< AC.F213a : Management Accounting for Business Decisions

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AC.F213a : Management Accounting for Business Decisions

Year:11/12
Department:Accounting and Finance
Level:Part II (any yr)
Learning Hours:150
Credit Points:15
Weight:0.5
Course Convenor:Dr JA Pfister
Status:Live

Assessment Rules

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  • 75% Exam
  • 25% Coursework

Curriculum Design: Outline Syllabus

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Week 1: Introduction to Management Accounting

Examines the differences between management and financial accounting and introduces the basic concepts associated with management accounting. This should enable students to compare financial and management accounting and understand their different purposes in business.

Required Reading: Drury Chapters 1 and 2

Supplementary Reading: A&M Chapters 1 and 2

EQL: 1. Introduction to Costing: Sections: 1 - 5

Week 2: Information for Decision Making I: Cost Volume Profit Analysis and Relevant Costs

Examines cost-volume profit analysis and will discuss the preparation of break-even charts. The differences between the accountants' and economists' point of view of costs and the limitations of break even analysis are considered. Also considered is the importance of relevant costs for decision-making purposes.

Required Reading: Drury Chapters 3 and 4

Supplementary Reading: A&M Chapter 2 and 3

*Bromage, N. (2000) "Outsourcing. To Do or Not to Do, that is the Question", Management Accounting: Magazine for Chartered Management Accountants, Vol. 78, Issue 1,

January, pp. 22 ? 23.

*Wood, D., Barrar, P. and Jones, J. (1998) "Do it Yourself and Lose Out", Accountancy, June, pp. 58 ? 59.

EQL: 1. Introduction to Costing: Sections: 6 - 10 6. Contribution Analysis: All Sections

Week 3: Information for Decision Making II: Cost Allocation and Long-Term Full-Costing

Investigates long-term full (or absorption) costing and the problems associated with allocating overheads appropriately to products. The concepts of direct and indirect costs will be discussed further and the effect on management decisions of allocating overheads will be considered. The distinction between long-term full costing and marginal costing is also established.

Required Reading: Drury Chapter 5

Supplementary Reading A&M Chapter 4

*Drury, C. (2003) Costing: An Introduction, International

Thomson Business Press, 5th Edition, Chapter 8.

EQL: 1. Introduction to Costing: Sections 11 - 14

2. Accounting for Overheads: Sections 1 - 9

Week 4: Information for Decision Making III: Activity Based Costing and Aspects of pricing

Examines Activity Based Costing which is thought to be more appropriate than traditional full costing methods to the modern manufacturing environment. The advantages and disadvantages of this method will be considered. Also discussed in this topic will be strategies for pricing derived from traditional economic theory and a brief discussion of recent developments in costing and pricing, such as total lifecycle costing.

Required Reading: Drury Chapter 6

*Partridge, M. and Perren, L. (1997) "Vice Versa"

Accountancy, November, p.54

*Proctor, R. (2002) Managerial Accounting for Business

Decisions, Pearson Education, pp. 77 ? 79

Supplementary Reading: A&M Chapter 5

Bourne, H. (1999) "Pricing: the Strategic Implications",

Management Accounting: Magazine for Chartered

Management Accountants, Vol. 77, Issue 3, March, p. 26.

EQL: 2. Accounting for Overheads: Sections 10 ? 12

8. Pricing and Transfer Pricing: Sections 1 ? 7, 9, 14, 15

Week 5: Information for Planning and Control I: Budgeting

Examines the role of budgets in the organisation and why they are important for gaining control of activities. The methods of preparing budgets (cash, debtors, creditors, production etc.) and the potential (de)motivational aspects of budgets will also be covered.

Required Reading: Drury Chapter 10 and Chapter 11 esp. pp 308 ? 309 and 318 ? 325.

Supplementary Reading: A&M Chapter 6

Hilton, R.W. (2002) Managerial Accounting: Creating Value in a Dynamic Business Environment, 5th Ed, McGraw Hill, pp. 397-399.

EQL: 3. Budgeting ? 1: Sections: 1 ? 3, 6 ? 11.

4. Budgeting ? 2: Sections: 1 ? 9.

Week 6: Information for Planning and Control II: Standard costing and variance analysis and the need for Responsibility Accounting

Examines the need for control in the organisation through conducting variance analysis. The importance of flexed budgets will also be considered. Discussion will also focus upon the benefits of responsibility accounting in achieving control of activities in the organisation.

Required Reading: Drury Chapters 11 & 12

*Yeldon, E. (2001) "That's the Way to do it," Accountancy, March, pp. 12-13

*Yeung, R. and Langdon, D. (2000) "Culture Club," Accountancy, May, p.55

Supplementary Reading A&M Chapter 7

Proctor, R. (2002) Managerial Accounting for Business Decisions, Pearson Education, pp. 247-249.

EQL: 1. Introduction to Costing: Sections: 15 and 16.

5. Variance Analysis: All sections.
 

Week 7: Information for Planning and Control III: Management of Working Capital

Examines the working capital cycle and the requirements for working capital for different types of businesses. Discussion will focus on methods for achieving control over elements of working capital (e.g. stock, cash, debtors, creditors).

Required Reading: *Accountancy (1998) "Keypoints: Practical Tips for Controlling Debtors", Accountancy, September, p. 167.

*Atrill, P. and McLaney, E. (1999) Financial Accounting for Non-Specialists, 2nd Edition, Prentice Hall, Example: Alexis plc, p. 186-189, 204-211, 227-228.

