The aims of this module are:

To develop in students a knowledge and Understanding of the Management Accounting Concepts and Techniques associated with the Internal Management of a Business within a Changing Environment.

To enable students to identify appropriate Management Accounting Techniques for Decision Making, Planning and Control; and apply these Techniques in the generation of Management Accounting Reports.

To develop in students a critical appreciation of the various Management Accounting Techniques adopted for Planning, Decision Making and Control.

The knowledge, understanding and cognitive, practical and transferable skills which a student is expected to be able to demonstrate after studying this module is expressed in the following learning outcomes. These are grouped under appropriate syllabus headings.

Management Accounting and the Changing Business Environment
(10 Hours / One Week)

By the end of this Syllabus Topic the student will be able to:

Identify Management Accounting’s developing role as part of a Business Information System.

Describe the impact on Management Accounting of –

Flexible Manufacturing Systems

Production Management Systems

Materials Requirement Planning

Just in Time Systems (JIT)

Total Quality Management (TQM)

Word Class manufacturing

Activity Based Costing (ABC)

By the end of this Syllabus Topic the student will be able to:

Understand how Standards for Performance are prepared

Apply techniques to Investigate, Interpret and Analyse Variance Statements

Describe Budgeting as a Planning and Control activity

Prepare Fixed and Flexible Budgets, Master and Subsidiary Budgets

Describe management participation in Budget preparation, and in the exercise of Budgetary Control

Prepare accounting statements using Variance Accounting Techniques

Explain the use of Financial Models in Budgeting including Learning Curve Theory

Explain what is meant by Zero-based Budgeting and demonstrate the ability to prepare Budgets from given data using the technique

Apply Probability and Standard Deviation to the Budgeting process

Explain the Behavioural and Control aspects of Budgeting

Identify the relevance, strengths and weaknesses of Budgeting and Budgetary Control against current issues in Management Accounting such as Activity Analysis, Just-In-Time concepts, TQM and Activity Based Budgeting

By the end of this Syllabus Topic the student will be able to:

Analyse decisions into their various categories – 

Explain and demonstrate the ability to apply the following concepts to a range of decision-making situations – 

Apply CVP Analysis to a range of Decision-Making situations

By the end of this Syllabus Topic the student will be able to:

Explain how market conditions can affect Pricing Policy

Explain and distinguish between Price Leadership and Price Discrimination

Explain and apply the following concepts – 

Describe the four main bases for setting Transfer Prices

Explain the function of a Transfer Price and the role of Transfer Pricing in the absence of an External Market

Explain Transfer Price as an Opportunity Cost

Explain how Linear Programming can be used to implement a Transfer Price

By the end of this Syllabus Topic the student will be able to:

Explain what is meant by Responsibility Accounting

Describe the advantages and problems of – 

Describe the degree of authority which may be given to the manager of a Responsibility Centre

Describe ways in which Divisional Performance targets may be set

Describe methods by which Divisional Performance may be assessed

Explain the importance of and apply Return on Investment as a key financial ratio

Compare the use of Residual Income and Return on Investment when evaluating the profitability of an investment.

Describe how inter-firm or interdepartmental comparison can be used in Responsibility Accounting.

By the end of this Syllabus Topic the student will be able to:

Explain the Purpose of Capital Investment Appraised

Calculate

Assessment

Achievement of these Learning Outcomes will be reflected in student responses to a 
THREE HOUR OPEN BOOK Examination.

Examination Structure

Five Compulsory Questions

Indicative Reading
Current Editions of the following Textbooks are recommended.
 
Textbooks:  

Journals:

Financial Accountant

Management Accountant

Accountant

Journal of Accountancy