Managerial Accounting notes – KNEC Diploma

Managerial Accounting

These notes applies to the following Courses as examined by KNEC

• KNEC: Diploma in Business Management – Module III

• KNEC: Diploma in Supply Chain Management – Module III

Topics covered in this unit/subject are as follows:

Topic 1: Nature and scope of managerial accounting
Topic 2: Decision trees
Topic 3: Cost estimation
Topic 4: Cost volume profit analysis (C-V-P)
Topic 5: Marginal costing
Topic 6: Capital expenditure decisions
Topic 7: Transportation technique
Topic 8: Assignment technique
Topic 9: Queuing theory
Topic 10: Performance evaluation techniques
Topic 11: Budget and Budgetary control
Topic 12: Emerging trends and issues in managerial accounting

Introduction
This module unit is intended to equip the trainee with the necessary knowledge, skills and attitudes that will enable him/her analyze and interpret cost data for the purpose of decision making in an organisation

General Objectives
At the end of this module unit, the trainee should be able to:

1. Carry out estimating and forecasting costs using various methods
2. Recognize the role of managerial accounting in decision making
3. Carry out step-by-step process in solving decision making problems
4. Carry out performance evaluation for a business
5. Prepare a budget in a business

Topic 1: Nature and Scope of Managerial Accounting

• Definition of managerial accounting
• The role of managerial accounting in production, marketing and finance
• Differences between managerial accounting and financial accounting

Topic 2: Decision Theory

• Definition of decision trees
• The structure of decision trees
• Use of decision trees

Topic 3: Cost Estimation

• Definition of cost estimation
• Cost estimation methods

Topic 4: Cost-Volume-Profit Analysis (C-V-P)

• Definition of cost volume profit analysis
• Terms used in cost volume profit (C-V-P)
• Assumptions of C-V-P
• Limitations of C-V-P analysis
• Break Even Point (B-E-P)
• Calculation of break even point

Topic 5: Marginal Costing

• Definition of marginal costing
• Key factor
• Decision-making using marginal costing

Topic 6: Capital Expenditure Decisions

• Nature of capital expenditure decision
• Non-discounting cash flow techniques
• Time value of money concept
• Discounting cash flow methods
• Benefits and limitations of each technique

Topic 7: Transportation Techniques

• Nature of transportation techniques
• Requirements for application of transportation techniques
• Transportation techniques

Topic 8: Assignment Techniques

• Nature of assignment techniques
• Requirements for application of assignment techniques
• Assignment techniques for minimizing and maximizing problems

Topic 9: Queuing

• Definition of a queue
• Elements of a queue
• Terms used in queuing theory
• Application of queuing theory

Topic 10: Performance Evaluation

• Definition of performance evaluation
• Need for performance evaluation
• Techniques for performance evaluation

Topic 11: Budgeting and Budgetary Control

• Definition of budgeting and budgetary control
• Preparation of functional budgets
• Preparation of master budget

Topic 12: Emerging Trends and Issues in Managerial Accounting

• Emerging trends and issues in Managerial Accounting
• Challenges posed by the Accounting emerging trends and issues in Managerial Accounting
• Ways of coping with the challenges posed by the emerging trends and issues in Managerial Accounting