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ACC413 Module Outline

Costing

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73 views

ACC413 Module Outline

Costing

Uploaded by

Vincent Wariwa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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MIDLANDS STATE UNIVERSITY

FACULTY OF COMMERCE
DEPARTMENT OF ACCOUNTING
MODULE OUTLINE
MANAGEMENT ACCOUNTING TECHNIQUES AS AIDS TO DECISION-
MAKING: B –ACC413
Preamble
This module is a development Management Accounting Techniques as aids in decision-
making (Acc408). It aims at equipping the student with knowledge and techniques relevant in
the modern changing business environment. The techniques focus on conformance to set
goals and improved performance aimed at the sustainability of operations.
Pre-requisite modules
This module is built on technical knowledge drawn from Financial Management, Cost &
Management Accounting Techniques which assist in decision-making.
Module Objectives
By the end of the study, students should be able to
i)effect capital budgeting for projects of equal and unequal useful lives implementing
discounted cash flow methods.
ii)understand and effect diverse budgets in novel situations including an understanding of
their role in a changing environment.
iii)compute, analyse and interpret cost variances as part of planning & control
iv)effect network analysis and evaluate its role in project planning
v)understand & effect pricing decisions under various costing approaches.
vi)effect transfer pricing in decentralised enterprises
vii)effect divisional performance evaluations.
viii)integrate quality in decision-making
ix)understand the adjustments and relevance of management accounting techniques in a
technological environment.
Module Content
1.Budgets and budgetary control
The budgeting concept; aims & objectives of budgeting ; types of budgets; key aspects of
budget preparation ;fixed budgeting; flexible budgeting & cost control; merits & demerits of
budgeting; zero-based budgeting,; flexible budgeting; AB budgeting; budgetary control;
merits & demerits of budgeting; kaizen budgeting; non-financial performance indicators; role
of budgeting in a changing environment.

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2.Capital investment
Time value of money; cost of capital ; CAPM; project evaluation techniques-accounting rate
of return, payback, discounted payback, NPV & IRR; tax effects on cash flows; treatment of
depreciation & scrap values in project appraisals; projects with equal & unequal economic
lives; capital rationing; risks associated with capital investment projects
3.Standard Costing
Characteristics of standard costing; use of standards & standard costs; classification of
standards; merits & demerits of standard costs; designing & implementing a standard costing
system; direct material standards & variances-material price variances, material quantities
variances, material sub variances; recording of material cost variances; labour standards &
variances-labour rate variance, labour efficiency variances, sub variances; recording labour
cost variances; manufacturing overheads & variances-separate variable & fixed
manufacturing overhead variances; combined variable & fixed manufacturing overhead
variances; recording of manufacturing overheads; sales variances-sales volume variance;
sales prices variance; reconciliation of actual costs with the standard costs; variance reporting
4.Pricing decisions
Cost based pricing approaches; market based pricing approaches; time & material pricing;
life cycle costing;
5.Network analysis
Critical path analysis; Programme evaluation review techniques; merits & challenges
associated with each approach. Relevance in planning, control & performance evaluation.
6.Divisional performance evaluation
Performance evaluation for management; choice of the organisational structure;
responsibility centres; merits & demerits of decentralisation; divisional performance
measurement.
7. Transfer pricing
Criteria for development of TP; company policy governing inter-unit transfers; transfer
pricing; international transfers
8.Contemporary issues
Cost of quality, break even time; waiting time; influence of competitive advantage;
benchmarking; sustainability of operations; the changing management accounting
environment.
Assessment
Continuous assessment in the form of class presentations, in class tests constitute 30% whilst
the examination carries 70% towards the final mark.
Reading list

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i)Van Vuuren S J, Niemand A A, Meyer L, Botes V.L. Fundamentals of Cost & Management
Accounting 5th Ed or latest edition.
ii)Drury C Management & Cost Accounting 7th Ed or latest edition
iii)Zimmerman J.L Accounting for Decision-making & control
iv)Ricketts D & Gray J Managerial Accounting
v)Antony R.N Hawkins D.F & Merchant A A K Accounting texts & Cases latest edition

This module was effective from 1 July 2018

[email protected]

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