Strategic Cost Management

1. Introduction to Strategic Cost Management and Management Accounting

 Management concepts and strategic cost management
 Management accounting and its objectives
 Financial, cost, and management accounting
 Management information systems
 Accounting system and designs, management control systems
2. Cost Concepts, Classifications, and Cost Behavior
 Cost accounting and information system
 Classification of costs
 Cost Behavior, relevant range, fixed and variable costs
 Separation of mixed costs
 Other relevant cost concepts
3. Product Costing – Absorption Costing and Variable Costing
 Absorption costing and variable costing
 Income statement under absorption costing and variable costing
 Reconciliation of net income under different approaches
4. Cost-Volume-Profit-Analysis
 Key concepts of CVP analysis, break-even point, and target net income
 Different CVP terminologies
 CVP analysis as applied to sales mix
 Operating leverage and degree of operating leverage
5. Activity Based Costing and Service Cost Allocation
 Activity Based Costing and Activity Based Management
 ABC as compared with traditional costing
 Allocation of service/support costs(direct, step, algebraic)
6. Standard Costing for Cost Control
 Standard costing and variance analysis for materials and labor
 Overhead variances and their different analysis (1,2,3, and 4 way)
 Price, mix, and yield variances
7. Business Planning and Short-Term Budgetary System
 Operating Budget
 Financial Budget
 Master Budget Preparation and Analysis
8. Differential Cost Analysis
 Determination of relevant and irrelevant costs
 Quantitative and qualitative analysis applied in decision-making
 Non-routine decision making
o Make or buy
o Accept or reject a special order
 o Shut down or continue operations
o Drop or retain a segment or product line
o Sell as is or process further
o Profit Maximization
o Replace or retain
9. Responsibility Accounting and Performance Measures
 Concepts of Responsibility Accounting
 Goal congruence
 Decentralization
 Responsibility centers (cost, revenue, profit, investment)
 Different kinds of performance evaluation techniques
10. Transfer Pricing and Pricing Decisions
 Principles of Transfer Pricing
 Determination of the optimal transfer price
 Market vs cost vs negotiation-based transfer pricing
 Different factors affecting pricing decisions
 Cost-plus pricing formulas
 Application of mark-up percentages
11. Balanced Scorecards and Nonfinancial Measures in Performance Evaluation
 Definition and objectives of balanced scorecards
 Development of balanced scorecards
 Nonfinancial factors affecting performance evaluation