costs/revenues in various decision situations.
23
Marginal Costing & Tactical Decisions. Make or Buy Decision
Text Book, Chapter 19
Outsourcing Decisions etc.
24
Relevant Costing: Absorption & Contribution
Text Book, Chapter 19
25
Target costing and Cost Plus Pricing
Text Book, Chapter 19
26
To Accept or Reject a Special Order
Text Book, Chapter 19
To Sell or further Process
27
To Continue or Abandon a Project
Text Book, Chapter 19
Module IV: Cost Control
This module discusses preparation of different types of budgets in order to control cost and ensure profits,

Session
Topics to be discussed
Readings
elaborates major causes of cost variances and its calculation. It is also intended to develop understanding of
the role of responsibility accounting as divisional performance measurement and its different responsibility
centers
28
Budgeting: Meaning ,utility and procedure
Text Book, Chapter 14
29
Types of Budget
Text Book, Chapter 14
30
Preparation of Flexible Budget
Text Book, Chapter 14
31
Concept of Zero Based Budgeting and its Comparison with
Text Book, Chapter 14
Traditional Budgeting
32
Case Study: Town of Bellington
Harvard Business Case
33
Variance Analysis: Meaning, relevance of variance analysis and Text Book, Chapter 16
types of variances
34
Cost Variances: costing standards; various types of cost
Text Book, Chapter 16
variance, factors responsible and measures to control variances
35
Material Variance: Meaning, types and computation
Text Book, Chapter 16
36
Labor Variance: Meaning, types and computation
Text Book, Chapter 16
37
Overhead Variance: Meaning, types and computation
Text Book, Chapter 16
38
Responsibility Accounting: Concept, Importance and
Handout
Limitations
39
Types of Responsibility Centers and Their nature
Handout
40
Performance Measurement Criteria of different Responsibility
Handout
Centers
SEMESTER END EXAMINATION
*
The names of different group members will be announced by the APO or by the course instructor or by
the CR of the class.

Students Interaction Time

[Each faculty member teaching this course for one Section needs to mention 2 hours
towards students interaction time per week between Monday Friday. If anyone teaches
more than one Section, accordingly he/she needs to clearly mention students interaction
time in the detailed course outline.]