This presentation titled , "Cost and Management Accounting and Comparative Analysis o Activity Based Costing." also Discuss about Traditional costing systems along with Activity Based Costing

2. GROUP MEMBERS
Introduction ID
22-015
22-059
22-122
22-220
22-254
Anamika Hore
Sagufta Bushra Mishma
Tahera
Irin Afrn
Nadia Chowdhury Riya
Md Abdul Russel 22-253

4. Management Accounting is the process of analysis, interpretation
and presentation of accounting information collected with the
guidance of financial accounting and cost accounting in order to
assist management in the process of decision making, creation of
policy and day to day operation of an organization.
Management Accounting is the blend of accounting, finance and
management with the business skills and techniques, need to add real
value in any organization.

5. 1 PLANNING
2 COORDINATING
3 CONTROLLING
4 COMMUNICATION

6. 5 TAX POLICIES
6 DECISSION MAKING
7 FINANCIALANALYSIS and INFORMATION
8 QUALITATIVE
INFORMATION

7. Management Accounting Mechanism as Practiced in
Manufacturing Industry of Bangladesh
In a journal of business studies titled, “A Study on Cost and Management
Accounting Mechanism as Practiced in Manufacturing Industry of Bangladesh”
findings show that the manufacturing companies operating in Bangladesh are not
well informed about some new mechanism of cost and management accounting.
This research provides less insight into precise nature and details of these
mechanisms, and the organizational processes and actions that precede or are
initiated by these mechanisms. There is further scope to improve to some extent.
Using alternative approaches (e.g., case study research, and interview method),
one may attempt to investigate why and how companies implement various
contemporary management accounting techniques, pitfalls in implementing and
their success in achieving intended goals. The outcomes of this study would be
more or less rationale for a developing country like Bangladesh.

8. Cost and Management
Aaccounting mechanisms

9. Survival Triplet
• Product Cost
• Quality
• Performance
So the goal of CMAS is to provide relevant and timely information to
management to take effective decision to utilize resources.

10. Mostly used mechanisms and systems in
Bangladesh ( Farjana Yeshmin, 2015)
Most practiced
mechanism
N Mean Hardly
Practiced
mechanism
N Mean
Budgetary
control
66 1.2 Kaizen Costing 66 4.8
Cash Flow
Statement
Analysis
66 1.3 Six Sigma 66 4.346
TQM 66 1.7 Operation
Liverage
66 4.342
Capital
Budgeting
66 1.8 Value
Engineering
66 4.28
Financial
Statement
Analysis
66 1.9 Absorption
Costing
66 4.27

11. Mostly Used Mechanism
• Cash flow statement analysis
• ABC
• Capital Budgeting

12. Mechanisms used in manufacturing company
• Responsibility accounting
• Segment reporting
• Absorption Costing
• Target Costing
• Standard Costing

13. Why the CMAS is needed in a organisations?
• It enables the organisation to improve capacity and innovative of the
organisation .
• It ensures flexiblity.

14. Management Accounting
Dynamic In Bangladesh: Areas &
Factors Behind the Changes.
Author: Mohammad Rokibul Kabir ( 2019)

15. Changes In Managerial Perspective
• Management has gone under significant changes over the last few
decades which ultimately lead to dynamic changes in management
accounting practices in Bangladesh.
1. Rapid growth in technologies.
2. High rate of Competition.
3. Innovation and application of information technology.
4. Diversity in workforce
5. More efficient production.

16. Stages in changes of management accounting
practices

17. Factors For Driving Forces in Management
Accounting Practices In Bangladesh.
• Changes of managerial perspective.
• Changes in ownership ( Privatization programme of 1976)
• Decrease in political influence
• Industrialisation growth.
These led to
1. The formation of ICMAB in 1977.
2. Stautory obligation to report objective overview of management practice and
policy recommendations in annual report as per company act 1994.

18. Factors Influencing changes in
ManagementAccounting.
1. On time delivery.
2. Dependable delivery promise.
3. Competition for new products development
4. Competition in market segments, marketing and distribution channel.
5. Faster communication through internet.
6. Effective sale service.
7. Providing high quality products and service.
8. After sale support.
9. Customized manufacturing of products.

