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This module aims to provide an advanced overview of current developments in thought and practice of management accounting, strategy, and organisational control. Emphases are given to the economic and behavioural analysis of management accounting issues and to strategic and organisational aspects of control systems design.
Accounting information is a fundamental resource for enabling managers to make decisions. This course emphasises a critical understanding of the accounting numbers, the underlying assumptions behind those numbers, and the choice of accounting tools and techniques that will best suit managers’ information needs. The aim of the course is to equip line managers primarily in business (but also public-sector agencies) with the abilities to prepare budgets, develop business cases for capital investment, calculate prices and exercise cost control.
The course uses a range of simulations, case studies and real-life problems in addressing variations in practice between industry sectors and geographical regions.
You will receive a looseleaf binder containing eight units. The units are carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the further assigned readings. The unit files are also available to download from the Virtual Learning Environment.
- Collier P (2012) Accounting for Managers: Interpreting Accounting Information for Decision-Making, 4th Edition, Wiley.
- Atkinson AA, RS Kaplan, EM Matsumara and SM Young (2012) Management Accounting, 6th Edition, Pearson Education.
You will receive two Reader volumes, which are a compilation of recently published articles or seminal writings which augment and illustrate the main text.
Virtual Learning Environment
You will have access to the VLE, which is a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.
Objectives and learning outcomes of the course
When you have completed your study of this module and its core readings, you will be able to:
- discuss the importance of an effective management control system, including a well-designed accounting information system
- plan production volumes and product-line combinations
- make decisions that take account of quality management and environmental costs
- apportion overhead costs to products and services using a range of methods
- apply appropriate capital investment appraisal methods
- explain the ways in which divisional performance might be measured
- design an effective budget-setting process to help control a business.
Scope and syllabus
Unit 1: The Context of Management Accounting
- 1.1 Introduction to Management Accounting
- 1.2 Shareholder Value and Management Control Systems
- 1.3 Non-financial Accounting Information
- 1.4 Summary and Practice Tasks
- 1.5 Case Study
Unit 2: Pricing and Production-Volume Decisions
- 2.1 Pricing Strategy
- 2.2 Relevant Costs for Pricing Decisions
- 2.3 Finding the Break-Even Point – Cost-Volume-Profit Analysis
- 2.4 Achieving a Target Profit Using Break-Even Analysis
- 2.5 Using ‘Contribution’ to Make Decisions
- 2.6 Segmental Profitability Analysis for Closing-Continuation Decisions
- 2.7 Summary and Practice Tasks
- 2.8 Case Study
Unit 3: Production Decisions, the Value Chain and Production Capacity
- 3.1 The Value Chain
- 3.2 Production Capacity
- 3.3 Theory of Constraints, Relevant Cost, Opportunity Cost
- 3.4 The Outsourcing Decision
- 3.5 Costing Orders
- 3.6 The Product-Mix Decision
- 3.7 Environmental Costs
- 3.8 Summary and Practice Tasks
- 3.9 Case Study
Unit 4: Volume-Based Cost Systems
- 4.1 The Problem of Allocating Production Costs
- 4.2 Variable Costing and Absorption Costing
- 4.3 Throughput Costing and Process Costing
- 4.4 Job Costing
- 4.5 Summary and Practice Tasks
- 4.6 Case Study
Unit 5: Activity-Based Cost Systems I
- 5.1 Classifying Costs Using Value-Chain Activities
- 5.2 Types of Activities: Facility-Level, Customer-Level, Product-Level, Batch-Level, Unit-Level
- 5.3 Steps in Designing an Activity-Based Cost System
- 5.4 Summary
Unit 6: Activity-Based Cost Systems II
- 6.1 Using the Activity Model to Forecast Resource Capacity
- 6.2 Organisation-Level Factors Affecting Activity-Based Costing Systems
- 6.3 Summary and Practice Tasks
- 6.4 Case Studies
Unit 7: Capital Investment Decisions
- 7.1 Introduction To Capital Investment Decisions
- 7.2 Accounting Rate of Return
- 7.3 Payback
- 7.4 Discounted Cash Flow Techniques
- 7.5 Taxes and Price Inflation
- 7.6 Practice Tasks
- 7.7 Problems
Unit 8: Performance Measurement Systems and Strategic Budgeting
- 8.1 Business Units, Responsibility Centres, Cost Centres, Profit Centres, Investment Centres
- 8.2 Divisional Performance and the Controllability Construct
- 8.3 Transfer Pricing
- 8.4 Profit and Cash Budgets
- 8.5 Summary and Problem Questions
Method of assessment
Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.
You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 5, and the second assignment at the end of the module, on the Tuesday after Week 8. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.
You will also sit a three-hour examination on a specified date in October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in April each year.