mc321

Performance Management

MC-321https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&ved=0CEkQFjAE&url=http%3A%2F%2Fiaa.umt.edu.pk%2Fprograms%2FData%2FMC321.doc&ei=2e6WUrbiComRrAfsz4CgDg&usg=AFQjCNG70ITtDrezrKsVey92e8aDQv5cdg&bvm=bv.57155469,d.bmk

Program M.Com

Credit Hours 3

Duration 15 Weeks / 30 sessions

Prerequisites Management Accounting (MC-318)

Resource Person Tahir Mahmood (ACCA–UK, FCA-PAK)

Counseling Timing Monday – Thursday11:00 a.m. – 12:30 p.m.

Contact

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Capsule Statement

The syllabus of Performance Management, builds on the knowledge gained in “Management Accounting”. This course equips the participants with more specialist capabilities which are covered in strategic management accounting.

The syllabus begins by introducing more specialised management accounting topics. There is some knowledge assumed from the course “Management Accounting”. The objective here is to ensure that the participants have a broader background in management accounting techniques.

The syllabus then considers decision-making. The participants need to appreciate the problems surrounding scarce resource, pricing and make-or-buy decisions, and how it relates to the assessment of performance. Risk and uncertainty are the factors of real-life decisions and the participants need to understand risk and be able to apply some basic methods to resolve the risks inherent in decision-making.

Budgeting is an important aspect of accountants’ lives. The syllabus explores different budgeting techniques and the problems inherent in them. The behavioral aspects of budgeting are important for accountants to understand, and the syllabus includes consideration of the way, individuals react to a budget. Standard costing and variances are then built on.

The syllabus concludes with performance measurement and control. This is a major area of the syllabus. The participants need to understand how a business should be managed and controlled. They should appreciate the importance of both financial and non-financial performance measures in management. Accountants should also appreciate the difficulties in assessing performance in divisionalised businesses and the problems caused by failing to consider external influences on performance.

Learning Objectives

After studying this course the participants should be able:

1. To explain, apply, and evaluate cost accounting techniques.2. To select and appropriately apply decision-making techniques to evaluate

business choices and promote efficient and effective use of scarce business resources, the risks and uncertainty inherent in business and controlling those risks.

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3. To apply budgeting techniques and evaluate alternative methods of budgeting, planning and control.

4. To use standard costing systems to measure and control business performance and to identify remedial actions.

5. To assess the performance of a business from both financial and non-financial viewpoint, appreciating the problems of controlling divisionalised businesses and the importance of allowing for external aspects.

Learning Methodology

The Course

Regularity and Punctuality

Regularity and punctuality will be very strictly observed. You have an allowance of only six absents (Out of 30 sessions). It includes the leaves that you get approved from your Batch Advisor. In case you are absent in seven classes, you will get ‘SA grade’ in the course i.e; failure due to short attendance. Regarding punctuality, you will be marked present only if you arrive in the class on time. Any absent during the presentation sessions will result in deduction of 1 mark each from the class participation marks. This means that the class participation marks can go into the negative as well. If you miss a Quiz, you get zero in that Quiz. You will lose 5 marks if you deliver your assignment / report after the due date.

Book Readings

You are supposed to read in advance the text chapters under discussion. Questions answered, relating to these text chapters, will contribute to the class participation marks.

Class Participation

Positive, healthy and constructive class participation will be monitored in each class. Particular emphasis will be given during the presentation sessions. The manner in which the question is asked or answered will also be noted. Your behavior as professional accountants in the class will contribute to the class participation marks.

Consultancy Service

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During this program, consider me as your consultant. You are free to discuss the progress of the course any time you want. However to avoid inconvenience, setting up of appointment is recommended.

In Case of Cheating

In real world outside the classroom, students do not often work individually. They typically work in teams and help each other extensively. I have no objection to you getting help from me or other students. I encourage you to do so. But do not do your assignments / projects etc. by cheating.

Remember that if you cheat, you will lose your 10 marks out of your aggregate sessional evaluation in addition to the cancellation of the relevant quiz / assignment / project etc. whatever it will be. There is no second chance. The first time you are caught cheating, you will be penalized.

Hope you will have great time learning Performance Management.

Assessments

All of the activities held during the session will be evaluated; the final grades for the course will be as follows:

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Quizzes 20%

Assignments 10%

Mid-Term 15%

Attendance & Class Participation 5%

Project 5%

Presentations 10%

Final exam 35%

Total 100%

Recommended Text Books

Study Text-Performance Management (Paper F5) ACCA.

Reference Books

Management AccountingBy Collin Drury

Performance Measurement & Performance ManagementBy Coaffee Jon

Strategic Performance ManagementBy Lawrie , Gavin

Calendar of ActivitiesPerformance Management – Fall 2010

Session Activity Chapter Reading1-2

Activity Based Costing 2a

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Implications of switching to ABC Sales strategy, performance management and decision

making

3-4

Back Flush Accounting

Process of back flush accounting Contrast with traditional accounting Implications of BF accounting on performance

management Benefits of introducing BF accounting The decision to switch to BF accounting from

traditional process.

Assignment # 1

2d

5-6

Throughput Accounting

Interpretation of throughput accounting Suggest how a TPAR could be improved. Application of throughput accounting to a multi-

product decision-making problem

Quiz # 1

2e

7-8

Budgeting

Budgetary systems for an organization, including top-down, bottom-up, rolling, zero-base, activity- base, incremental and feed-forward control.

Usefulness and problems with different budget types (zero-base, activity- based, incremental, master, functional and flexible).

Assignment # 2

7, 8

9-10Forecasting Techniques

Time series, simple average growth models and estimates

Future value prediction from time series analysis using both additive and proportional data.

9

6/9

Quiz # 2

11-12

Standard Costing and Variance Analysis

Production overheads variances analysis Variable overhead total, expenditure and efficiency

variances Fixed overhead total, expenditure and, where

appropriate, volume, capacity and efficiency variances.

Assignment # 3

10, 12

13-14

Standard Costing and Variance Analysis

Operating statements in full absorption costing environment

Reconciliation of actual profit with budgeted profit

Quiz # 3

11

15-16

Pricing

Factors that influence the pricing of a product or service

Derivation of a straight line demand equation Equation for the total cost function (including volume-

based discounts)

Mid term

4

17-18

Pricing

Different price strategies including cost-plus pricing, skimming, penetration, product-line, discrimination and relevant cost

Assignment # 4

4

19-20Performance Measurement and Control

The scope of performance measurement Financial performance indicators (FPIS) for

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profitability

Quiz # 4

21-22

Performance Measurement and Control

Liquidity and risk in both manufacturing and service businesses.

Methods to improve FPIS. Non-financial performance indicators (NFPIS) Methods to improve NFPIS.

Assignment # 5

13

23


Balanced scorecard Building block model proposed by Fitzgerald and

Moon

Quiz # 5

13

24-25-26


Divisional performance and transfer pricing (Absorption and Marginal cost pricing)

Effect of transfer prices on the performance assessment of divisions and decisions made

Assignment # 6

14, 15

27-28 Presentations & Project

29-30


Return on investment (ROI) and residual income (RI) indicating their shortcomings

Value for money (VFM) as a public sector objective

Quiz # 6

14,15

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