Strategic Cost Management

Paper Code: 
ATG 424
Credits: 
6
Contact Hours: 
90.00
Max. Marks: 
100.00
Objective: 

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):

Course

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies

Paper Code

Paper Title

 ATG 424

 

Strategic cost Management

 

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,

 

Class test, Semester end examinations,  Quiz, Solving problems in tutorials, Assignments,  Individual projects

 

 

14.00
Unit I: 
.

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.

18.00
Unit II: 
.

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.

18.00
Unit III: 
.

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

18.00
Unit IV: 
.

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.

22.00
Unit V: 
.

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

Essential Readings: 

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

References: 

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.

Academic Year: