Management Accounting

Uses of Financial Reports External users rely on financial reports: Investors – assess finan...

R&D Project Decision Example Project cost: 100 m Estimated benefits (original): 160 m Amount ...

1. Illustrative Example: Government Hospital Tender Context: You work for a government hospital...

Cost Sheet Preparation: Autocomp Ltd 1. Cost Sheet Overview Definition: Final output of the cos...

Service Sector Costing 1. Importance of Service Sector Contributes over 61 % of GDP (up from 59 ...

Introduction Company: RK Forging, based in Coimbatore. Industries Served: Power, Automotive, O...

Broad Methods of Product Costing There are two broad methods of product costing: 1. Job Costing ...

1. Job as a Cost Object Definition: A job is treated as a cost object. All costs related to tha...

1. Extension of Job Costing Definition: Customer costing extends job costing by pooling costs o...

1. Process Industries Definition: Firms producing identical products or services through a cont...

1. Introduction Real‑world reality: Processes incur losses, wastage, defective units. Loss tim...

1. Definitions & Context Joint Products: Two or more products of significant value emerging sim...

1. Definitions Direct Costs Traceable to a specific product Examples: wood, plywood, laminatio...

1. Allocation Principle Cause & Effect: A product should absorb the cost of any department whos...

Introduction Let us start our discussion with a costing framework suitable for decision making. ...

Introduction We started our discussion on fixed and variable costs and how they influence cost. ...

Introduction Your friend owns an ice-cream shop. She is concerned because two more shops have op...

Single-Product BEP: Fortune Pharma Example Selling Price: ₹240 per case Variable Cost: ₹200 pe...

Importance of Pricing Strategy Pricing is crucial in competitive markets. Aggressive pricing bo...

Facing Competition Through Cost Leadership Firms achieve cost leadership by: Outsourcing non-c...

Why Do Firms Close Down Products or Divisions? Due to negative contribution (sales price < varia...

Ideal vs Real World Ideal World: Unlimited resources Equal contribution margins All customer o...

Why Talk About Risk? So far, we focused on maximizing contribution margin. But business also invo...

The Situation: A Meeting at the Company Girish (President) Praised the company’s performance — n...

What is a Vision Statement? A Vision Statement describes what the company wants to become in the...

What is Budgeting? Budgeting is a structured planning process developed over time. It involves ...

📌 Why Different Types of Budgets? Organizations face different operational needs, resource constr...

Budgeting is not just about forecasting numbers—it is a strategic management tool that guides pla...

1. Imposed Budget Also known as Top-Down Budgeting Suitable for: Start-ups Small businesses Ti...

1. Sales Forecast Month Last Year Sales (KG) Forecasted Sales (KG) Selling Price (Rs./KG) ...

1. Planning and Controlling in Budgeting Planning is the primary objective of the budgeting exe...

1. Role of Budget in Performance Monitoring Budgets are prepared as part of the planning process...

1. Importance of Setting Standards Standards are critical for effective control in budgeting. T...

1. Purpose of Variance Analysis Compares actual performance with budgets and standards. Helps ma...

1. Variable Overhead Variance (VOH) Concepts VOH Rate: Pre-determined during budgeting. Applied...

1. Introduction In many industrial products (e.g., pharmaceuticals, food), multiple materials or...

1. Introduction Variance analysis is not limited to costs—it also applies to revenues. Actual sa...

1. Variance Reporting Process The IT department typically generates and circulates variance repo...