JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD

Course Objective

To understand the components of product cost, their calculation methods, and

their control.

Course Outcome

Students will be able to understand a) Fundamentals of Management accounting

and Cost accounting b) Cost analysis c) Marginal costing d) Budget and Budgetary controls.

UNIT - I

Introduction to Management Accounting, Cost analysis and Control: Management accounting Vs. Cost accounting vs. financial accounting, Role of accounting information in planning and control, Cost concepts and Managerial use of classification of costs. Cost analysis and control: Direct and Indirect expenses, allocation and apportionment of overheads, calculation of machine hour rate. Activity based costing.

UNIT - II

Costing for Specific Industries: Unit costing, Job Costing, Cost Sheet and tender and process costing and their variants, treatment of normal losses and abnormal losses, inter-process profits, costing for by-products and equivalent production.

UNIT - III

Marginal Costing I: Introduction, Application of Marginal costing in terms of cost control, profit planning, closing down a plant, dropping a product line, charging general and specific fixed costs, fixation of selling price. Make or buy decisions, key or limiting factor.

UNIT - IV

Marginal Costing II: Selection of suitable product mix, desired level of profits, diversification of products, closing down or suspending activities, level of activity planning. Break-even analysis: application of BEP for various business problems. Inter-firm comparison: need for inter-firm comparison, types of comparisons, advantages.

UNIT - V

Budgetary Control: Budget, budgetary control, steps in budgetary control, Flexible budget, different types of budgets: sales budget, Cash budget, Production budget, Performance budgets, Zero Based Budgeting; An introduction to cost audit and management audit. Standard Costing: Standard Cost and Standard Costing, Standard costing Vs Budgetary control, Standard costing Vs estimated cost, Standard costing and Marginal costing, analysis of variance, Material variance, Labor variance and Sales variance.

Suggested Readings:

• Hansen Mowen, Cost and Management Accounting& Control, Thompson Publications 2012
• S. P. Jain and K. L. Narang, Cost and Management Accounting, Kalyani Publishers, New Delhi, 2006.
• M. Y. Khan, P. K. Jain, Management Accounting: Theory and Problems, TMH, New Delhi, 4/e, 2007.
• James Jiambalvo, Managerial Accounting, John Wiley & Sons, Inc. New Delhi, 2007.
• Atkinson, Banker, Kaplan and Young, Management Accounting, PHI, 2006.
• Manash Gupta, Cost Accounting Principles and Practice, Pearson Education, 2006