Module Overview

Advanced Management Accounting 2

This module requires a knowledge and comprehension of Advanced Management Accounting 1. The aim of this module is to further develop skills relevant to management accounting and build on those skills already developed in previous modules. It aims to assess those skills in a practical way as well as ensuring students have knowledge of current developments and thinking relevant to this module.

Module Code

MACC H4003

ECTS Credits

5

*Curricular information is subject to change

Decision Making: Relevant Costs and Revenues for Decision-making

Meaning of relevance in decision-making scenarios; cost and revenue analysis under a range of decision-making scenarios: replacement of equipment, outsourcing, make or buy, further processing and discontinuation. Qualitative factors arising in decision-making scenarios; performance analysis in not-for-profit organisations and the public sector; behavioural aspects of performance.

Decision-making: Pricing Decisions

Pricing strategies, including price skimming, penetration pricing and price discrimination; price elasticity of demand; pricing decisions such as price/demand relationships, relevant costs, product life cycles, transfer pricing and profit maximisation; pricing methods: full cost-plus, demand, minimum, tender and variable cost-plus; qualitative factors in pricing.

Decision Making: Risk and Uncertainty

Difference between risk and uncertainty; use of probabilities to calculate expected values and apply sensitivity analysis; decision trees for multi-stage decision problems; differing attitudes to risk and apply maximin, maximax and regret techniques to decision making scenarios.

Planning, Control and Performance Measurement:The Budgeting Process

Different types of budgets, including master budgets and functional budgets, their usefulness and problems; flexing budgets for planning & control purposes and explaining the results using variance analysis; use of high-low technique to identify variable, fixed and semi-variable elements of budgets; estimate the learning effect and apply the learning curve to a budgetary problem; strenghths and weaknesses of the traditional budgetary process; behavioural aspects of budgeting; role of forecasts and plans in resource allocation, performance evaluation and control; time series analysis, including moving totals and averages, treatment of seasonality, trend analysis using regression analysis and the application of these techniques to forecasting; different approaches to budgeting, including zero-based budgeting, activity-based budget, incremental budgeting and rolling budgets; beyond budgeting theory and the criticisms of abandoning budgets.

Planning, Control and Performance Measurement: Management Control

Controllability principle; controllable and uncontrollable elements; harmful side-effects of results controls; use of flexible budgeting, variance analysis and subjective evaluations; feedback and feed-forward techniques and how these may be used to assist an organisation in the achievement of its goals; responsibility accounting and the four types of responsibility centres: cost, revenue, profit and investment; contingency theory approach to management accounting.

Information for Planning, Control and Performance Measurement: Standard Costing and Variance Analysis

Variance analysis: sales and cost, mix and yield, planned and operational, idle time, fixed overhead capacity and volume; interpret variances and identify possible causes of same; reconcile actual performance to budgets using marginal and absorption approaches; strengths and weaknesses of standard costing; relevance of standard costing in today's business environment and its future role; role of variance analysis in performance measurement.

Module Content & Assessment
Assessment Breakdown %
Other Assessment(s)30
Formal Examination70