Advanced Management Accounting

(Lent Term)

Module tutor

Dr Wendy Beekes

Course objectives

Management accounting helps organisations to create value through improved decision making and control of organisational members. Traditionally management accounting courses focus on decision-making and planning. This course, however yields insights into both planning and decision-making and into performance evaluation and control. The decision-making element focuses on the techniques that enable a firm to find solutions for management accounting problems; the control part provides the insights and techniques that enable a firm to bring these solutions to fruition.

The course deals with techniques that facilitate planning and decision-making, such as, for example, multi-stage cost allocation and Activity Based Costing. But it also deals with the effects of these techniques on managerial behaviour, and how to control these behavioural effects.

The course is consistent with modern micro-economic theory, but the maths content (if any) is presented in an intuitive way. The integration of management accounting and modern microeconomics facilitates pursuing a career in consulting.

The course builds on the foundations laid in the introductory management accounting courses.

Texts 

Essential Reading

The main text for the course is: J. L. Zimmerman, 2014, Accounting for Decision Making and Control, 8th Edition. McGraw Hill Higher Education. ISBN-978-0-07-131475-6.

A number of academic articles will be part of the examinable content of the module.

Topics

  • The nature of costs
  • Opportunity cost of capital and capital budgeting
  • Organisational architecture
  • Responsibility accounting and transfer pricing
  • Budgeting
  • Cost allocation: Theory
  • Cost allocation: Practices
  • Absorption cost system
  • Criticisms of absorption cost systems:  Incentives to overproduce
  • Criticisms of absorption cost systems: Inaccurate product costs
  • Standard costs: Direct labour and materials
  • Overhead and marketing variances
  • Management accounting in a changing environment

Assessment

Coursework 25% and examination 75% of module mark.

Contact hours

Minimum of 22.5 hours in total.