Management Accounting
Module 1: Introduction to Management Accounting
Introduction
Uses of Financial Reports External users rely on financial reports: Investors – assess finan...
Basic Cost Terms and Concepts
R&D Project Decision Example Project cost: 100 m Estimated benefits (original): 160 m Amount ...
Costing System
1. Illustrative Example: Government Hospital Tender Context: You work for a government hospital...
Preparation Of Cost Sheet
Cost Sheet Preparation: Autocomp Ltd 1. Cost Sheet Overview Definition: Final output of the cos...
Costing in Service Industry
Service Sector Costing 1. Importance of Service Sector Contributes over 61 % of GDP (up from 59 ...
RK Forging Case Study Notes
Introduction Company: RK Forging, based in Coimbatore. Industries Served: Power, Automotive, O...
Module 02: Product Costing and Activity Based Costing
Methods of Product Costing
Broad Methods of Product Costing There are two broad methods of product costing: 1. Job Costing ...
Job Costing
1. Job as a Cost Object Definition: A job is treated as a cost object. All costs related to tha...
Customer Costing
1. Extension of Job Costing Definition: Customer costing extends job costing by pooling costs o...
Process Costing
1. Process Industries Definition: Firms producing identical products or services through a cont...
Treatment of Process Losses
1. Introduction Real‑world reality: Processes incur losses, wastage, defective units. Loss tim...
Joint and By-products Costing
1. Definitions & Context Joint Products: Two or more products of significant value emerging sim...
Indirect Cost
1. Definitions Direct Costs Traceable to a specific product Examples: wood, plywood, laminatio...
Method of Indirect Cost Allocation
1. Allocation Principle Cause & Effect: A product should absorb the cost of any department whos...
Module 03: Cost Analysis for Decision-Making
Costing Framework for Decision Making
Introduction Let us start our discussion with a costing framework suitable for decision making. ...
Behavior of Cost
Introduction We started our discussion on fixed and variable costs and how they influence cost. ...
Break-even Analysis
Introduction Your friend owns an ice-cream shop. She is concerned because two more shops have op...
BEP Analysis in Multiproduct Situation
Single-Product BEP: Fortune Pharma Example Selling Price: ₹240 per case Variable Cost: ₹200 pe...
Pricing Decision
Importance of Pricing Strategy Pricing is crucial in competitive markets. Aggressive pricing bo...
Make or Buy Decision
Facing Competition Through Cost Leadership Firms achieve cost leadership by: Outsourcing non-c...
Discontinuing Product or Closing Down Division
Why Do Firms Close Down Products or Divisions? Due to negative contribution (sales price < varia...
Optimal Product Mix
Ideal vs Real World Ideal World: Unlimited resources Equal contribution margins All customer o...
Measuring Operating Risk
Why Talk About Risk? So far, we focused on maximizing contribution margin. But business also invo...
Module 04: Budgeting and Variance Analysis
Introduction
The Situation: A Meeting at the Company Girish (President) Praised the company’s performance — n...
Strategic Planning and Budgets
What is a Vision Statement? A Vision Statement describes what the company wants to become in the...
Budgeting Process
What is Budgeting? Budgeting is a structured planning process developed over time. It involves ...
Types of Budgets
📌 Why Different Types of Budgets? Organizations face different operational needs, resource constr...
Benefits of Budgets
Budgeting is not just about forecasting numbers—it is a strategic management tool that guides pla...
Approaches to Budget Preparation
1. Imposed Budget Also known as Top-Down Budgeting Suitable for: Start-ups Small businesses Ti...
Preparation of Master Budget
1. Sales Forecast Month Last Year Sales (KG) Forecasted Sales (KG) Selling Price (Rs./KG) ...
Budget Slack
1. Planning and Controlling in Budgeting Planning is the primary objective of the budgeting exe...
Variance Analysis
1. Role of Budget in Performance Monitoring Budgets are prepared as part of the planning process...
Setting standards
1. Importance of Setting Standards Standards are critical for effective control in budgeting. T...
Variance Analysis: General Framework & Labour Cost Variance
1. Purpose of Variance Analysis Compares actual performance with budgets and standards. Helps ma...
Variable & Fixed Overhead Variance
1. Variable Overhead Variance (VOH) Concepts VOH Rate: Pre-determined during budgeting. Applied...
Material Mix and Yield Variance
1. Introduction In many industrial products (e.g., pharmaceuticals, food), multiple materials or...
Sales and Sales Mix Variance
1. Introduction Variance analysis is not limited to costs—it also applies to revenues. Actual sa...
Investigating Variance
1. Variance Reporting Process The IT department typically generates and circulates variance repo...