Managerial Accounting

Students must have knowledge of Management and Administration, namely with regard to the Management Cycle and the various functional areas of organizations.

Students must also have knowledge of Financial Accounting, namely with regard to Financial Statements, accounting records in a double-entry system and the Accounting Standardization System, in general.

The teaching methods to be used are as follows:

Theoretical component: Expository method, in which the teacher presents concepts, principles, deductions or statements from which conclusions or consequences are drawn. The participation of students will be encouraged during the presentation of the themes and that the students are the ones to draw conclusions.

Practical component: Programmed teaching, based on the active participation of the student, on division of tasks into parts that are easy to solve, on learning with an increasing degree and complexity, on immediate feedback and, whenever possible, on adaptation to the rhythm of each student.

This course aims to provide the student with knowledge and understanding of the process of formation of costs and results in the company, the accounting procedures for their determination and analysis in providing relevant information for planning and management control.

Thus, the student must obtain skills in the scope of calculating the cost of production, valuing production inventories and calculating the result for the period. by functions and by products, according to the different methodologies and criteria available and that depend not only on the legal regulations but also on the characteristics of the organization and the objectives it establishes in terms of the information to be made available to managers.

I – Management Accounting and the Business Environment

1.1. The management cycle and the need for accounting and extra-accounting information;

1.2. Organizational structure and functions;

1.3. International competition, changing business environment and “new” management techniques: Value Chain Analysis, Just in time, Total Quality Management, Process Reengineering, Theory of Constraints;

1.4. Scope and objectives of Management Accounting: measurement of inventories and support for decision-making and Management Control;

1.5. The role of the Accountant/Management Controller and its articulation with Managers;

1.6. Differences and complementarity between Management and Financial Accounting;

1.7. The SNC and Management Accounting;

1.8. Professional ethics in the performance of the functions of Accountant/Management Controller.

II – Costs/Expenditures: Terminology, Concepts and Classifications

2.1. Distinction between expense, cost/expense and payment and income, profit and receipt;

2.2. Classification of costs in the financial statements: Costs/expenses by nature and by functions;

2.3. Notion of cost object;

2.4. Product costs versus period costs;

2.5. Reconciliation of the result between the Income Statement by Functions and the Income Statement by Nature;

2.6. Components of product cost: direct materials and materials, direct labor, indirect production costs and other direct production costs;

2.7. Classification of costs according to the form of assignment to the cost object;

2.8. Classification of costs according to their behavior in face of changes in the level of activity;

2.9. Classification of costs according to decision making.

III – Cost accumulation systems

3.1. Manufacturing regimes, activity sectors and applicability of different cost accumulation systems: by Production Order, by Process or Mixed

3.2. Accumulation of costs by Production Order (direct method)

3.2.1. The flow of accumulated costs per Production Order;

3.2.2. Cost sheets of production orders and measurement of finished production orders and in progress.

3.3. Accumulation of Costs by Process

3.3.1. The flow of accumulated costs per process;

3.3.2. The concept of equivalent units of production;

3.3.3. Measurement of finished production and ongoing production and Production report (Weighted Average Cost / FIFO);

3.4. Accumulation of costs by Operation (Mixed/Hybrid).

IV – JOINT PRODUCTION and defective production

4.1. Definition of joint production, main concepts and problems associated with the measurement of joint products;

4.2. Necessity and usefulness of sharing joint costs;

4.3. Different types of joint products and criteria applicable to the sharing of joint costs;

4.3.1. Criteria applicable to the distribution of joint costs by co-products;

4.3.2. Criteria applicable to the distribution of joint costs by by-products;

4.3.3. Treatment of specific costs of waste and residues;

4.4. defective production

4.4.1. Definition of defect and classification of defective production (normal and abnormal);

4.4.2. Accounting treatment and measurement of production with and without defects.

V – Articulation of Accounting Systems

5.1. Necessity and usefulness of articulation between accounting systems;

5.2. Monistic systems;

5.3. Dualist systems;

5.4. Class 9 accounts.

NAO

Fundamental bibliography:

•  Horngren, Charles T.; Dating, Srikant M.; Rajan and Madhav V. (2015), Cost Accounting, Pearson, 15th Edition.
• Drury, Colin (2019), Management Accounting for Business, Cengage Learning, 7th Edition.

Complementary bibliography:

• Drury, Colin (2017), Management and Cost Accounting, Cengage Learning, 10th Edition.
• Garrison, Ray H. and Noreen, Eric W. (2013), Management Accounting, McGraw Hill, 14th Edition.
• Hansen & Mowen (2018), Management Accounting, South-Western College Publishing, 10th Edition.