The text, Strategic Cost Management, presents a comprehensive coverage of modern cost management techniques to fulfil the needs of business organizations in the new competitive environment. This book provides a new framework to the vital issue of cost management, use of cost information to design a firm ’s competitive strategy and provide enhanced value to customers, shareholders and other stakeholders. The book creates a logical linkage between the concepts and procedures and how these can be used in practice by business organizations. It discusses cost management techniques in detail and their role in strategic decision-making of a firm and building and sustaining competitiveness.
Structure of the Book
The book is divided into four parts :
Part one – ‘Overview and Basic Concepts’ covers Cost Management : Nature and Scope; Basic Cost Concepts.
Part Two – ‘Activity-Based Control and Management’ discusses Activity-Based Costing; Activity-Based Management; Total Quality Management (TQM); Customer Profitioning Analysis and Strategic Positioning Analysis; Activity Based Budgeting; Productivity and Business Process Reengineering (BPR).
Part Three – ‘Cost Management Techniques’ deals with Pricing Strategies; Life Cycle Costing; Target Costing; Kaizen Costing; Value Chain Analysis; Just-in-Time (JIT) Inventory Management; Theory of Constraints.
Part Four – ‘Performance Evaluation’ focuses on Responsibility Accounting and Divisional Performance Evaluation; Transfer Pricing; Strategic Performance Measurement-Balanced Scorecard.
Chapter Organisation
All chapters in the book have been carefully and logically organised to enable students to understand concepts and theories underlying strategic cost management. Each chapter has the following components;
- Comprehensive and Updated Coverage — The book presents latest adequate materials on cost management
concepts, techniques and use of information for strategic planning and decision making. - Learning Objectives — These appear at the beginning of each chapter.
- Examples and Illustrative Numerical Problems — Real — world illustrative problems have been included in the chapters for better understanding of cost management principles and techniques.
- Review Questions — Thought–provoking and real life theory questions are given at the end of each chapter to test students’ understanding of materials presented in the chapter. These review questions require critical analysis and can be used as written assignments or as a basis of classroom/group discussion.
- Exercises — Exercises are included as end of chapter materials and support learning objectives given in the beginning of each chapter. They help in restrengthening the students’ understanding of chapter concepts before they take review problems and cases requiring computation.
- Review Problems — Problems with answers with varying degrees of difficulty have been given in the most chapters. Students are required to apply their deeper knowledge of chapter materials to solve these problems since they would help them in better learning and understanding of the subject matter. These numerical problems generally involve more than one issue and contain difficult computations, straightforward requirements calling for decisions, interpretations or ‘what if’ answers.
- Cases — Almost all chapters in the book have managerial cases implying more complexity, analysis and synthesis. They would help students to extend their thought process to new situations and to shift from classroom to the business world to enhance their analytical power and to use multiple concepts to solve them.
- Adapted Problems — Numerous adapted CMA (USA), CIMA (UK), C.A., I.C.W.A., M.B.A., M.Com., problems are included to help students prepare for these examinations.
With the above pedagogical and appealing features, the text presents a balanced blend of conceptual framework, cost management techniques, use of cost accounting information and emerging themes in today’s business world. The organisation and discussion of materials are clear, concise, readable and fine-tuned.
The text has been primarily written for postgraduate students of commerce, management and accountancy in Indian universities, management institutes, business schools and professional institutes. In particular, the book is an ideal text for M.Com., and M.B.A. students. It will be equally useful to the students who are pursuing C.A., I.C.W.A., C.F.A., Company Secretaryship and management and professional courses. The book can be used by practicing managers and professionals as well and by those who want to build career in strategic cost management.
Contents –
PART ONE : OVERVIEW AND BASIC CONCEPTS
1. Cost Management: Nature and Scope
2. Basic Cost Concepts
PART TWO : ACTIVITY-BASED CONTROL AND MANAGEMENT
3 Activity-based Costing
4. Activity-based Management
5. Total Quality Management (TQM)
6. Customer Profitability Analysis and Strategic Positioning Analysis
7. Activity-based Budgeting
8. Productivity and Business Process Re-engineering (BPR)
PART THREE : COST MANAGEMENT TECHNIQUES
9. Pricing Strategies
10. Life Cycle Costing
11. Target Costing
12. Kaizen Costing
13. Value Chain Analysis
14. Just-in-time (JIT) Inventory Management
15. Theory of Constraints (TOC)
PART FOUR : PERFORMANCE EVALUATION
16. Responsibility Accounting and Divisional Performance Evaluation
17. Transfer Pricing
18. Strategic Performance Measurement — Balanced Scorecard