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Strategic Cost Management
The objective of this course is to -
- Apply relevant knowledge, skills and exercise professional judgment in selecting and applying strategic management accounting techniques in different business contexts
- Contribute to the planning, control and evaluation of the performance of an organization and its strategic and operational development
Course Outcomes (COs):
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Course |
Learning outcome (at course level) |
Learning and teaching strategies |
Assessment Strategies |
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Paper Code |
Paper Title |
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ATG 424
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Strategic cost Management
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CO90:Describe some of the techniques and processes that are available to assist managers in planning and controlling organizational activities; CO91:Analyze the processes involved in identifying, measuring, analyzing, interpreting and communicating information to managers in pursuit of the organization’s goals; CO92:Explain the role of cost information in organizations; CO93:Analyze the linkage between cost data and systems and the organization of activities and resource flows in a range of manufacturing and service activities; CO94:Apply appropriate cost allocation techniques to a variety of costing variety of costing problems; CO95:Develop strategies for managing costs; CO96: Explain the role of cost data in pricing decisions. |
Approach in teaching: Interactive Lectures, Discussion, Tutorials, assignments.
Learning activities for the students: Self-learning assignments, Effective questions, Giving tasks,
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Class test, Semester end examinations, Quiz, Solving problems in tutorials, Assignments, Individual projects |
Introduction to Strategic Cost Management Concept of Strategic Cost Management; Components of SCM, Limitations of Traditional Cost Management, Traditional vs. Strategic Cost Management
Cost Control and Cost Reduction–basics, process, methods and techniques of cost reduction programme.
Total Quality Management(TQM): Six C’s of TQM, Implementation of TQM, Criticism of TQM,
Just In Time(JIT): Essential Pre-requisites of JIT system, Impact, Performance measurement, Back-flushing in JIT system.
Life cycle costing: Product life cycle, life cycle characteristics, strategies, benefits, uses.
Transfer Pricing: Utility, methods: market-based, Cost-based and Negotiation based Transfer pricing, Transfer Pricing Decisions in different Circumstances.
Process Innovation and Business Process Re-engineering: Process innovation, Principles of BPR, Main stages, difference between BPR and PI.
Pareto Analysis: Usefulness and application
Target Costing: Advantages, main features, components of target costing system, problems with target costing, impact on profitability, target costing control points, implementation of target costing system.
Value chain analysis: Concept,value chain linkages; Internal linkages; Supplier linkages; Customer linkages; Role of value-chain in decision analysis.
Kaizen Costing: Meaning, Target costing v/s kaizen costing, Benchmarking, Types, prerequisites and steps of benchmarking,
Pricing Strategies/ Decisions: Theory & Principles of Product Pricing, Pricing – New Product, Finished Products & Pricing of Services, Sensitivity Analysis in Pricing Decisions, Pricing Decision under Special Circumstances, Pricing Strategies
1. Lal, Jawahar (2016). Strategic Cost Management.Himalaya Publishing House.
2. Hilton, Ronald W., Maher, Michael W. &Selto, Frank A. (2004). Cost Management: Strategies for Business Decisions. McGraw Hill Irwin.
3. Shank, John K. &Govindarajan, Vijay. (2008). Strategic Cost Management.The Free Press. Unit
1. Blocher, Edward J., Chen, Kung H., Cokins, Gary & Lin, Thomas W. (2006). Cost Management: A Strategic Emphasis. McGraw Hill Education (India) Ltd.
2. Eldenburg, Leslie G. & Wolcott, Susan K. (2010). Cost Management. John Wiley and Sons
3. Hansen, Don R. &Mowen, Maryanne M. (2005).Cost Management, Accounting and Control. Cengage Learning (India) Ltd.
