Managerial Accounting (2235.YR.001666.1)

General information

Type:	OBL	Curs:	1	Period:	S semester
ECTS Credits:	2 ECTS

Teaching Staff:

Group	Teacher	Department	Language
Year 1	Santiago Simón del Burgo	Economía, Finanzas y Contabilidad	ENG

Financial Accounting

Fundamentals of Financial Accounting

The purpose of this course is to provide MBA students with the key points to understand how accounting is used in business as an input for decision-making, including an appreciation for the distinct roles of financial and management accounting. The concepts and topics covered in Cost Accounting presume that participants have a thorough understanding of the material covered in the Accounting course. The knowledge acquired in Accounting regarding the features of and the interrelationships among the fundamental financial statements will be used in this course to better understand some of the most relevant topics within the two functional areas of accounting: financial and management accounting.

Cost/management accounting aims:
- To introduce cost- and management-accounting terminology;
- To analyze the relationship between costs, volume, and profit;
- To show how accounting information can be used in decision making;
- To describe the logic of cost accumulation for inventory valuation and profit measurement;
- To provide tools for the preparation and variance analysis of budgets.

1. Unit 1. The scope of management accounting Differences between financial accounting and management accounting. Functions of management accounting. The decision-making process. Basic cost terminology. Readings: Drury, C. (2012). Management Accounting for Business (8th ed.), chapter 1 , chapter 2 Dressler, S. (2002). Management Accounting Master: Closing the gap between managerial accounting and external reporting. Journal of cost management HOMEWORK 1

2. Unit 2. Cost accumulation for inventory valuation and profit measurement Cost assignment: assignment of direct and indirect costs. Accounting for overhead expenditure. Job and process costing. Activity-based costing systems. Product and customer profitability analysis. Readings: Case Study: Destin Brass Case Study: Kanthal Drury, C. (2012). Management Accounting for Business (8th ed.), chapter 7, chapter 8. Cooper R., Kaplan R. S. (1988). How cost accounting distorts product costs. Management Accounting Hong J. (2000). Improving production decisions: A case for activity-based costing. Journal of cost management Kaplan R. S., Anderson S. R. (2004). Time-driven activity-based costing. Harvard Business Review Kaplan R. S., Narayanan V. G. (2001). Measuring and managing customer profitability. Journal of cost management Cooper R., Chew (1996). Control tomorrow's costs through today's designs. Harvard Business Review HOMEWORK 2

3. Unit 3. Cost behavior and cost-volume-profit analysis Cost-volume-profit analysis. The break-even point. Margin of safety. Degree of operating leverage. Cost-volume-profit analysis assumptions. How to deal with multiple products. Readings: Case Study: Forrest Gump Drury, C. (2012). Management Accounting for Business (8th ed.), chapter 3 HOMEWORK 3

4. Unit 4. Measuring relevant costs and revenues for decision making The meaning of relevance. Importance of qualitative factors. Product mix decisions when capacity constraints exist. Special order decisions. Outsourcing and make or buy decisions. Discontinuation decisions. Misconceptions about relevant costs. Readings: Case Study: Baldwin Bycicles Drury, C. (2012). Management Accounting for Business Decisions, chapter 4 Boyd, L. H. (1997). The use of cost information for making operating decisions. Journal of cost management HOMEWORK 4

5. Unit 5. Strategic planning, profit plans and budgets Strategic planning and strategic decision making through the use of profit plans. Plans vs budgets. The different roles of budgets. The multiple functions of budgets. Stages in the budgeting process. Conflicting roles of budgets. Readings: Case Study: Café Monte Bianco Drury, C. (2012). Management Accounting for Business Decisions, chapter 9 Hope J., Fraser R. (2003). Who needs budgets?. Harvard Business Review

6. Unit 6. Standard costing, variance analysis and strategic profitability reports The purposes of standard costing. Establishing cost standards. Flexible budgets. Variance analysis. The causes of variances. Preparing reports to reconcile actual profit with budgeted profit. Readings: Case Study: Compagnie du Froid Drury, C. (2012). Management Accounting for Business Decisions, chapter 11 Conclusion

ASSESSMENT BREAKDOWN

Drury, C. (2012). Management and Cost Accounting (10th ed.). Thomson.

Group	Teacher	Department
Year 1	Santiago Simón del Burgo	Economía, Finanzas y Contabilidad