Accounting for management (BA1020)
- Basic idea of cost behaviour and estimation and emphasise the difference between fixed and variable costs as one approach and direct and indirect as another approach.
- The relationships between costs, volumes and profits.
- Break-even chart or the more practical profit/volume graph.
- Looks at the effect splitting costs and profits can have on stock valuations and hence reported profits.
- Activity based costing
- Placing budgets into the strategic and information control systems of the organisation.
- The importance of marginal costing in decision making.
- Anticipated costs
- Variance analysis.
- How long-term investment decisions are made (investment appraisal, capital budgeting, capital investment or long-term planning.)
- The cost of capital, the discount rate, is the return which the investors require.
- Performance measurement (quantitative and non-quantitative measures)
- Return on Investment (ROI) and Residual Income (RI).
- The Balanced Scorecard
- Dividing up that profit between the various divisions
- The idea of economic value added – or EVA.
By the end of this module students should be able to:
- Understand and apply management accounting techniques;
- Be aware of the current developments in management accounting as they affect both manufacturing and service based industries;
- Apply investment appraisal techniques in complex situations and be aware of the advantages and disadvantages of the different approaches;
- Understand the role of accounting in developing strategies for the organisation;
- Understand the role accounting data plays in the pricing decision;
- Calculate the cost of capital for an organisation.
This module is assessed by a three hour unseen written examination.
- Management and Cost Accounting. C.Drury (2012)
- Management and Cost Accounting. A Bhimani, C.T. Horngren, S.M. Datar, M. Rajan (2011)