19. Management accounting is concerned primarily with
the internal needs of management.
• Management accounting provides information from its environment
to management to facilitate decision-making.
• Good management accounting information has three attributes:
1. Technical-it enhances
2. Understanding of the phenomena measured
3. Provides relevant information for strategic decisions

20. The major developments in management accounting since
1950s can be explained as follows:
• 1. Cost and management accounting innovations in 1950s can be identified as: Discount cash
flows, Total quality management, Cusum charts and Optimum transfer pricing.
• 2. Cost and management accounting innovations in 1960s can be identified as: Computer
technology, Opportunity cost budgeting, Zero-base budgeting, Decision tree, Critical path
scheduling, and Management by objectives.
• 3 .Cost and management accounting innovations in 1970s can be identified as: Information
economics and agency theory, Just-in-time scheduling, Strategic business units, Experience
curves, portfolio management, Materials resource planning, Diversification, Matrix
organization and Product repositioning.
• 4. Cost and management accounting innovations in 1980s can be identified as: Activity based
costing, Target costing, Value-added management, Theory of constraints, Vertical integration,
Private labels and Benchmarking.
• 5. Cost and management accounting innovations in 1990s can be identified as: Business
process reengineering, Quality functional deployment, Outsourcing, Gainsharing, Core
competencies, Time-based competition and Learning organization.

21. Cost Accounting in Bangladesh:
Use, Value,Obstacles, and
Education Needs
Ebadul Islam ( 2015), Theses & Dissertations. 43

22. Cost Accounting
• Cost accounting is the combination of many activities from preparing
of statistical data to make manegarial decision to maximize the
profitability and performance. The activities are as follows:
1. Cost data and analysis
2. Controlling Cost
3. Profit planning
4. Capital investment decision
5. Allocation of resources.

23. Statutory Regulations
• According to company act 1994, it is mandatory to keep record of
overhead cost such as; material, labor and others for the companies
who are engaged in;
1. Production
2. Distributing
3. Marketing
4. Extraction
5. Transporting
• Cost audit and maintenance of recording have been made mandatory.
• Cost audit must be done by an auditor who is an auditor as per Cost
and Management Accountants Ordinance 1977.

24. Cost Study
• ICMAB is a statutory organization constituted by the Government
under The Cost and Management Accountants Ordinance 1977
(Ordinance No Llll of 1977) and regulated under the Cost and
Management Accountants Regulations 1980 (as amended up to
date).It is the only Institute dedicated to cost and management
accounting education in Bangladesh.

25. Some Findings Of the paper
• In Bangladesh 68% Companies were found not having separate cost
accounting department ( reasearch conducted on 100 companies
located in Dhaka,Khulna &Chittagong )
• No private limited company had separate cost accounting
department.
• Most( almost 84%) of the participants organisations planned to have
cost audit.

26. Obstacles
• Obstacles to implement cost accounting practices in Bangladesh.
1. Lackings of qualified manpower
2. Absense of statutory requirement
3. Lacking of appreciation of its importance

27. Cost Accounting Practices in
Bangladesh; A Study Of
Pharmaceutical Sector.
Ibrahim, Nahida, Nudrat (2019), International journal of trend in scientific research
and development.

28. Cost accounting practices.
Cost and management accounting practices have become mandatory
and essential for pharmaceutical companies. The reasons are following;
1. Cost technique is vital issue.
2. Global market is very competitive.
3. Pricing the products effectively.
4. Price of Raw material is increasing
5. High inflation rate.
Reference: Ibrahim, Nahida & Nudrat (2019),

29. What costing systemare they using?
• In their annual report all the sample companies show following
categories ;
1. Product Cost ( almost 60% of total cost) & Period Cost.
2. Fixed ( higher percentage in total cost) & Variable cost.
3. Discretionary cost & non discretionary cost .
• In order to pricing the product value, they use process costing system
instead of job order costing system.
• Companies often use both of costing system while they manufature
mass amount as well as customised product for specific batch.

30. Manufacturing Overhead Allocation method.
• All the sample companies use traditional method to allocate
overhead for pricing of product instead of using activity based
costing.For the following reason ;
1. Traditional costing method or existing indirect cost pool system is easier to
understand and use in pricing decision.
2. Difficulties in determining cause and effect relationship between cost and cost
allocation base.
3. Costly as activities are needed to be identified and associated costs are to be traced on
the product.

31. Why ABC costing method is important?
There are many reasons to use ABC method instead of traditional one.
For this reason, many comoanies are planning to adopt this method to
allocate their overhead.
1. In traditional method all indirect cost are allocated using only one cost pool.
2. Cost reduction and process improvement.
3. Correct pricing and product mix decision
4. Planning and managing activities effectively and efficiently .
5. Traditional method may show erroneous and misleading coting allocation.

32. Comparative Analysis of effects of ABC
method.( Using case study )
• the managers at SailRite Company decide that the benefits of
implementing an activity-based costing system would exceed the cost,
and thus the company should use activity-based costing to allocate
overhead.How would this method work for SailRite?

33. Comparative Analysis of effects of ABC
method.( Using case study )

34. Comparative Analysis of effects of ABC
method.( Using case study )

35. Comparative Analysis of effects of ABC
method.( Using case study )

36. Comparative Analysis of effects of ABC
method.( Using case study )