This module requires a knowledge and comprehension of Management Accounting 1. The module aims to
provide students with a comprehensive understanding of the management accounting systems and
techniques employed by the Management Accountant. This knowledge provides the student with techniques
relevant to problem solving in a work situation.
Marginal costing and absorption costing
Theories behind marginal and absorption costing; compute profits using marginal and absorption costing; accounting treatment of fixed production overheads using marginal and absorption costing; accounting treatment of selling and distribution overheads and administration expenses; reconciliation of marginal and absorption profits and losses for a period; reasons for the use and problems of marginal and absorption costing.
Cost volume profit analysis
Relationship between contribution and volume; CVP approach; breakeven analysis: target profit, C/S ratio, margin of safety and breakeven point; contribution and profit volume graphs; operating leverage; CVP in a sales mix; separation of semi-variable costs using high-low method; assumptions of CVP; use of marginal costing in decision making.
Capital investment appraisal
Time value of money using compounding and discounting; evaluation of long-term investment opportunities through the use of: net present value, internal rate of return, accounting rate of retun and payback; benefits and drawbacks of investment appraisal techniques; apply sensitivity analysis to cash flows.
The budgeting process
Budgetary control process; budgeting terminology; advantages and disadvantages of budgeting; stages in the budgetary process; preparation of functional budgets and the master budget; theory of incremental budgets; zero-based budgets and rolling budgets; the use of IT in relation to budgeting.
Standard costing and variance analysis
Operation of a standard costing system; establishing cost standards in manufacturing and service industries; use of standards to minimise waste and maximise efficiency; type of cost standards; purposes of standard costing; variance analysis for sales and cost variances; reconciliation of budget and actual profits using variance analysis; the use of IT in relation to standard costing and variance analysis.
Management accounting and Advanced Management Accounting are practical subjects with an emphasis on creating management information to assist in decision making and to assess the performance of the business. The teaching strategy is one where the students are required to be actively engaged in the learning process both inside and outside the classroom. Students learn at different paces and teaching styles are adapted to the learning needs of students while all the time ensuring that topics are covered, and exemptions retained. Students are encouraged to ask questions in class, to follow lecturers illustrating practical examples and to then work through similar questions individually or in groups to complete questions. Lecturers illustrate the solution which is then uploaded to Moodle so that students can work independently. All topics are underpinned by theory and current research in the area. Lecturers use PowerPoint slides, textbooks, worksheets, past exam papers, video clips and encourage class discussions. Students are encouraged to refer to other textbooks and journals to supplement their learning. Problem solving is emphasised in these modules and students become not only independent learners, but they learn to collaborate with fellow students. This forms the basis of skills required by the Management Accountant in practice. Management accounting spans many aspects of a business, so topics are linked to other modules including Financial Accounting, Economics and Financial Management were relevant. Students are encouraged to solve problems and make decisions considering different aspects of the business. Management accounting constantly adapts to the changing business environment, and the topics in these modules are updated as deemed appropriate and with reference to the Professional Accounting bodies. Evolving areas: Sustainability measurement and reporting is key to the activities that have a direct impact on society, environment, and economic performance of an organisation.
|Module Content & Assessment