Module Aims: This module requires a knowledge and comprehension of Management Accounting 1 & 2.
The module aims to provide students with a comprehensive understanding of the role of the Management
Accountant. The students should be able to design management accounting systems to suit the needs of
businesses and to evaluate the performance of businesses using appropriate performance measures.
Review of Management Accounting Cost Terms and Concepts
Review of the role of the Management Accountant and the comparison of the relationship between management and financialaccounting. Classification of costs and revenues into direct and indirect, period and product, opportunity costs, avoidable andunavoidable, incremental, variable, fixed, semi-variable, stepped, decision-making costs and non-manufacturing costs.
Cost and Management Accounting techniques
On completion of their studies students should be able to compare and contrast costing systems, such as: • Job costing andservice costing: Materials recording procedure; Pricing and issue of materials; Control accounts; Integrated cost accountingsystems; Planning and control of stocks; Just in time; Back-flush accounting; Theory of constraints; Materials requirementsplanning; Throughput accounting; Role of MRP and ERP systems; Total quality management; Enterprise resource planning. •Activity-Based costing: The emergence of ABC systems, the concepts behind it and advantages and disadvantages; Comparisonof traditional and ABC systems; Designing ABC systems – cost drivers, cost pools; ABC and service industries; Benefits of ABC;Criticisms of ABC; ABC in practice. • Marginal costing and absorption costing: Theories behind marginal and absorption costing;Computation of profits using marginal and absorption costing; Reconciliation of marginal and absorption profits and losses;Analysis of fixed production overhead into an expenditure variance and a volume variance; Reasons for the use and problems ofmarginal and absorption costing.
Strategic Management Accounting
Introduction to Strategic Management Accounting; Assessing strategic change; Benchmarking; Competitor profitability analysis;Customer profitability analysis; Life cycle costing; Kaizen costing; Business process re-engineering; Target costing; Value chainanalysis; Cost of quality; Shareholder value analysis; Economic value added and residual income. Non-financial measures ofperformance and key performance indicators; Mission statement and how it is linked to strategy; Balanced Scorecard and how itis used to assist in the achievement of the organisations strategy
Transfer pricing in divisionalised companies
Functional and divisional organisational structures; Centralised and decentralised decision making approaches; The advantagesand disadvantages of divisionalisation and divisional performance measures; Theory of transfer pricing, including perfect,imperfect and no market for the intermediate goods; Alternative transfer pricing methods; Resolving transfer pricing conflicts;Domestic and international transfer pricing recommendations; Advice on resolving transfer pricing conflicts and ethical dilemmaswhich occur in the management of divisional performance.
Decision making where there are constraints
Types of contraints; Use of marginal costing in short-term decision making; Use of limiting factor analysis and linear programmingusing graphs and simultaneous equations; Shadow prices; Calculate slack and explain its implications for decision making anddecision trees for multi-stage decision problems.
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