Management Accounting for Decision Making

Course Information

Course Length : 6 Weeks
Estimated Effort : 3 – 4 hours/ week

Course Overview

Managerial responsibilities involve using large volumes of information produced by accounting systems in order to take informed business decisions. Hence, managers are generally expected to have a sound knowledge of finance and accounting.

This IIMBx course on Management Accounting for Decision Making explores the relevance of accounting information to managers, and how it can be processed and analysed for effective managerial decision-making.

By examining accounting information that is extensively used across three key managerial functions—namely, 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 into the cost structure of products and services. What sets this course apart is the practicing manager-centric approach employed in each week of the course.

Professor M S Narasimhan

Course Instructor
Finance & Accounting
Indian Institute of Management Bangalore (IIMB)

Course Syllabus

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
  • Absorption vs. Marginal Costing
  • Behavior of Costs
  • 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. Standard Costing and Variance Analysis
  • Setting Standards
  • Variance Analysis: General Framework
  • Variable Overhead Variance
  • Fixed Overhead Variance
  • Material Mix Variance
  • Sales and Sales Mix Variance
  • Investigating Variance
  • Basics of Accounting
  • Process Costing
  • Cost Allocation
  • Activity-based-costing
  • Cost Analysis for Decision Making
  • Budgeting
  • Variant Analysis

Executives, students pursuing post graduate and anyone who wants to upskill themselves on Management Accounting.

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