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Indian Institute of Management Bangalore

Management Accounting for Decision Making

Indian Institute of Management Bangalore via Swayam


Across organizations, managers are expected to have sound knowledge of finance and accounting. As part of their job, managers use large volumes of information produced by accounting systems to make business decisions every day.This business and management course will show you how accounting information is relevant to managers, and how it can be processed and analyzed for effective managerial decision-making. By examining accounting information that is extensively used across three key managerial functions of planning, decision-making and controlling, the course equips non-finance managers with basic accounting and finance skills. This course also discusses activity based costing, which provides insight on the cost structure of products and services.What sets this course apart is the practicing manager-centric approach that is a part of each week of the course. Whether you are a student or a practicing manager, this course will allow you to easily follow all topics and directly apply concepts in practice.What you'll learnBasics of AccountingProcess CostingCost AllocationActivity-based-costingCost Analysis for Decision MakingBudgetingVariant Analysis


Week 1: Introduction to Management Accounting
  • Financial and Cost Accounting
  • Basic Cost Terms and Cost Flow
  • Costing System
  • Preparation of Cost Sheet
  • Costing in Service Industry
  • Preparation of Cost Sheet in Service Industry
  • Financial, Cost and Management Accounting
Week 2: Product Costing
  • Methods of Product Costing
  • Job Costing
  • Customer Costing
  • Process Costing
  • Treatment of Process Losses
  • Joint and By-products
Week 3: Cost Allocation and Activity Based Costing
  • Indirect Cost
  • Method of Indirect Cost Allocation
  • Misallocation of Indirect Costs
  • Activity-based Costing
  • Implementation of Activity-based Costing
  • Activity-based Management
Week 4: Cost Analysis for Decision Making Module Overview
  • Absorption vs Marginal Costing
  • Behavior of Cost
  • Break-even Analysis
  • BEP in Multiproduct Environment
  • Pricing Decision
  • Make or Buy Decision
  • Discontinuing Product or Closing Down Divisions
  • Optimal Product mix
  • Operating Leverage
Week 5 : Budgeting
  • Strategic Planning and Budgets
  • Budgeting Process
  • Types of Budgets
  • Benefits of Budgets
  • Approaches to Budget Preparation
  • Preparation of Master Budget
  • Budget Slack
Week 6 : Variance Analysis
  • Setting Standards
  • Variance Analysis: General Framework
  • Variable Overhead Variance
  • Fixed Overhead Variance
  • Material Mix Variance
  • Sales and Sales Mix Variance
  • Investigating Variance

Taught by

M S Narasimhan

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