Management Accounting

Financial Accounting

Lecture on theoretical contents:

Active and interrogative in the resolution and discussion of practical cases

a.1 Objectives:

Provide the student with an understanding and knowledge of the process of formation of costs and results in organizations, as well as the accounting procedures for their determination, analysis and use in the valuation of inventories, in the provision of information for planning and control, as well as in decision-making. Thus, the objectives to be achieved during this semester are the following:

• Recognize the objectives and scope of Management Accounting in organizations;
• Enunciate and apply the basic concepts that support Management Accounting;
• Know the main differences and complementarities between the various systems of interconnection and coordination between Financial Accounting and Management Accounting;
• Knowing how to apply the various ways of classifying different types of costs;
• Know the components that comprise, in absorption costing, the full cost of products and services;
• Identify the different manufacturing regimes and use the most appropriate cost accumulation systems, namely production order, process and mixed costing.
• Knowing how to distribute indirect costs, using the Cost Center method, distinguishing, among others, main and auxiliary centers;
• Use the Activity-Based Costing (ABC) system, as an alternative to traditional costing systems, from the perspective of sharing and imputing indirect costs and from the perspective of value creation;
• Know the main problems of joint production and proceed with the valuation of joint products;
• Know the various inventory costing systems, in particular the complete, variable and rational total costing system;
• Recognize the existing relationships between Cost, Volume and Result, (C-V-R) and use this model in short-term planning.

a.2 Skills to achieve

After completing the UC, the student must obtain the following general skills:

• Capacity for analysis, synthesis and decision-making;
• Critical and self-critical capacity;
• Ability to understand theory and apply it to practice;
• Ability to work in groups.
• And the following technical skills:

Understand and know how to use costing accounting systems to value inventories, for planning and management control and for decision making;
Transpose these technical skills to the design and construction of information systems.

1. Management Accounting
1.1. Scope and objectives of Management Accounting
1.2. Income Statement: by Nature and Functions
1.3. Articulation Systems between Financial Accounting and Management Accounting
1.4. Recent Developments in Management Accounting

2. Fundamental Concepts of Management Accounting
2.1. Costs/expenses, expenses and payments versus Income/Income, revenues and receipts
2.2. Cost Objects, Production Cost, Complex Cost and Economic-Technical Cost
2.3. Product Costs and Expenses for Periods
2.4. Classification of costs/expenses and income/income: Control and Decision Making
2.5. Relevant Costs and Income for Decision Making

3. Production cost components
3.1. The subjects
3.2. the workforce
3.3. General (indirect) production costs
3.4. Costs of finished production and production in process of manufacture
3.5. Extra production costs

4. Inventory Costing Systems
4.1. Alternative Costing Systems
4.2. Complete Total Costing
4.3. Rational Costing
4.4. Variable Costing
4.5. Costing alternatives and effects on income

5. Costing based on Cost Centers
5.1. Functional division of costs
5.2. Cost centers. Main and Auxiliary Centers
5.3. Primary and secondary breakdown of costs by Centres. Reciprocal benefits.
5.4. Cost Calculation Maps

6. Activity Based Costing (ABC)
6.1. ABC and cost center-based costing
6.2. Activities and expense drivers
6.3. Cost Calculation Maps

7. Calculation of Production Cost and Manufacturing Regimes
7.1. manufacturing regimes
7.2. Direct Method (order-to-order or production-order costing)
7.3. Indirect Method (process costing)
7.4. Mixed Method

8. Joint Production
8.1. Reasons for sharing joint costs
8.2. Types of joint products: co-products, by-products and waste
8.3. Criteria for sharing joint costs by co-products
8.4. Criteria for sharing joint costs between by-products and waste.

9. Cost-Volume-Profit Relationships
9.1. Relationships between costs and volume
9.2. Cost Behavior
9.3. The contribution model
9.4. CVP Analysis in Variable Costing
9.5. The sales mix concept
9.6. CVP Analysis Assumptions

NAO

Basic Bibliography:

• Saraiva, A., Rodrigues, A., Coimbra, C., Fantasia, M. e Nunes, R., (2018), Contabilidade de Gestão – Métodos de Custeio e Valorização de Inventários, 1ª edição, Editora Almedina, Coimbra.
• Saraiva, A., Rodrigues, A., Coimbra, C., Correia, E., Fantasia, M. e Nunes, R., (2022), Contabilidade de Gestão – Métodos de Custeio e Valorização de Inventários – Exercícios, 2ª edição, Editora Almedina, Coimbra.
• Caiado, A. Pires. (2015), Contabilidade Analítica e de Gestão, Áreas Editora, edição 10-2015.

Complementary Bibliography: 

• Drury, Colin: Management Accounting for Business (2021), 11th edition. South-Western Cengage Learning ;
• Ferreira, Domingos et al. (2014). Contabilidade de Gestão – Estratégia de custos e dos resultados, 1ª ed., Rei dos Livros;
• Franco, Victor et al., (2010), Temas de Contabilidade de Gestão – Os Custos, os Resultados e a Informação para a Gestão, 3ª edição, Editora Livros Horizonte, Lisboa;
• Franco, Victor et al., (2012), Temas de Contabilidade de Gestão – Gestão OrçAPental e Medidas de Avaliação do Desempenho, 3ª edição, Editora Livros Horizonte, Lisboa;
• Garrison R.H., Noreen E.W., Brewer P.C.: (2020); Managerial accounting McGraw-Hill Irwin, 13th edition, New York,
• Garrison, Ray H. e Noreen, Eric W. (2013), Contabilidade Gerencial, 14ª Edição, LTC Editora, Rio de Janeiro;
• Hansen & Mowen (2005), Management Accounting, 7th ed., South-Western College Publishing; Im-13-124_A2 6;
• Horngren, Charles T. et al. (2018), : Cost accounting a managerial emphasis- Prenhall;