Section
Open allClose all
Instructions: Clicking on the section name will show / hide the section.
Course Introduction
Any organization’s long-term competitive success is critically dependent on its ability to identifying, measuring, analyzing, interpreting, and communicating financial and non-financial information to management for the pursuit of an organization's goals. The term managerial accounting refers to the set of information concepts, models and systems that provide this information and control for managers. This module is included to enable the students to master the key issues in the nature, functions, strategic context and techniques of fundamental management accounting that are currently being applied in various business industries today.
Course Guide
Please read the course guide given below. This course guide will contains important information about this course such as the course learning outcomes, the minimum amount of time you should spend for this course, the outlines of the topics covered, class schedules, contact details of your course facilitator, assessments and others. You are required to go through the course guide before you proceed to other learning activities. You are advised to consult your course facilitator either through the discussion forum or during consultation hours if you wish to seek clarification on any matters related to this course.
Online Class Schedule
Class Recording
Assessment
Chapter 1: Introduction to costing and Management Accounting
Management accounting plays an important role in every organization. It focuses on effective management of resources to improve customer value and shareholder value. Hence, this lesson provides an introduction to management and cost accounting, distinguish between financial and management accounting, role of management accounting in providing information to managers for planning, controlling, performance measurement.
Upon completion this lesson, you should be able to:
- define management accounting;
- explain primary activity of management accounting;
- distinguish between financial and management accounting
- discuss significant management accounting information for planning, decision making and performance management;
- discuss the factors that have influenced the changes in the competitive environment;
Chapter 2: Elements of Cost
This lesson introduces the element of cost in management accounting. Costs are classified as either direct or indirect with respect to the cost object. Direct cost is a cost that can be traced to the cost objects. On the other hand, indirect cost is a cost that relates to the cost object but cannot be traced to the cost object.
Upon completion this lesson, you should be able to:
- describe the cost and classification of cost in order to provide various types of cost information; and
- evaluate cost collection methods to determine at product cost
Chapter 3: Material Cost and Inventory Valuations
This lesson introduces the inventory valuation method. Inventory is company’s current assets and it is the driving force behind the company’s ability to generate revenue and profits. Hence, the company needs to manage inventory in a cost-efficient way to optimize company profit.
By the end of this lesson, you should be able to:
explain the materials recording procedure, procurement, and storage and store control
calculate cost material issues using:
o first in First out (FIFO)
o Last in Last out (LIFO)
o Weighted average (AVO);
- evaluate and compute EOQ, maximum stock level& minimum stock level; and
- discuss the advantages and disadvantages of the above three methods
Chapter 4: Labour cost
The cost of labor is the sum of all wages paid to employees, as well as the cost of employee benefits and payroll taxes paid by an employer. The cost of labor is broken into direct and indirect (overhead) costs. Direct costs include wages for the employees that produce a product, including workers on an assembly line, while indirect costs are associated with support labor, such as employees who maintain factory equipment.
By the end of this lesson, you should be able to:
- explain labour recording, method of remuneration, time-based schemes;
- compute labour cost based on time-based schemes, premium bonus schemes
labour turnover;
Chapter 5: Overhead cost
Overheads are known as indirect cost. In most organisations the costing system is set up to measure the costs of individual managers’ areas of responsibilities, such as departments, work centres or activity centres. An indirect cost is one which cannot trace into a particular department, work centres or activity centres.
By the end of this lesson, you should be able to:
- define and explain overhead cost and classification of overhead cost;
- apply allocation, apportionment and absorption and compute overhead cost; and
- evaluate under/over overhead cost
Chapter 6: Variable and absorption costing
Income from operations is one of the most important information reported by a company. Depending on the decision –making needs of management, income from operations can be determined using absorption or variable costing.
By the end of this lesson, you should be able to:
- explain the differences between absorption costing and variable costing system;
- prepare profit statements based on a variable costing and absorption costing system; and
- explain the difference in profits between variable and absorption costing profit calculations.
Chapter 7: Budgeting-Part 1
The purpose of budgeting to assist management in planning and controlling the resources of their organisation, and enhancing company’s decision making. A budget is a financial plan for a defined period, often one year. It may also include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows. Companies, governments, families and other organizations use it to express strategic plans of activities or events in measurable terms.
By the end of this lesson, you should be able to,
- Explain the importance of budget in organization;
- Describe the key steps of budgeting process;
- Explain key functions of budget.
Chapter 8: Budgeting-Part 2
The purpose of budgeting to assist management in planning and controlling the resources of their organisation, and enhancing company’s decision making. A budget is a financial plan for a defined period, often one year. It may also include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows. Companies, governments, families and other organizations use it to express strategic plans of activities or events in measurable terms.
By the end of this lesson, you should be able to,
- Compute master budget, such as,
- 1. Sales budget,
- 2. Production budget,
- 3. Direct material usage budget,
- 4. Direct material purchase budget,
- 5. Direct labour budget,
- 6. Manufacturing overhead budget,
- 7. Selling & administrative budget
- Discuss behavioral aspects of budget
- Flexible budget
Chapter 9: Standard Costing -Part 1
Standard costs are pre-determined cost. Standard costing is a control system for comparing the planned costs and revenues with actual results in order to report variances for the purpose of performance measurement and control.
By the end of this lesson, you should be able to:
- define standards cost;
- outline the purposes of standard costing; and
- describe types of standards costing: Ideal, attainable & current standard;
Chapter 10: Standard Costing -Part 2
Standard costs are pre-determined cost. Standard costing is a control system for comparing the planned costs and revenues with actual results in order to report variances for the purpose of performance measurement and control.
By the end of this lesson, you should be able to:
- calculate direct labour rate variance, direct labour efficiency variance, direct labour idle variance;
- calculate direct material price variances, direct material usage variance; and
- explain the causes generated from variance
Chapter 11: Standard Costing-Part 3
Standard costs are pre-determined cost. Standard costing is a control system for comparing the planned costs and revenues with actual results in order to report variances for the purpose of performance measurement and control.
By the end of this lesson, you should be able to:
- calculate variable overhead expenditure variance, variable overhead efficiency variance;
- calculate fixed overhead expenditure variance, fixed overhead efficiency variance, fixed overhead capacity variance;
- explain the causes generated from variance; and
- describe benefits of reconciliation of budgeted and actual profit for variance
Chapter 12: Pricing decision and profitability analysis
The purpose of pricing decision and profitability analysis to assist management in planning and controlling the resources of their organisation, and enhancing company’s decision making. Organisations that sell products and services that are highly customised or differentiated from each other by special features, or who are market leaders, have some discretion in setting prices. The cost of information that is accumulated and presented is therefore important for pricing decisions.
By the end of this lesson, you should be able to,
· Explain the relevant cost information that should be presented in price setting firms for both
short term and long-term decisions,
· Identify and describe three different types of pricing methods, and
· Evaluate the target costing approach to pricing.
Chapter 13: The role of costing information in pricing decisions
The purpose of pricing decision and profitability analysis to assist management in planning and controlling the resources of their organisation, and enhancing company’s decision making. Organisations that sell products and services that are highly customised or differentiated from each other by special features, or who are market leaders, have some discretion in setting prices. The cost of information that is accumulated and presented is therefore important for pricing decisions.
By the end of this lesson, you should be able to:
- Discuss the three major factors that affect pricing decisions.
- Discuss the cost of allocations, and
- Compute
the target costing approach to pricing.
TEXT BOOK
References
OBA 4408 Managerial Accounting Examination
- Opened: Saturday, 20 April 2024, 8:30 AMClosed: Saturday, 20 April 2024, 1:30 PMView Make attempts: 1
