Synopsis of Module
The scope of management accounting is considerable and is developed over successive units. This module provides an introduction to management accounting. The module focuses on the application of fundamental methods and techniques and examines fundamental issues relating to organisational costs in both manufacturing and service sectors. The practical nature of the module is a reflection of the requirements for exemptions from professional exams.
The assessment is a 1.5 hour multiple choice question paper and a 3 hour closed book exam.
Aims of Module
This module aims to test the student's ability to:
| 1. | explain the basic concepts and processes used to determine product and service costs. |
| 2. | explain absorption cost & marginal cost concepts. |
| 3. | apply Cost-Volume-Profit (CVP) analysis and interpret the results. |
| 4. | explain the role of budgets and standard costing within organisations. |
| 5. | prepare simple budgets, standard costs and variance statements. |
Learning Outcomes
At the end of this module, the student will be able to:
| 1. | demonstrate how standard costs are used in practice |
| 2. | demonstrate how budgets are used in practice |
| 3. | prepare product costs for financial reporting and decision making |
| 4. | record economic events relating to labour, material and overheads |
| 5. | calculate cost based selling price. |
Outline Syllabus
| • | Materials: accounting and control procedures |
| • | Labour: accounting and control procedures |
| • | Factory incentive schemes for individuals and groups |
| • | Overhead costs: allocation, apportionment, reapportionment and absorption of overhead costs. |
| • | Materials: reorder quantity, reorder level, maximum stock, minimum stock, economic order quantity |
| • | Principles of standard costing |
| • | Preparation of standard costs under absorption and marginal costing. |
| • | Variances: materials: total, price and usage; labour: total, rate and efficiency. |
| • | Cost accounting statements for services and service industries |
| • | Marginal and absorption costing profit and loss accounts |
| • | Fixed, variable and semi-variable costs |
| • | Break-even charts, profit/volume graphs, break-even point, profit target, margin of safety, contribution/sales ratio |
| • | Limiting factor analysis. |
Summative Assessment
Assessment A - multiple choice exam (1.5 hours), weighting 30%.
Assessment B - closed book exam (3 hours), weighting 70%
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