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Management Accounting: Concepts and Strategic Costing Decision

Kanhaiya Singh

ISBN: 9788126556373

696 pages

eBook also available for institutional users 

INR 679


The book focuses on costing decision practices followed and practiced in the industry while taking various business operation decisions. Each chapter highlights the concepts of management accounting and links it to practical decision situations. Besides, there is an exhaustive coverage of new techniques in costing decisions such as Activity-Based Costing, Target Costing, Value Chain System, Price and Profitability Analysis, Balanced Scorecard, Global Perspective of Management Accounting, etc. It is written in an interactive manner which makes the readers understand and grasp the concepts comfortably. The numerical questions, both solved and unsolved, provided in the chapters are attributed towards decision-making situations.



About the Author


1 Management Accounting Fundamentals

1.1 Beyond Cost Cutting

1.2 Concept of Management and Cost Accounting: An Introduction

1.3 Financial Accounting and Its Features

1.4 Cost Accounting

1.5 Best Practices in Costing System

1.6 Management Accounting

1.7 Management Accounting Information and Their Use

1.8 Practical Implications of Management Accountancy

1.9 Cost Management for Competitive Advantage

1.10 Decision-Making Process in a Firm

1.11 Management Accounting in Global Perspective

1.12 Management Accounting as Profession

1.13 Limitations of Management Accounting


2 Materials Cost Control

2.1 Introduction

2.2 Functions of Material Control Department

2.3 Essential Features of Material Control Process

2.4 Responsibilities of the Purchase Department

2.5 Materials Issue Process

2.6 Material Control Techniques

2.7 Material Pricing Methods

2.8 Quantity of Material Procurement

2.9 Material Management at Stores

2.10 Inventory Control Techniques


3 Labor Cost and Overhead Cost Control

3.1 Introduction

3.2 The Issues Concerned with Labor Cost Control

3.3 Mechanism of Labor Cost Control

3.4 Labor Attrition

3.5 Recording of Timings

3.6 Methods of Work Study

3.7 Methods of Wage Payment

3.8 Overhead Cost Control


4 Cost Concepts, Cost Classification and Unit Cost Analysis

4.1 Introduction

4.2 Cost Classification

4.3 Cost sheet

4.4 Valuation of Closing Stock

4.5 Preparation of Production Account

4.6 Calculation of Cost and Selling Price

4.7 Preparation of Statement of Cost and Abridged Profit and Loss Account

4.8 Calculation of Missing Figures in the Statement of Cost


5 Cost Analysis: Job Order, Batch and Contract Costing

5.1 Introduction

5.2 Job Order Costing

5.3 Batch Costing

5.4 Contract Costing


6 Process Costing and Joint Costing

6.1 Introduction

6.2 Features of Process Costing

6.3 Difference between Process and Job Costing

6.4 Preparation of Process Account

6.5 Process Accounts with Scrap

6.6 Normal Loss, Abnormal Loss and Abnormal Gain

6.7 Joint Products and By-Products

6.8 Difference between Joint Product and By-Product

6.9 Joint Costs

6.10 Methods of Costing of Joint Products


7 Income Recognition under Marginal and Absorption Costing

7.1 Introduction

7.2 Marginal Costing

7.3 Absorption Costing

7.4 Analysis of Difference in Income

7.5 Practical Application of Absorption and Marginal Costing

7.6 Reconciliation of Net Income


8 Cost–Volume–Profit Analysis

8.1 Introduction

8.2 Profit

8.3 Contribution

8.4 Break-even (BE) Analysis

8.5 Application of PV Ratio

8.6 BE Chart

8.7 Uses of CVP Analysis

8.8 Assumptions of BE Analysis

8.9 Limitations of BE Analysis

8.10 Limitations of CVP Analysis

8.11 CVP Analysis

