Syllabus of S4 – STRATEGIC MANAGEMENT ACCOUNTING

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syllabus of S4 Strategic Management Accounting

Syllabus GRID:

Here is the grid for Syllabus of S4 Strategic Management Accounting.

GRIDWEIGHTAGE
COST PLANNING, ANALYSIS AND TECHNIQUES
1.      Cost Planning
2.      Cost Analysis
3.      Cost Management Techniques
4.      Externally Oriented Cost Management Techniques
25%
PRICING AND PRODUCT DECISIONS
5.      Relevant Costs
6.      Short-term decisions
7.      Risk and uncertainty
8.      Linear programming: the graphical method
9.      Linear programming: the simplex method
10.   Multi-product breakeven analysis
11.   Pricing decisions and pricing strategies
40%
PERFORMANCE MANAGEMENT AND RESPONSIBILITY CENTRE
12.   Budgetary Control
13.   Performance Evaluation
14.   Measuring performance in Divisionalised businesses
15.   Transfer pricing
35%
TOTAL100%

Detailed Syllabus Contents:

The detailed Syllabus of Strategic Management Accounting for upcoming attempt is given below.

PART – A

COST PLANNING, ANALYSIS AND TECHNIQUES

1. Cost Planning

  • Learning Curve

o What is learning curve theory?

o Its application in budgeting, variances and product costing including reverse calculation e.g. calculation of learning rate if cost is given at a certain level

  • Life Cycle Costing

o Concept of life cycle costing

o Application of target costing principles in service industry and its problems.

  • Value Analysis

o Concept of value analysis, what is value, types of values.                  

  • Functional Analysis

o Calculation of product life cycle cost and life cycle cost per unit (Note: Ignore time value of money in calculation of life cycle costs.)

  • Target Costing

o What is target costing and target cost?

o Calculation of Target cost gap

o How to close target cost gap? i.e. techniques for minimizing target cost gap.

o Application of learning curve in calculation of target cost of a product.        

  • Sell or process further decisions

2. Cost Analysis

  • Activity Base Costing (ABC)-only theory
  • Activity Base Management (ABM-)only theory
  • Direct Product Profitability (DPP-)only theory
  • Customer Profitability Analysis (CPA)- theoretical and numeric
  • Distribution Channel Profitability- only theory
  • Activity-based profitability analysis comparison of profit per unit if in ABC and Traditional system
  • Pareto analysis -only theory and graphical presentation

3. Cost Management Techniques

  • Traditional vs Modern Manufacturing Philosophy-only theory
  • Just-in-time (JIT)-only theory
  • Kaizen Costing -only theory
  • Total Quality Management

o What is quality management

o Cost of quality

o Types of cost of quality

  • Business Process Re-engineering- only theory

4. Externally Oriented Cost Management Techniques

  • The Value Chain

o What is value chain analysis

o Concept of primary and secondary value chain

o Role of management accountants in value chain for optimization of profit.

  • Supply Chain Management -only theory
  • Outsourcing

o Concept of outsourcing and its application in short term decisions.

  • Partnering, incentives and gain-sharing arrangements- only theory

PART – B

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
  • Relevant cost of Machinery used in contracts including increase or and decrease in its market value after the contract

6. Short-term decisions

  • Presentation guidelines
  • Acceptance/rejection of contracts
  • Minimum pricing or special contract 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

o Concept of value of information

o Calculation of value of perfect information

  • Sensitivity analysis in short term decisions
  • Simulation models- only theory

8. Linear programming: the graphical method

  • Concept of constraints and bottle necks, conceptual difference of single limiting factor and multiple limiting factors (only theory), Concept of slack and shadow price and their calculation.
  • Graphical method
  • Graphical method using simultaneous equations
  • Simplex method

9. Linear programming: the simplex method

  • Principles of the simplex method (Linear programming should only be tested for two products only)

10. Multi-product breakeven analysis

  • Drawing a basic breakeven chart
  • Drawing a basic Profit volume 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 chart and profit volume chart
  • Further aspects of breakeven analysis

11. Pricing decisions and pricing strategies

  • Demand base pricing
  • Other(Nonfinancial) issues that influence pricing decisions
  • Deriving the demand curve

o Deriving Demand equation

o Calculation of optimum profit using demand equation

o Calculation of profit maximizing price and profit maximizing output using demand curve

  • Full cost pricing
  • Marginal cost-plus/Mark-up pricing
  • Pricing based on mark-up per unit of limiting factor
  • Different Pricing strategies for new products

PART – C

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 -only theory
  • Performance evaluation in service industry using building block

14. Measuring performance in divisionalised businesses

  • Responsibility Centers
  • 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

Focus:

syllabus of S4 Strategic Management Accounting syllabus of S4 Strategic Management Accounting syllabus of S4 Strategic Management Accounting syllabus of S4 Strategic Management Accounting syllabus of S4 Strategic Management Accounting syllabus of S4 Strategic Management Accounting syllabus of S4 Strategic Management Accounting syllabus of S4 Strategic Management Accounting syllabus of S4 Strategic Management Accounting

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