Management Accounting

Financial Accounting

To promote a deep understanding of cost calculations, the preparation of income statements, and budgeting, we will use a combination of practical exercises and group discussions, as well as critical analyses conducted by the students. This dynamic, collaborative, and interactive approach falls under problem-based learning. To master the theoretical content, we will use the expository method.

OBJECTIVES:

A. Understand the position of Cost Accounting within the broader discipline of Management Accounting;

B. Know the basic concepts of Management Accounting;

C. Understand the various ways to classify different types of costs;

D. Gain detailed knowledge of the components that constitute the total cost of products;

E. Learn to allocate indirect costs using the Cost Centers method;

F. Understand and use the Activity-Based Costing (ABC) system;

G. Identify different manufacturing regimes through concrete situations;

H. Acquire detailed knowledge of inventory costing systems;

I. Recognize the relationships between Cost, Volume, and Profit;

J. Understand the use of standard costs and the process of planning and budgeting.

SKILLS:

By the end of the course unit, students should be able to:

1. Determine the components of the production cost.

2. Record the cost components of production at all stages of manufacturing in a processing unit or a service-providing company.

3. Analyze the cost components of goods and production costs.
4. Prepare the Income Statement by Functions.
5. Prepare operational and cash budgets based on standard costs.

I – MANAGEMENT ACCOUNTING

 1.1 Scope and objectives of Management Accounting

 1.2 Income Statement: by Nature and by Functions

 1.3 Systems of Articulation between Financial Accounting and Management Accounting

 II – FUNDAMENTAL CONCEPTS OF MANAGEMENT ACCOUNTING

 2.1 Costs/expenses, expenditures and payments versus Revenues/Income, receipts and earnings

 2.2 Cost Objects, Production Cost, Comprehensive Cost and Economic-Technical Cost

 2.3 Product Costs and Period Expenses

 2.4 Classification of costs/expenses and revenues/income: Control and Decision Making

 III – COMPONENTS OF PRODUCTION COST

 3.1 Materials

 3.2 Labor

 3.3 General (indirect) production expenses

 3.4 Costs of finished production and work in progress

 3.5 Extra-production expenses

 IV – INVENTORY COSTING SYSTEMS

 4.1 Alternative Costing Systems

 4.2 Full Absorption Costing

 4.3 Rational Costing

 4.4 Variable Costing

 4.5 Costing alternatives and effects on the result

 V – COST CENTER BASED COSTING

 5.1 Functional division of costs

 5.2 Cost centers: Main and Auxiliary Centers

 5.3 Primary and secondary allocation of costs to Centers: Reciprocal services

 5.4 Cost Determination Maps

 VI – ACTIVITY-BASED COSTING (ABC)

 6.1 ABC and Cost Center based costing

 6.2 Activities and cost drivers

 6.3 Cost Determination Maps

 VII – DETERMINATION OF PRODUCTION COST AND MANUFACTURING REGIMES

 7.1 Manufacturing regimes

 7.2 Direct Method (job-order costing or production order costing)

 7.3 Indirect Method (process costing)

 7.4 Mixed Method

 VIII – JOINT PRODUCTION

 8.1 Reasons for allocating joint costs

 8.2 Types of joint products: coproducts, byproducts and waste

 8.3 Criteria for allocating joint costs to coproducts

 8.4 Criteria for allocating joint costs to byproducts and waste

 IX – COST-VOLUME-PROFIT (CVP) RELATIONSHIPS

 9.1 Relationships between costs and volume

 9.2 Cost behavior

 9.3 Contribution model

 9.4 CVP analysis in Variable Costing

 9.5 The concept of sales mix

 9.6 Assumptions of CVP Analysis

 X – STANDARD COSTS

 10.1 Concept and use of Standard Costs

 10.2 Concept and use of Operational Budgets

 10.3 Concept and use of Cash Budgets

NAO