*Drury, C. (2004) Management and Cost Accounting, International Thomson Business Press, 6th Edition, Chapter 25.

Further Reading: A&M Chapter 9

McWatters, L., Morse, D. and Zimmerman, J. (2001) Management Accounting. Analysis and Interpretation, 2nd

Ed, McGraw Hill, p 434-437.

EQL: 3. Budgeting ? 1: Sections: 10 - 11.

Week 8: Information for Planning and Control IV: Performance Measurement, Motivation and Behavioural Aspects of Accounting Systems

Considers the measurement of performance in an organisation and the increasing use of nonfinancial measures for performance assessment. The limitations of performance measurement and the consequences of performance measurement will be considered.

Required Reading: Drury Chapter 11

*Peters, R. and Gillon, P. (1999) "Why Did the Chicken Cross the Road?" Accountancy, February, p.104-105

Supplementary Reading: A&M Chapter 6 pp 149 ? 151, Chapter 7 pp 201 ? 204

*Fisher, L. (2003) "Index Fingers Bad Behaviour", Accountancy, May, p. 58 ? 60.

*Geiring, M. (1999) "Activity Based Costing and Performance Improvement", Management Accounting, March, pp. 24 ? 25.

Handy, C. (1999) Understanding Organisations, Penguin Books, 4th Edition, Chapter 2: On the Motivation to Work.

Hilton, R.W. (2002) Managerial Accounting: Creating Value in a Dynamic Business Environment, 5th Ed, McGraw Hill, pp. 248-253.

*Watts, J. (1996) Accounting in the Business Environment, 2nd Ed, Pitman Publishing, Chapter 19: Accounting Organisations and Behaviour.

EQL: 3. Budgeting ? 1: Section: 4

 

Week 9: Recent developments in Management Accounting

Considers the role and purpose of management accounting in the organisation and will discuss the criticisms of traditional management accounting. It will also examine the recent developments in managerial accounting and manufacturing practice, and the reasons for their development.

Required Reading: Drury Chapter 15

*Blyth, A. (2005) "Finding the Measure", Accountancy, February, pp. 28 ? 29.

*Fanning, J. (2000) "Evolution or Revolution", Accountancy, October, p 60-61

*FT Understanding Performance Management" 6th October 2004 www.ft.com/performancemanagement

*Gurton, A. (1999) "Bye Bye Budget...", Accountancy, March, p.60.

*Partridge, M. and Perren, L. (1997) "Winning Ways with a Balanced Scorecard", Accountancy, August, p.50-51.

Supplementary Reading: A&M Chapter 5 pp 133 ? 136, Chapter 11

*Fisher, L. (2002) "One Step Beyond", Accountancy, March, pp. 32 - 34.

*Hope, J. and Fraser, R. (1999) "Take it Away", Accountancy, May, pp. 66 - 67

Hilton, R.W. (2002) "Justification of Investments in Advanced Manufacturing Systems", Managerial Accounting. Creating Value in a Dynamic Business Environment, 5th Edition,

McGraw Hill, pp 721 ? 723.

*Hope, T. (2000) "Conflict Resolution", Accountancy, November, p.64-65.

*Parry, K. (2006) "Where Does All the Money Go?" Accountancy, May, pp. 50 ? 51.

EQL: 4. Budgeting ? 2: Section: 8

Week 10: Strategic Management Accounting

Examines the role of Strategic Management Accounting in business and considers how a focus externally as well as internally is important for corporate success.

Required Reading: Drury Chapter 16

*Grundy, T. (2005) "Finding the Ingredients for Survival", Accountancy, April, pp. 66-68.

*Newing, R. (1994) "Benefits of a Balanced Scorecard", Accountancy, November pp. 52 ? 53

Supplementary Reading *Thorne, K. and Smith, M. (2000) "Competitive Advantage in World Class Organisations", Management Accounting:

Magazine for Chartered Management Accountants, Vol. 78, Issue 3, March, p. 22 ? 26.

Curriculum Design: Pre-requisites/Co-requisites/Exclusions

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N/A

Educational Aims: Subject Specific: Knowledge, Understanding and Skills

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The half unit course acts as an introduction to management accounting, and is designed to explore the basic principles and underlying concepts of the subject. The aim of the course is for students to develop an appreciation of the main approaches to measuring, analysing and reporting information to support management decisions.

The objectives for the course are as follows:

Examine the major aspects of management accounting in the organisation;

Provide insights into the changing nature of manufacturing practice and the recent development of other management accounting methods (for example Strategic Management Accounting) and the impact on the role of the management accountant;

Facilitate the development of skills for, and knowledge of, management accounting in the organisation.

The pre-requisite for this course is one of AcF 100, AcF 111 or AcF 261. The course is not available to any students who have previously studied AcF 262.

Educational Aims: General: Knowledge, Understanding and Skills

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N/A

Learning Outcomes: Subject Specific: Knowledge, Understanding and Skills

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At the end of the course students should be able to:

Describe the role of management accounting in an organisation and explain the changes to this role which have occurred in the past twenty years.

Identify different elements of cost behaviour and explain their implications for decision making.

Perform management accounting techniques such as Budgeting, Activity Based Costing.

Understand the potential motivational and organisational affects of management accounting and accounting systems.

Write a coherent report.

Demonstrate good organisational, and written and oral presentation skills.

Learning Outcomes: General: Knowledge, Understanding and Skills

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On successful completion of this module students will be able to...

Curriculum Design: Single, Combined or Consortial Schemes to which the Module Contributes

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N/A
Lancaster University
Bailrigg
LancasterLA1 4YW United Kingdom
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