Management Accounting

This module extends the basics of management accounting in its role in shaping long term decisions, in planning and in control and presenting reports to management.

By the end of this module the student should be able to:

1. apply quantitative expertise in the use of appropriate management accounting techniques and account for the strengths and weaknesses of these methods.
2. explain the use of relevant management accounting theories and techniques in supporting business decisions.
3. work effectively as a member of a group, in providing a cohesive group presentation in response to a given assignment.

1 Further issues in Costing

Overhead allocation, apportionment, absorption and preparation of overhead cost statements; compilation of process costing statements and joint costing statements using FIFO and Weighted Average considering opening and closing inventory valuation; throughput costing; techniques in short-term decision making- further issues

2 Marginal Costing and Absorption Costing

Cost-volume profit analysis for multi-product. Reconciliation of Absorption and Marginal costing profits: calculation of marginal and absorption cost of products and services.

3 Capital Investment Appraisal

Investment appraisal methods; Net Present Value, Payback, Internal Rate of Return and Accounting Rate of Return. Strengths and weaknesses of these methods. Sensitivity analysis applied to capital investment appraisal.

4 Working Capital

The nature and importance of working capital. Management of working capital. Determining working capital needs.

5 Variance Analysis

Various roles of budgets and their behavioural implications. Functional and flexed budgets. Calculation and interpretation of variances. Reconciliation of actual to planned performance by means of variances. Distinguish between planning and operational variances. Role of MRP and ERP systems in supporting standard costing systems. Material mix and yield variances, sales mix and quantity variances.