This module introduces students to management accounting. It is aimed at students pursuing careers in accounting or finance. It is designed to provide the student with a firm understanding of the principles and fundamental techniques of cost and management accounting. The wider aspects of the subject will be explored in the subsequent stage of study. This module aims to develop an understanding and appreciation for the purposes for which costs are used and how those costs are used differently for different purposes. The scope of the module ranges from an understanding of the concepts, to the practical considerations of cost accumulation, classification, decision making, planning and control.
Overhead costs
Nature, classification and analysis of overhead costs.
Allocation, apportionment and absorption of overheads including reciprocal service situations.
Establishment of overhead rates and treatment of under/over recovery; advantages of departmental rates.
Understanding activity based costing and the concept of cost drivers.
Ledger entries relating to overhead costs.
Accounting for overheads using activity based costing.
Cost Accounting Systems/ Design of a Cost System
Job, batch and contract costing:
Valuation of work completed and in progress.
Cost accounting appropriate to production based organisations and service industries.
Integrated and non-integrated accounting systems including their reconciliation.
Ledger entries for different costing methods.
Information for Decisions
Marginal costing compared with absorption costing; reconciliation of profits given by each method.
Cost volume profit analysis and break-even as a short range decision making tool; contribution theory and margin of safety
Contribution break-even charts and profit/volume graphs (single and multiple product)
The concept of opportunity and relevant costs and their use in special pricing decisions.
Planning and Control
Types of budgets and the budgeting process.
Purposes and benefits of budgeting.
Preparation of functional budgets for operating and non-operating functions.
Identification of the key budget factor and budget period.
Cash budgets; the master budget.
Long and short term planning.
The module will be delivered through a combination of lectures and tutorials. Technical and problem solving abilities will be developed by problem solving exercises, practice questions, selfdirected learning and computer based learning (Brightspace). Class time will also be allocated to the resolution of issues arising.
| Module Content & Assessment | |
|---|---|
| Assessment Breakdown | % |
| Formal Examination | 70 |
| Other Assessment(s) | 30 |