Module Information

Module Identifier
AC10510
Module Title
Introduction to Management Accounting
Academic Year
2014/2015
Co-ordinator
Mr Ian Kenneth Birchmore
Semester
Semester 1
Other Staff
 

Course Delivery

Delivery Type Delivery length / details
Lecture 3 hours (including 1 hour of help class) per week
Seminars / Tutorials 5 x 1 hour sessions
Lecture Help Class 10 hours
 

Assessment

Assessment Type Assessment length / details Proportion
Semester Exam 2 Hours   Unseen written examination  80%
Semester Assessment In Class Test  20%
Supplementary Exam 2 Hours   Unseen written examination  Repeat failed elements  80%
Supplementary Assessment Test  Repeat failed element  20%

Learning Outcomes

On successful completion of this module students should be able to:

Describe, explain and illustrate the context, importance, purposes, techniques and processes of management accounting, budgeting and working capital management.

List, describe, explain, illustrate, compare and contrast alternative approaches to accounting, costing, profit determination and budgeting.

Cite, explain, select and apply appropriate theory and models to solve related questions and numerical problems.

Aims

This module is a core module to the School's Accounting and Finance degree schemes (single, major, joint and minor) and N310 (Business Finance). It is also available to other students within the University who are looking for a management accounting 10 credit module.

This module provides a thorough grounding in the context, purposes and practices of management accounting as expected by:

  • Honours Degree Subject Benchmark Statement: Accounting (2007), Quality Assurance Agency for Higher Education.
  • Honours Degree Subject Benchmark Statement: Finance (2007), Quality Assurance Agency for Higher Education.
Further, the module contributes to the maintenance of (or is anticipated to contribute to the achievement of [further]) accreditation from professional accountancy bodies, including:

  • Institute of Chartered Accountants in England and Wales.
  • Association of Chartered Certified Accountants.
  • Chartered Institute of Management Accountants.
  • Institute of Chartered Accountants of Scotland.

Brief description

The module introduces the fundamental concepts and techniques of management accounting. This serves as a prerequisite for the pathway of management accounting in the following two years, namely AC33120 (Management Accounting 2) in part 2.

The aim of this module is to provide students with the basic knowledge of cost and management accounting practices and concepts and their applications within organisations. This involves the provision and interpretation of information to assist managers in planning, controlling, taking decisions and appraising performance.

The module is anticipated to contribute to the achievement of accreditation from professional accountancy bodies, including:

  • Institute of Chartered Accountants in England and Wales.
  • Association of Chartered Certified Accountants.
  • Chartered Institute of Management Accountants.
  • Institute of Chartered Accountants of Scotland.

Content

1. Introduction:
  • Difference between financial and management accounting
  • Function of management accounting
2. Cost Concepts and Cost Estimations:
  • Cost objects
  • Classifying costs
  • Direct, indirect, period and product costs
  • Cost behaviour
  • Relevant, irrelevant, avoidable and unavoidable costs
  • Sunk costs
  • Opportunity costs
3. Overhead Absorption Rates:
  • Cost assignment , tracing and allocation
  • Traditional costing systems
  • Activity based costing (ABC)
  • Absorption Costs vs Marginal Costs
4. Cost Volume Profit (CVP) Analysis:
  • Economists vs Accountant's view of CVP
  • Computations involving CVP and Break Even Point
  • CVP Charts
  • Multiple products analysis
  • Limitations
5. Decision Making Techniques:
  • Special selling price decisions
  • Outsourcing (make or buy) decisions
  • Product-mix decisions
  • Discontinuation decisions
  • Normal pricing decisions
6. Budgets and Variance Analysis:
  • Importance of budgets
  • Budgetary process
  • Functional and master budgets
  • Interrelationship of budgets
  • Calculation of budgets
  • Standard costing
  • Calculation of variances
  • Interpretation of variance results
7. Working Capital Management:
  • Nature of working capital
  • Calculation of the working capital cycle
  • Management of working capital
  • Measuring working capital
8. Review

Module Skills

Skills Type Skills details
Application of Number * Develop an easy familiarity with numerical data sources and numerical data * Apply numerical data to problem solving and decision making with care and accuracy * Assess the reasonableness of and interpret numerical solutions * Support assertions/arguments with appropriately developed and presented numerical data
Communication * Develop confidence in and clarity of oral communication via example class/tutorial participation * Develop clarity and focus of written communication via development of answers to tutorial questions * Develop and use appropriate subject-specific vocabulary in oral and written communication
Improving own Learning and Performance * Identify and distil the key issues covered by lectures and tutorials * Identify and use a range of learning resources * Invetsigate benefits of small group working on tutorial prepartion. * Structure study to accomodate intensive learning
Information Technology * Use spreadsheet software (Excel) to complete elements of the tutorial questions (e.g., for ease of tabulated numerical calculations, production of summary statistics, production of graphs, etc.) * Use a variety of electronic web- and library-based resources to review available information and retrieve pertinent information
Personal Development and Career planning * Identify a variety of potential career opportunities within the financial and professional services sector * Develop skills in financial analysis and decision making which are essential to the aspiring management accountant * Identify a variety of potential career routes within the management accountant sector
Problem solving * Identify the precise problem to be solved / decision to be made * Assess which costs are relevant, irrelevant, avoidable and unavoidable to the problem / decision * Select and apply appropriate methods for solving the problem / decision * Assess the reasonableness of problem solutions and interpret those solutions
Research skills * Develop basic information accessing and researching skills * Properly reference/attribute information sources * Select the most pertinent information for retrieval * Retrieve information
Subject Specific Skills * Develop competence in understanding and appropriately applying management accounting techniques * Identify and use sources of management accounting information * Understand, analyse, interpret and synthesize between financial accounting, management accounting and market-based financial information * Make well-based recommendations and decisions * Bring analysis and decision making skills to the service of the business – in strategising, marketing, operating, etc.
Team work * Develop experience of team work and develop team working skills via small group working on tutorial preparation

Reading List

Recommended Text
Drury, C. (2009) Management Accounting for Business For all other Degree Scheme Students 4th Edition Cengage Learning Primo search Drury, C. (2012) Management and Cost Accounting For Accounting and Finance Degree Scheme Students (joint, major or minor) 8th Edition Thomson Learning Primo search

Notes

This module is at CQFW Level 4