SBM-NMIMS: COURSE TEACHING PLAN

Assurance of Learning AOL Specific

Course Code

Course Title Management Accounting for Decision Making

Mumbai Campus: Dr. Chandan Dasgupta, Dr. Hema Gwalani, Prof. Tarun Kehair, Prof.
Nikita Kedia, Dr. Lata Sreeram

Bengaluru Campus: Prof. Srinivas Mantripragada

Course
Instructor/s Hyderabad Campus: Dr Showkat Ahmad Busru & Dr Narender Vunyale

Indore Campus: Dr. Niranjan Shastri

Navi Mumbai Campus: Dr. Veerma Puri

Credit Value 1.5

Programme MBA Trimester II
& Trimester
Financial Accounting
Pre-requisite

CLO 1) Apply different costing frameworks to ascertain cost and support managerial
decision making (PLO 2b)

Learning CLO 2) Apply analytical techniques and frameworks to reflect critically on the proper
Objectives allocation of cost against specific business contexts (PLO 3b)

CLO 3) Build profit plans, evaluate performance; and suggest corrective measures across
functional areas of business (PLO 3c)

At the end of the course, students should be able to

Learning
1) Use management accounting information to recommend appropriate decisions.
Outcomes
2) Build budgets and analyze variances to support planning and decision-making

This course introduces managerial accounting, and emphasizes the analysis and evaluation of
accounting information from the perspective of managers in the processes of planning,
decision-making, and control.

Course The management accounting module focuses on accounting information and frameworks to
Description support internal decisions, primarily for planning and control purposes. Such internal
decisions could include pricing of products and services, new product introduction and
discontinuation, making or outsourcing, and typically require more detailed information at
the product and service level.

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 Specific assessment 3 AOL Instruments CLO CLO CLO
methods Credit (*) 1 2 3
Class Participation 10
Group Field Project 10 Rubric 10
Evaluation Mid Term 10 Embedded Questions 5 5
Pattern End Term 20 Embedded Questions 10 10
Total 50 15 15 10

Mid Term shall be due after the end of Session 6.

Topics / Sub -topics
Chapter detail
Details of pedagogy adopted for
Sessions Learning Outcome if / Article Reference /
class engagement - Class
Case Studies
provided session wise Exercises etc.

Understanding of Cost and Case lets and exercises Case let learning objectives
Managerial Accounting on cost classification
and cost sheet To understand Cost classification
How Management between fixed vs variable, direct
Accounting supports decision Case 1: vs indirect, Works/factory cost vs
making - pricing, 3 Dogs Bakery cost of production vs cost of sales
performance evaluation,
contracting, product To take managerial decision based
planning, budgeting Case 2: Godrej office on cost analysis
equipment
Difference between Financial To learn and practice creation of a
Accounting and Management cost sheet from the cost data and
1-2 Accounting Reading: Chapter 1 and cost ascertainment
To take managerial decisions like
2 (HDR) (Pg. 1-16 and
Cost Classification and its decision of selling price and
use in decision making - 35-59) Identification of cost reduction
Prime costs, overheads, areas
variable costs, fixed costs, Self-Learning
mixed costs, step variable
costs, factory Costs, cost of Chapter 2 (HDR) Solved
production, cost of sales Examples Pg. 64- 70,
75-79
Understanding Cost Sheet
components and Preparation Chapter 2 (HDR)
of Estimated Cost sheet Exercises Pg. 82- 84

Cost-Volume-Profit Case: Skyview Manor Case discussion

Analysis Reading: Chapter 3 Learning Outcomes
Understanding Cost-Volume- (HDR) (Pg. 87-109) To allow the students to determine
Profit analysis Self-Learning the level at which the company
Developing and using the Chapter 3 (HDR) Solved must operate to break even.
CVP equation Examples Pg. 114- 115, How to use breakeven analysis to
3 Breakeven point, Margin of 121-131 explore changes in business?
safety, Contribution, PV Chapter 3 (HDR)
Ratio Exercises Pg. 138-139
Introduction of new product
and service-feasibility study-
profit analysis and break-
even analysis

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 Topic: Managerial Case: TransWestern Case discussion
application of CVP Airlines
relationship Reading: Chapter 11 Learning Outcomes
(HDR)pg 582-599 To learn to identify relevant
Relevant costs, Decision information for managerial
making involving relevant Reading – Chapter 3 decision making
cost, opportunity cost, sunk (HDR) Pg 87-94 To learn to apply relevant
4 cost, incremental cost information in context of:
Introduction of new product Chapter 11 (HDR) Pg Introduction of new products
and service-feasibility study- 582-599 and services
profit analysis and break- revenue and profit
even analysis maximization

Relevant Costing, Demand

Analysis and Strategic
Decisions using game theory
Costing Systems Case: Camelback Case discussion
Overhead absorption under Communications Learning Outcomes
traditional method (HBS) – 9-185-179 To explain:
Why an adequate costing
Reading: Chapter 5 system is important for any
(HDR) (Pg. 201 - 207) organization?
Self-Learning Why over-aggregation of cost
5 Chapter 5 (HDR) Solved systems reports result in incorrect
Examples (Pg. 232- 241) product costs?
Chapter 5 (HDR)
Exercises Pg. 265-266 To show that the products that a
firm chooses to sell can be altered
by the type of cost system it has.
To understand how direct labor-
based cost systems work and how
they fail?
Overhead absorption under Case: JW Sports (B) Case Discussion
Activity Based Costing (HBS- UV7382)
Learning Outcomes
Application in manufacturing Reading Chapter 5 To understand the relationship
set up; ascertainment of cost (HDR) (Pg. 209-226) between the costs and prices.
Self-Learning To appreciate the difference
6
Chapter 5 (HDR) Solved between a conventional cost
Examples, Pg. 241-245, accounting system and a more
251-264 modern cost accounting system.
Chapter 5, (HDR) To appreciate activity-based
Exercises Pg. 267, 269- costing system
272

