Introduction to Management Accounting
Think of an iPhone. How much do you think that it cost Apple to make? Think of recent business news stories, with factory and store closures. As ways of cutting costs, how successful will these actually be? Or, maybe news stories announcing the launch of a new tablet PC – how has the manufacturer decided that this is a worthwhile product? Management accounting provides information which supports business decisions like these, whether it is setting selling prices, or understanding costs, assessing performance, and investing in new products. At an introductory level, this module considers costs and revenues, and how they can be measured and used to calculate profit and help make decisions, both in the short and long term. It also examines how budgets are prepared, and used as benchmarks to assess performance. Accounting? Boring? Never!
This module introduces subjects like costing, decision making, budgeting and budget outcomes which are relevant across countries.
Sustainability is discussed in relation to wastage and the comparison between actual and expected performance.
All of the resources for this module are available on the ELE (Exeter Learning Environment).
Students develop their skills in team-working and problem-solving, as well as their numeracy and discursive skills.
Full module specification
|Module title:||Introduction to Management Accounting|
BEA1008 Introduction to Financial Accounting
Cannot be taken with BEA1006 Accounting 1
|Duration of module:||
Duration (weeks) - term 2: |
The aim of the module is to provide students with a range of computational and analytical skills, from estimating the cost of a product and reporting on profit earned, to preparing analyses to support operating and investment decisions. The need to present results in an accessible way is also highlighted. All of these skills will be useful to those entering a wide range of occupations where financial data need to be handled professionally and with insight.
ILO: Module-specific skills
- 1. describe the purpose and role of cost and management accounting
- 2. identify different cost characteristics
- 3. understand and apply the different techniques used in accounting for materials, labour and production overheads
- 4. describe job and batch costing; and prepare accounts in job costing situations
- 5. describe process costing and its uses for inventory valuation and the costing of joint and by-products
- 6. describe marginal costing and its use in cost-volume-profit analysis
- 7. explain the role of budgeting in financial planning and control, and explain different budget types
- 8. prepare budgets for sales, production, materials (usage and purchases), labour and overheads
- 9. explain and prepare fixed, flexible and flexed budgets
- 10. explain the purpose and principles of standard costing
- 11. calculate and interpret variances for: sales, materials, labour, variable overheads and fixed overheads
- 12. apply management accounting information for long-run decision making, employing basic investment appraisal techniques
ILO: Discipline-specific skills
- 13. understand how managers use accounting information to aid decision making, planning and control
- 14. apply management accounting concepts and practices to analyse business problems
- 15. identify and present appropriate information to assist management with controlling the business and taking financial decisions
ILO: Personal and key skills
- 16. demonstrate basic written communication skills
- 17. demonstrate basic problem solving skills
Learning activities and teaching methods (given in hours of study time)
|Scheduled Learning and Teaching Activities||Guided independent study||Placement / study abroad|
Details of learning activities and teaching methods
|Category||Hours of study time||Description|
|Form of assessment||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Tutorial problems for focussing discussion||2-3 hours preparation by student/ I hour in-class discussion||1-17||Tutor comments and suggested solutions|
Summative assessment (% of credit)
|Coursework||Written exams||Practical exams|
Details of summative assessment
|Form of assessment||% of credit||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Coursework test (Multiple choice and short answer questions)||20||1 hour||1-17||Mark awarded. Indicative answers posted on line|
|Examination||80||2 hours||1-17||Mark awarded. Indicative answers posted on line|
Details of re-assessment (where required by referral or deferral)
|Original form of assessment||Form of re-assessment||ILOs re-assessed||Timescale for re-assessment|
|Multiple choice question test and Examination||2-hour examination (100%)||1-17||August (prior to start of new academic year)|
The dual assessment (multiple choice test and examination) is replaced by a single re-sit examination which constitutes 100% of the final mark.
- Introduction to management accounting
- Cost classification and costing systems
- Accounting for materials, labour and overheads
- Overhead accounting: absorption costing v. activity-based costing
- Job versus process costing
- Marginal costing and contribution
- Cost-volume-profit (CVP) analysis
- Planning and control
- Standard costing and variance analysis
- Long term decision making and investment appraisal
Indicative learning resources - Basic reading
Burns, J., Quinn, M., Warren, L. and Oliveira, J. (2013) Management Accounting, 1st edition, Maidenhead: McGraw-Hill Education
Seal, W., Garrison, R., and Noreen, E. (2012) Management Accounting, 4th edition, Maidenhead: McGraw-Hill Education
Drury, C. (2012) Management and Cost Accounting, 8th edition, Andover: Cengage Learning EMEA
Module has an active ELE page?
Last revision date