Accounting for Planning, Decision-Making, and Control (10 Days)

Introduction:

Managerial accounting offers critical financial and non-financial information to business managers and internal decision-makers. This course delves into strategic information, planning, and control accounting, exploring how managerial accounting data is gathered, stored, and utilized for decision-making. Participants will study managerial accounting concepts, cost accounting principles, and organizational accounting theories, equipping them with the necessary skills for effective decision-making in today’s complex business environment. While financial accounting practices such as audits, budgets, and financial statements are commonly known, managerial accounting often receives less attention. This course aims to bridge that gap by highlighting the relevance and benefits of managerial accounting in strategic planning and decision-making.

Objectives:

At the end of this Strategic Information, Planning, and Control Accounting for Decision-Making course, participants will be able to:

• Explain accounting concepts and interpret accounting information in relation to strategy.
• Utilize financial data effectively in decision-making processes.
• Structure decisions, particularly under make-or-buy scenarios.
• Develop and evaluate plans to achieve desired outcomes.
• Control deviations from expectations to industry standards.
• Communicate accounting information clearly in both written and oral forms.
• Identify outdated financial practices and correlate them with cost structures.
• Coordinate budgeting and control activities effectively.
• Differentiate between managerial and financial accounting.
• Analyze cost, volume, and profit to support decision-making.
• Implement control measures for fixed, variable, and mixed costs.
• Contribute to capital expenditure decisions.
• Plan within the framework of managerial accounting.
• Discuss policies and components that impact managerial accounting.

Training Methodology:

• Case Studies
• Group Discussions
• Interactive Workshops
• Simulation Exercises
• Financial Modeling

Course Outline:

Unit 1: Introduction to Managerial Accounting: A Perspective

• The purpose of managerial accounting
• Differences between managerial and financial accounting
• Managerial accounting and cost accounting
• The function of management
• Role of managers in managerial accounting
• Implementation of managerial accounting

Unit 2: Cost Concepts, Terms, and Classification

• Costs for various purposes
• Cost classification
• Functional costs
• Period costs and product costs
• Fixed, variable, and mixed costs
• Costs in planning, control, and decision-making

Unit 3: Patterns of Cost Behavior

• Understanding cost behavior
• Fixed costs: committed vs. discretionary
• Variable costs
• Semi-variable expenses
• Contribution margin method
• Contribution margin vs. gross profit

Unit 4: Cost-Volume-Profit & Break-Even Analysis

• Concepts of cost-volume-profit and break-even
• Cost-volume-profit analysis
• Income target calculations
• Margin of safety calculations
• Sales mix analysis
• Break-even analysis

Unit 5: Responsibility Accounting

• Definition and importance of responsibility accounting
• Units of measure in responsibility accounting
• Budgeted capital costs and responsibility accounting

Unit 6: Sunk Costs

• Definition and relevance of sunk costs
• Decision-making involving sunk costs
• Comparative analysis: make-or-buy decisions
• Further processing vs. selling decisions

Unit 7: Capital Budgeting

• Definition and methods of capital budgeting
• Project sequencing and rationing
• Management processes for capital budgeting
• Investment decision-making systems

Unit 8: Cost Types and Evaluation

• Evaluation of cost centers
• Return on Investment (ROI) and Residual Income (RI)
• Profit planning systems
• Cost center management and ROI analysis

Unit 9: Quantitative Evaluation Methods

• Overview of financial ratios
• Liquidity ratios
• Activity ratios
• Leverage ratios
• Profitability ratios
• Market ratios

Unit 10: Cash Flow Statement: Key Elements

• Forecasting and efficiency
• Operating, investing, and financing sections
• Cash reserve accounts
• Relationship between cash flow and financial statements