[SMA-S4] STRATEGIC MANAGEMENT ACCOUNTING
PART – A WEIGHTAGE 25%
Cost Planning, Analysis and Techniques
1. Cost Planning
• Learning Curve
• Life Cycle Costing
• Target Costing
• Value Analysis
• Functional Analysis
2. Cost Analysis
• Activity Base Costing (ABC)
• Activity Base Management (ABM)
• Direct Product Profitability (DPP)
• Customer Profitability Analysis (CPA)
• Distribution Channel Profitability
• Activity-based profitability analysis
• Pareto analysis
3. Cost Management Techniques
• Traditional vs Modern Manufacturing Philosophy
• Just-in-time (JIT)
• Kaizen Costing
• Total Quality Management
• Business Process Re-engineering
4. Externally Oriented Cost Management Techniques
• The Value Chain
• Supply Chain Management
• Outsourcing
• Partnering, incentives and gain-sharing arrangements
[SMA-S4] STRATEGIC MANAGEMENT ACCOUNTING
PART – B WEIGHTAGE 40%
Pricing and Product Decisions
5. Relevant Costs
• Relevant Costs and Revenues
• Opportunity Cost
• The Relevant Cost of Materials
• The Relevant Cost of Labour
• The Relevant Cost of Overheads
6. Short-term decisions
• Presentation guidelines
• Acceptance/rejection of contracts
• Minimum pricing
• Extra shift decisions and overtime
• Make or buy decisions
• Either/or problems
• Shutdown problems
• Choosing between options
• Allocation of joint costs
7. Risk and uncertainty
• Risk and uncertainty in decision making
• Probability analysis and expected values
• Data tables
• The maximin, maximax and minimax regret bases for decision making
• Using the standard deviation to measure risk
• Decision trees
• The value of information
• Sensitivity analysis
• Simulation models
8. Linear programming: the graphical method
• Graphical method
• Graphical method using simultaneous equations
• Sensitivity analysis
9. Linear programming: the simplex method
• Principles of the simplex method
• Sensitivity analysis
• Using computer packages
• Using linear programming
• Breakeven Analysis in a Multi-Product Environment
10. Multi-product breakeven analysis
• Drawing a basic breakeven chart
• Breakeven point for multiple products
• Contribution to sales (C/S) ratio for multiple products
• Sales/product mix decisions
• Target profits for multiple products
• Margin of safety for multiple products
• Multi-product breakeven charts
• Further aspects of breakeven analysis
• Sensitivity analysis
11. Pricing decisions and pricing strategies
• Demand base pricing
• Other issues that influence pricing decisions
• Deriving the demand curve
• Profit maximizing price
• Full cost pricing
• Marginal cost-plus/Mark-up pricing
• Pricing based on mark-up per unit of limiting factor
• Pricing strategies for new products
• Other pricing strategies
[SMA-S4] STRATEGIC MANAGEMENT ACCOUNTING
PART – C WEIGHTAGE 35%
Performance Management and Responsibility Centre
12. Budgetary Control
• Flexible Budgets and Budgetary Control
• System design
• Using Spread sheets to build business models
• Rolling Budgets
• Behavioral implications of budgeting
• Budget Participation
• Use of Budgets as Targets
• Budget and Motivation
• Beyond Budgeting
13. Performance Evaluation
• Financial Performance Indicators
• Non-Financial Performance Indicators
• The Balanced Scorecard
• Benchmarking
14. Measuring performance in divisionalised businesses
• Responsibility Centres
• Return on Investment (ROI)
• ROI and decision making
• Residual Income (RI)
• Economic Value Added (EVA)
15. Transfer pricing
• Basic principles of transfer pricing
• General rules
• Use of market price as a basis for transfer prices
• Transfer pricing with an imperfect external market
• Transfer pricing when there is no external market for the transferred item
• Transfer pricing and changing costs/prices
• Identifying the optimal transfer price
• Negotiated transfer prices
• International transfer pricing