Budgeting Caselet David ltd Case discussion

Master budgets as a tool for
planning and control; Learning Outcomes
Reading -Chapter 6
budgeting process, what-if To prepare various kinds of
analysis; operational and (HDR) Pg 273-302 budgets for an organisation.
financial budgets
7 Types of budgets To understand the interlinkage of
a) Sales budget Self-Learning the different Budgets in the
b) Production budget organization.
Chapter 6 (HDR),
c) Material usage
budget Solved Examples, Pg. To prepare Budget keeping in
d) Material purchase mind the targeted profit of the
306-312,326-332
budget organization.
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 e) Manpower budget
f) Master budget
Chapter 6 (HDR),
Exercises Pg. 332-334,
335(6.36)-338

Flexible Budgeting and Case : Greek Art Caselet learning objectives

Variance analysis
Evaluation of various budget Reading: Chapter 7
related concepts – (HDR) Pg. 339-352; To understand the concept of cost
preparation of the flexible 355-359 variances.
budget
8 Quantity and price variances Self-Learning To analyse budgeted and actual
for material and labour data for material, labor, and
Variance Analysis overhead deviation is analysed
Chapter 7 (HDR) Solved
Examples Pg. 363-377
To write a profit reconciliation
(7-16 to 7-26), Pg. 385-
statement elucidating the reasons
389 (7-30 to 7-31) for deviation

Division Performance and Case: North Country Case discussion

Transfer Pricing Auto Inc (AG, Case 5- Learning Outcomes
Objectives of transfer 2, Pg 201) To understand the concepts of cost
pricing, Transfer pricing center, profit center and revenue
systems, Profit Center, Cost Reading: Chapter 22 center
9 Center, and revenue Center (HDR) Pg. 1189-1202 To understand how transfer
Self-Learning pricing systems operate for each
department – market price, full
Chapter 22 (HDR) retail price, full cost and variable
Solved Examples Pg. cost.
1211-1219 (22-16 to
22-22)
Division Performance and Case: Fastener Limited Case discussion
Transfer Pricing Reading: Chapter 22 Learning Outcomes
Evaluate Divisional (HDR) Pg. 1189-1202 To analyse a set of transfer pricing
Performance measurement Self-Learning solutions for divisional
10 performance measurement.
Chapter 22 (HDR)
Solved Examples Pg.
1211-1219 (22-16 to
22-22)

Reading List Textbook

and Management Accounting
References Datar, S.M., & Rajan, M. (2017). Horngren’s Cost Accounting: A Managerial Emphasis.
16th ed. Pearson.
(HDR)

Reference Text

Anthony R.N, Govindarajan V (2012). Management Control Systems, 12th Edition, Tata
McGraw Hill Education (India) Pvt. Ltd. (AG)

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Prepared by Faculty Area & Program chairpersons

Faculty Chair AOL Approved by Dean SBM

Approved by Associate Deans

Sticker for date of receipt and attachments rubric and project guidelines

Group Field Project Report Submission

 The objective of the group assignment is to help students to assimilate and apply concepts
related to cost ascertainment that are covered in sessions 1-5
 This is designed as a field activity. It is envisaged as an opportunity for students to interact
with small scale firms, cross pollinate with discussions in classroom, get some exposure to the
challenges faced by firms in their efforts to classify costs.
 This is envisaged as a group activity to allow discussion and debate between group members
on field observations.
 Students work in defined timelines and submit a field project report.
 Broad scope of the project includes:
o Identification:
 Identify any small-scale organization/partnership firm / proprietorship
involved in manufacturing or services. Firms solely involved in trading
activity cannot be selected.
 Understand the workflow process of the organization.
 Identify the product/service and the cost unit for cost ascertainment.
o Data Collection:
 Collect the cost and revenue data from the organization from primary /
secondary sources.
o Classification:
 Identify all costs into a) Direct or Indirect; b) Fixed or Variable
 Construct a basic cost sheet using information in (a) above
 Calculate the break-even point using information in (b) above
 Identify the difficulties faced in carrying out the above and how did you
resolve them (assumptions / additional information that was used / etc.)
 All submissions will undergo similarity checks.
 Late Submissions will attract negative marking.

Assessment Rubric for the Project Report

Excellent Satisfactory Needs Improvement

Identifying direct and All / Most costs are Substantial costs Incorrect classification
Indirect costs and Cost correctly classified correctly classified. of costs, errors in cost
Sheet preparation with appropriate Assumptions not sheet preparation.
assumptions. Cost clearly elucidated.

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 sheet with detailed Cost sheet is prepared (1-2 marks)
information regarding some information
(Out of 5 marks) various stages of costs missing.
prepared.
(3-4 marks)
(5 marks)

Identifying Fixed and All / Most costs are Substantial costs are Incorrect classification
Variable costs and correctly classified correctly classified of costs, with weak
Breakeven analysis with appropriate with appropriate breakeven analysis.
assumptions. Break assumptions. Break
even analysis even analysis (1-2 marks)
incorporates quality incorporates
(Out of 5 marks)
discussion on the satisfactory discussion
firm’s operations. on the firm’s
operations.
(5 marks)
(3-4 marks)

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