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(M5) Management Accounting: Part - A Weightage 15%

The document discusses various management accounting techniques used for forecasting, budgeting, standard costing, variance analysis, project appraisal, cost analysis, and short-term finance management. Specifically, it covers topics such as linear regression analysis, sales forecasting, budget preparation, standard cost setting, variance analysis, net present value, activity-based costing, throughput accounting, cash flow forecasting, receivables and payables management, and inventory management. The overall aim is to provide managers with tools to help with planning, decision making, and performance evaluation.

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Ahmed Raza
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0% found this document useful (0 votes)
34 views7 pages

(M5) Management Accounting: Part - A Weightage 15%

The document discusses various management accounting techniques used for forecasting, budgeting, standard costing, variance analysis, project appraisal, cost analysis, and short-term finance management. Specifically, it covers topics such as linear regression analysis, sales forecasting, budget preparation, standard cost setting, variance analysis, net present value, activity-based costing, throughput accounting, cash flow forecasting, receivables and payables management, and inventory management. The overall aim is to provide managers with tools to help with planning, decision making, and performance evaluation.

Uploaded by

Ahmed Raza
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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(M5 )MANAGEMENT ACCOUNTING

PART – A WEIGHTAGE 15%


Forecasting and Budgeting Techniques

1 Forecasts

• Forecasting using historical data

• Linear regression analysis

• Scatter diagrams and correlation

• Sales forecasting

• Regression and forecasting

• Components of time series

• Finding the trend

• Finding the seasonal variations

• Time series analysis and forecasting

• Using spreadsheet packages to build business models

2 Budgeting

• Why do organizations prepare budgets

• Framework for budgeting

• Steps in Budget preparation

• Functional budgets

• Budgetary Planning and Control system

• Sales Budgets
• Production Budget and related budgets

• Cash Budgets

• Master Budgets

• Capital Expenditure Budgets

• Monitoring procedures

• Fix and flexible budgets

• Preparing flexible budgets


PART – B WEIGHTAGE 15%
Standard Costing and Variance Analysis

3 Standard Costing

• Uses of Standard costing

• Setting standard for manufacturing

• Setting standard in service industries

• Updating standards

• Budgets and standard compared

• Criticism of standard costing

4 Variance Analysis, Interpretation and Profit Reconciliation

• Variances

• Direct material cost variances

• Direct labour cost variances

• Variable overhead variances

• Fixed overhead variances


• Sales variances

• Operating statements

• Variances in a standard marginal costing

• Working backwards approach to variance analysis

• Material mix and yield variances

• Labour mix and yield variances

• Sales mix and quantity variances

• Investigate variance or not to investigate variance

• Variance investigation model

• Controllability principle in Joint Variances

• Interpreting variances

• Profit reconciliation
PART – C WEIGHTAGE 20%
Project Appraisal Methods

5 Capital Investment decisions

• Process of investment decision making

• Post Audit

• Payback Method

6 DCF techniques of investment appraisal

• The net present value method

• The internal rate of return method

• NPV and IRR compared


• Discounted payback

7 Taking account of taxation and inflation

• Allowing for inflation

8 Additional aspects of investment decision making

• Mutually exclusive projects with unequal lives

• Asset replacement

• Project abandonment

• Capital rationing

• Sensitivity analysis

• Probability analysis and long-term decisions


PART – D WEIGHTAGE 15%
Cost Analysis

9 Break Even Analysis

• Breakeven Analysis and Contribution

• Breakeven Point

• Contribution/Sales (C/S) Ratio

• Margin of Safety

• Breakeven arithmetic and profit targets

• Breakeven charts and profit/volume graphs

• Limitation of Breakeven analysis

10 Limiting factor Analysis

• Limiting factors
• Limiting factor analysis and restricted freedom of action

• Make or buy decisions and scarce resources

• Limiting factors and shadow prices

• Using limiting factors analysis


PART - EWEIGHTAGE 20%
Modern Costing Techniques

11 Marginal Cost Analysis

• Pricing decisions

12 Activity Based Costing

• Reasons for the development of ABC

• Outline of an ABC system

• Absorption costing versus ABC

• Marginal costing versus ABC

• Introducing an ABC system

13 Throughput and Back flush Accounting

• The theory of constraints (TOC)

• Throughput accounting

14 Environmental costing

• The importance of environmental costs

• Environmental footprints

• Types of cost

• Environmental cost accounting


PART - FWEIGHTAGE 15%
Managing Short-Term Finance

15 Working Capital Management

• Working capital

• Working capital ratios

16 Cash flow forecasts

• Cash flows and profit

• Purpose of cash forecasts

• Cash budgets in receipts and payments format

• Cleared funds cash forecasts

• Cash forecasts based on financial statements

• Need for cash management

17 Cash Management

• Budgeting for borrowings

• Overdrafts

• Loans

• Trade payables as a source of finance

• Export finance

• Cash surpluses

• Cash investments: bank and building society accounts

• Marketable securities: prices and interest rates

• Other types of investment


18 Receivables & Payables Management

• What is credit control?

• Total credit

• The credit cycle

• Payments terms and settlement discounts

• Maintaining information on receivables

• Collecting debts

• Credit insurance, factoring and invoice discounting

• Managing payables

19 Inventory Management

• Managing inventories

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