The purpose of this module is to enable the student to describe and apply the fundamental concepts and techniques applicable in the management and control of costs of organisations.
- Learning Outcomes
- 1. Understand the principles of costs and control:
- Identify what is required from information presented
- Use management accounting techniques and critically evaluate the use of the techniques
2. Discuss the development and role of management accounting information:
- Describe what managers do and why they need accounting information.
- Identify the major differences and similarities between financial and managerial accounting.
- Describe the total quality management (TQM) approach to continuous improvement.
- Explain the basic ideas under-lying process reengineering.
- Discuss the impact of international competition on businesses and on managerial accounting.
- Explain the importance of ethical standards
3. Discuss the traditional cost concepts and interpret the elements of cost behaviour:
- Determine how costs are classified based on function.
- Contrast the difference between direct and indirect costs.
- Discuss the flow of costs and how overhead costs arise.
- Identify and evaluate factors that influence the behaviour of costs.
- Evaluate contribution margin analysis and prepare an income statement using the contribution format.
4. Identify and discuss the link between the business environment and traditional cost
- Describe the use of overhead rates to apply overheads to products/services
- Explain and calculate product costs using a job order cost system and a process cost
- Describe the development and use of estimated/standard cost systems and explain and
calculate product costs using this cost system.
- Discuss and evaluate the product/service costs computed using these different cost
systems and analyse the variances that arise between these actual and estimated
- Critique the nature and purpose of alternative costing techniques for products and services.
- Demonstrate the relevant numerical and analytical skills for such costings.
- Conclude how variable costing differs from absorption costing in the reporting of income and
the costing of inventory and evaluate the two methods of costing for decision making
5. Identify and discuss the link between the business environment and activity based cost
- Explain the major differences between activity-based costing and a traditional costing
- Distinguish between unit-level, batch-level, product-level, customer-level, and organisation
- Identify the difference between production and service departments.
- Assign costs to cost pools using a first-stage allocation.
- Compare activity rates for cost pools and explain how they can be used to target process
- Assign costs to a cost object using a second-stage allocation.
- Prepare a report showing activity-based costing product margins from an activity view.
- Compare overhead allocation of activities based costing versus traditional cost systems
6. Discuss the concept of responsibility and accountability:
- Explain the purpose of preparing a budget
- Prepare various budget schedules and master budget
- Prepare a flexible budget and explain the advantages of the flexible budget approach over the static budget approach.
- Prepare a performance report for both variable and fixed overhead costs using the flexible budget approach.
7. Identify and discuss the information used in decision-making:
- Identify the management accountant's role in managerial decision-making.
- Discuss the conflict between quantitative and qualitative analysis in decision-making.
- Discuss the concepts of relevance, accuracy, timeliness and information costs with regard to the analysis of information.
- Identify and apply appropriate analytical techniques for managerial decision-making (e.g., make or buy, special orders, pricing.)
- Illustrate the conflict of short-run versus long run decision-making.
- Assessment Criteria
- Candidates must achieve a minimum result of 40 in the final examination or nominated assessment/s of each module. They must also achieve a minimum C grade pass overall from all assessments to receive a passing grade for the module.
- Teaching and Learning Strategy
- Teaching will involve blended delivery methods incorporating theoretical and practical classes, face to face, lectures, tutorials, workshops, group activities, guest lecturers, field trips, role-play, video conferencing, and on-line delivery, as appropriate
- Learning and Teaching Resource
- Required Text:
Garrison & NoreenManagerial Accounting (Latest Edition.); Irwin,