Cost Management

 
Cost Management
Level of Knowledge: Expert Knowledge

Objectives...
To gain expert knowledge of..
a. use of costing data for decision-making and control, and
b. emerging modern cost management concepts.
Contents...
1. Cost concepts in decision-making; Relevant cost, Differential cost, Incremental cost and Opportunity cost.
2. Objectives of a Costing System; Inventory valuation; Creation of a Database for operational control;    Provision of data for Decision-Making.
3. Marginal Costing; Distinction between Marginal Costing and Absorption Costing; Break-even Analysis, Cost-Volume-Profit Analysis. Various decision-making problems.
4. Standard Costing and Variance Analysis.
5. Pricing strategies: Pareto Analysis
6. Target costing, Life Cycle Costing
7. Costing of service sector.
8. Just-in-time approach, Material Requirement Planning, Enterprise Resource Planning, Total Quality Management and Theory of constraints.
9. Activity-Based Cost Management, Bench Marking; Balanced Score Card and Value-Chain Analysis.
10. Budgetary Control; Flexible Budgets; Performance budgets; Zero-based budgets.
11. Measurement of Divisional profitability pricing decisions including transfer pricing.
12. Quantitative techniques for cost management, Linear Programming, PERT/CPM, Transportation problems, Assignment problems, Simulation, Learning Curve Theory.

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Advanced Management Accounting
Objective:-
To apply various management accounting techniques to all types of organizations for
planning, decision making and control purposes in practical situations.
To develop ability to apply quantitative techniques to business problems
1. Cost Management
(a) Developments in the business environment; just in time; manufacturing resources
planning; (MRP); automated manufacturing; synchronous manufacturing and back flush
systems to reflect the importance of accurate bills of material and routings; world class
manufacturing; total quality management.
(b) Activity based approaches to management and cost analysis
(c) Analysis of common costs in manufacturing and service industry
(d) Techniques for profit improvement, cost reduction, and value analysis
(e) Throughput accounting
(f) Target costing; cost ascertainment and pricing of products and services
(g) Life cycle costing
(h Shut down and divestment.
2. Cost Volume Profit Analysis
(a) Relevant cost
(b) Product sales pricing and mix
(c) Limiting factors
(d) Multiple scarce resource problems
(e) Decisions about alternatives such as make or buy, selection of products, etc.
3. Pricing Decisions
(a) Pricing of a finished product
(b) Theory of price
(c) Pricing policy
(d) Principles of product pricing
(e) New product pricing
(f) Pricing strategies
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(g) Pricing of services
(h) Pareto analysis
4. Budgets and Budgetary Control
The budget manual, Preparation and monitoring procedures, Budget variances, Flexible
budgets, Preparation of functional budget for operating and non-operating functions, Cash
budgets, Capital expenditure budget, Master budget, Principal budget factors.
5. Standard Costing and Variance Analysis
Types of standards and sources of standard cost information; evolution of standards,
continuous -improvement; keeping standards meaningful and relevant; variance analysis;
disposal of variances.
(a) Investigation and interpretation of variances and their inter relationship
(b) Behavioural considerations.
6. Transfer pricing
(a) Objectives of transfer pricing
(b) Methods of transfer pricing
(c) Conflict between a division and a company
(d) Multi-national transfer pricing.
7. Cost Management in Service Sector
8. Uniform Costing and Inter firm comparison
9. Profitability analysis - Product wise / segment wise / customer wise
10. Financial Decision Modeling
(a) Linear Programming
(b) Network analysis - PERT/CPM, resource allocation and resource leveling
(c) Transportation problems
(d) Assignment problems
(e) Simulation
(f) Learning Curve Theory
(g) Time series forecasting
(h) Sampling and test of hypothesis