8.12 Multi-Product CVP Analysis


9 Standard Costing and Variance Analysis

9.1 Standard Costing

9.2 Need for Fixing Standards

9.3 Process of Standard Costing

9.4 Factors Determining Standards under Each Cost Component

9.5 Uses of Standard Costing

9.6 Benefits of Standard Costing

9.7 Limitations of Standard Costing

9.8 Relationship between Standard Costing and Budgetary Control

9.9 Standard Costing and Variance Analysis

9.10 Material Yield Variance

9.11 Labor Cost Variances

9.12 Idle Time Variance

9.13 Labor Yield Variance

9.14 Labor Mix Variance

9.15 Overhead Variances

9.16 Analysis of Variances

9.17 Sales Variances

9.18 Variances Based on Profits

9.19 Control Ratios


10 Budget and Budgetary Control System

10.1 Introduction

10.2 Essentials of a Budget Document

10.3 Budget Implementation Process

10.4 Different Kinds of Budget

10.5 Advantages of Budgets and Budgeting Exercise

10.6 Limitations of Budgeting

10.7 Budgetary Control Systems


11 Activity-Based Costing and Target Costing

11.1 Introduction

11.2 Activity-Based Costing

11.3 Rational of Allocation of Costs under an ABC System

11.4 Steps in an ABC System

11.5 Target Costing


12 Responsibility Accounting and Transfer Pricing

12.1 Introduction

12.2 Responsibility Center

12.3 Focus on ROI

12.4 Factors Affecting Responsibility Center’s Performance

12.5 Transfer Pricing


13 Strategic Costing Decisions

13.1 Introduction

13.2 Life Cycle Costing

13.3 Stages of LCC

13.4 Product Life Cycle Stages

13.5 Assessment of Life Cycle Costs

13.6 Important Components of LCC

13.7 Value Chain System

13.8 Utilization of Internal Linkages: A Case

13.9 Internal Value Chain Linkages

13.10 Internal Linkage: A Case Analysis

13.11 Throughput Accounting

13.12 A Plus and Minus Approach


14 Pricing Decisions and Strategies

14.1 Introduction

14.2 Objectives of Pricing

14.3 Factors Affecting Pricing Decisions

14.4 Cost Factors and Pricing

14.5 Pricing and Contribution

14.6 Pricing Methods in Practice


15 Short-Term Decision-Making Strategies

15.1 Introduction

15.2 Essentials of the Decision-Making Process

15.3 Cost–Benefit Analysis

15.4 Relevant and Irrelevant Costs and Benefits

15.5 Key Limiting Factor

15.6 Decision to Accept or Reject

15.7 Outsourcing Decisions

15.8 Add or Drop a Product

15.9 Joint Products (Decision to Sell Now or Process Further)

15.10 Product Mix Decisions


16 Management Accounting in Global Perspective

16.1 Introduction

16.2 Activity as a Focus

16.3 Change in Focus

16.4 Management Accounting in a Competitive World

16.5 Management Accounting and Global Environment

16.6 Global Management Accounting Principles

16.7 Management Accounting and Developed Costing Systems

16.8 Modern Cost Management Systems


17 Balanced Scorecard and Performance Evaluation

17.1 Introduction

17.2 Concept of Balanced Scorecard

17.3 Balanced Scorecard and Performance Evaluation

17.4 Design of a Balanced Scorecard

17.5 Variants of Balanced Scorecard

17.6 Decentralized Operations

17.7 Performance Measurement Techniques

17.8 Comparison of Balanced Scorecard and Self-Assessment for Business Excellence

17.9 Six Sigma Philosophy


18 Financial Statement Analysis

18.1 Introduction

18.2 Accounting Statements and Financial Analysis

18.3 Important Factors Impacting Communication of useful Information

18.4 Information Analysis

18.5 Ratio Analysis of Financial Statements

18.6 Advantages of Financial Ratio Analysis

18.7 Limitations of Financial Ratio Analysis

18.8 Summary of Financial Ratios


Additional Solved Problems


Key words

Review Questions

True or False

Fill in the Blanks

Problems for Practice

Case Analyses