Managerial Accounting

Aims

1. Understand the costing methods and techniques available.
2. Select appropriate methods and techniques which an organisation can use to calculate costs under different situations.
3. Construct budgets for both planning and control purposes, including cash flow forecasts.
4. Understand all aspects of working capital management.
5. Appreciate how information technology can assist when preparing information for management.
6. Understand Capital Investment Appraisal and Financial Mathematics.

Program Content and Learning Objectives:

After completing the programme the student should be able to:

Understand the control systems required for materials, labour and overheads

• The nature of costs
• Recognise the differences between fixed, variable, semi fixed and semi variable costs
• Problems of allocation/apportionment of overheads pricing of materials calculation of overhead recovery rates

Analyse data according to various cost classifications and the effect of volume on costs

• Cost volume profit analysis
• Comparison between the economist’s and the accountant’ss cost volume chart

Recognise how cost systems differ by activity i.e job and process costing

• Characteristics of process costing, equivalent units, methods of pricing
• Normal and abnormal waste, joint and by products
• Methods of apportionment of joint costs

• Marginal costing, key factors, opportunity costs, sunk costs, differential costs,qualitative aspects

• Format of a marginal profit statement, format of an absorption profit statement

• Construct budgets for both planning and control purposes. administration of budgets, roll over budgets, objectives of budgets, the budget key factor, functional budgets, master budgets, behavioural aspects of budgetary control
• Zero based budgets

• Overheads and sales, types of standards, preparation of operating statements

• Operating cycle, funding and control of working capital

• Financial and non-financial factors to be considered when making investment decisions
• Methods of investment appraisal including pay back. the time value of money and average rate of return
• The calculation of compound interest
• Annuities and mortgages
• Discounted cash flow
• Net present value
• Internal rate of return.