Module BUSS2061: MANAGEMENT ACCOUNTING

Department: ECONOMICS FINANCE AND BUSINESS (BUSINESS) [Queen's Campus, Stockton]

BUSS2061: MANAGEMENT ACCOUNTING

Prerequisites

• ECOS1081, ECON1041.

Corequisites

• None.

Excluded Combination of Modules

• None

Aims

• Give students a grasp of major techniques of modern management accountancy.
• Instil an appreciation of the theoretical underpinnings of these practices.
• Develop a critical awareness of the limitations of management accounting techniques.

Content

• Introduction; corporate goals; objectives of management accounting in the organisational context. Managerial decision models: the ' complete' model; the 'simplified' approach. Value of information.
• Costing: Stock Valuation and Profit Measurement: Cost concepts; Traditional costing approaches; Quantitative costing techniques: cost estimation and prediction.
• Information for Decision-Making: Activity-Based Costing (ABC); Cost behaviour; cost-volume-profit (CVP) analysis. Relevant costs; limiting factor analysis; Pricing decisions. Linear programming: application to managerial decision problems. Appraising Risk: decision-making under conditions of uncertainty. Capital budgeting.
• Information for Planning and Control: Budgetary control and planning. Standard costing and variance analysis. Variance investigation models; behavioural aspects of management accounting. Strategic management accounting.
• Divisional Performance Evaluation: Measuring divisional performance. Transfer pricing in divisionalised companies.
• Management Accounting: Past, Present, Future: Explaining the gulf between theory and practice; agency theory. Currect and future developments in management accounting.

Learning Outcomes

• Appreciate the importance of organisational goals in the choice and design of management accounting information systems.
• Understand the concepts of cost and value of information in both perfect and imperfect forms.
• Understand the attributes of information which lead to its having value, and the implications of this for information systems design.
• Understand the mechanics of, uses of, and arguments relating to marginal, absorption and activity based costing methods.
• Evaluate the relevance of costs in the decision process.
• Understand the role of accounting information in the pricing process.
• Understand the role of budgeting in the planning, control and resource allocation process.
• Appreciate the factors to be considered in the setting of standard costs, and be able to identify when standard costing is an appropriate system to use.
• Understand models for the investigation of reported variances, and form an informed opinion as to the practical usefulness of such systems.
• Appreciate the behavioural effects of management accounting information, and be able to suggest possible methods of ensuring goal congruence and preventing dysfunctional behaviour.
• Understand the issues involved in appraising the performance of divisional managers.
• Understand the alternative methods available for setting transfer prices and cost allocations in a divisional company.
• Comment on the perceived gulf between theory and practice in management accounting, and suggest possible reasons.

• Employ the linear programming approach to scarce resource allocation.
• Prepare budgets, making use of speadsheet software.

Modes of Teaching, Learning and Assessment and how these contribute to the learning outcomes of the module

• Lecture delivery will cover the technical material underpinning the course as preparation for seminars which will enable students to develop appropriate skills and understanding of concepts.
• The formative assessment seeks to ensure basic technical outcomes are achieved early in the module to enable the development of more advanced skills in later sessions.
• The summative assignment seeks to assess the learning outcomes through the application of techniques and theory in the applied context of a case study.
• The examination addresses the students understanding of the key concepts introduced in the module.

Teaching Methods and Learning Hours

Summative Assessment

Formative Assessment:

Multiple Choice Text.

■ Attendance at all activities marked with this symbol will be monitored. Students who fail to attend these activities, or to complete the summative or formative assessment specified above, will be subject to the procedures defined in the University's General Regulation V, and may be required to leave the University