18POE504 COST MANAGEMENT OF ENGINEERING PROJECTS 3/0/0/3

Nature of Course :G (Theory analytical)

Pre requisites :NIL
Course Objectives:
1. To understand the concepts of decision making .
2. To study the various techniques for cost analysis
Course Outcomes:
Upon completion of the course, students shall have ability to
POE504.1 Remember costing variables for decision making. [R]
POE504.2 Understand the project as per the business requirements. [U]
POE504.3 Analyze cost volume profit for business decisions. [AN]
POE504.4 Prepare and analyze Budgets according to business requirement. [AP,AN]

Course Contents:
Introduction and Overview of the Strategic Cost Management Process :Cost concepts in decision-
making; Relevant cost, Differential cost, Incremental cost and Opportunity cost. Objectives of a Costing
System; Inventory valuation; Creation of a Database for operational control; Provision of data for
Decision-Making. Project: meaning, Different types, why to manage, cost overruns centres, various
stages of project. Execution conception to commissioning. Project execution as conglomeration of
technical and non-technical activities. Detailed Engineering activities. Pre project execution main
clearances and documents Project team: Role of each member. Importance Project site: Data required
with significance. Project contracts. Types and contents. Project execution Project cost control. Bar
charts and Network diagram. Project commissioning: mechanical and process Cost Behavior and Profit
Planning Marginal Costing: Distinction between Marginal Costing and Absorption Costing; Break-
even Analysis, Cost-Volume-Profit Analysis. Various decision-making problems. Standard Costing and
Variance Analysis. Pricing strategies: Pareto Analysis. Target costing, Life Cycle Costing. Costing of
service sector. Just-in-time approach, Material Requirement Planning, Enterprise Resource Planning,
Total Quality Management and Theory of constraints. Activity-Based Cost Management, Bench
Marking; Balanced Score Card and Value-Chain Analysis..Budgetary Control; Flexible Budgets;
Performance budgets; Zero-based budgets. Measurement of Divisional profitability pricing decisions
including transfer pricing. Quantitative techniques for cost management, Linear Programming,
PERT/CPM, Transportation problems, Assignment problems, Simulation, Learning Curve Theory.
Total Hours: 45

Text Books:
1. Cost Accounting A Managerial Emphasis, Prentice Hall of India, New Delhi
2. Charles T. Horngren and George Foster, Advanced Management Accounting
3. Robert S Kaplan Anthony A. Alkinson, Management & Cost Accounting.
Reference Books:
1. Ashish K. Bhattacharya, Principles & Practices of Cost Accounting A. H. Wheeler
publisher
2. N.D. Vohra, Quantitative Techniques in Management, Tata McGraw Hill Book Co. Ltd.

Web References:
1. http://nptel.ac.in/courses/105101084/
Online Resources:
1. http://nptel.ac.in/courses/105101084/
Formative assessment based on Capstone Model (Max. Marks:20)
Course Assessment Component Marks
Outcome
POE504.1 Remember Quiz 5
POE504.2 Understand Assignment 5
POE504.3 Analyse Problem solving 5
POE504.4 Analyse, Apply Problem solving 5

Summative assessment based on Continuous and End Semester Examination

Continuous Assessment End Semester
CIA-I CIA-II Term End Examination Examination
[6 marks] [6 marks] [8 marks] [60 marks]
Remember 20 20 20 20
Understand 20 - - -
Apply - 20 20 20
Analyse 60 60 60 60
Apply - - - -