• ACCT2005
  • Management Accounting

  • Credits (ECTS): 10
  • Accounting and Finance

Modules are delivered
as part of a programme.
To apply for the
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Module Description

This module represents the student's first introduction to the subject area of management accounting. It is designed to provide the student with a firm understanding of the principles and basic techniques of cost and management accounting. The wider aspects of the subject will be explored in the subsequent year of study.

Module Aims

It aims to develop an understanding and appreciation for the purposes for which costs are used, and how the same costs are used differently for different purposes. It builds on the accounting concepts, principles and procedures in Accounting 1 and extends and applies them to the management accounting functions. The scope of the subject ranges from an understanding of the concepts, to the practical considerations of cost accumulation, classification, decision making, planning and control.

Indicative Syllabus

Cost and Management Accounting Framework
The relationship between cost accounting, management accounting and financial accounting.
The role of the management accountant in the management process.
Cost accounting as part of a management information system.
The design of a costing system.
Classification of costs
The nature of costs and their purpose.
The need for classification and coding of costs.
The concept of cost objects, cost units, cost centres.
Behaviour of costs: variable costs and fixed costs.
Direct costs and indirect costs, product costs and period costs.
Controllable and non-controllable costs.
Product cost determination
Material costs and control
Procedures and documentation necessary for ordering, receiving, storing and issuing materials from stock.
Ledger entries for stock movements and stock losses.
Stock valuation methods used in pricing stores issues and the effect on profit of the valuation method selected.
An introduction to cost control
Labour costs and control
Methods used to relate labour costs to work done.
Attendance and performance records.
Remuneration methods and incentive schemes.
Payroll routine and analysis of labour cost, treatment of overtime and idle time.
Measures of labour efficiency and labour turnover.
Ledger entries relating to labour costs.
Overhead costs
Nature, classification and analysis of overhead costs.
Allocation, apportionment and absorption of overheads including reciprocal service situations.
Establishment of overhead rates and treatment of under/over recovery; advantages of departmental rates.
Understanding activity based costing and the concept of cost drivers.
Ledger entries relating to overhead costs.
Cost Accounting Systems/ Design of a Cost System
Job, batch and contract costing - valuation of work completed and in progress.
Cost accounting appropriate to production based organisations and service industries.
Integrated and non-integrated accounting systems including their reconciliation.
Process costing:
The principle of equivalent units, treatment of normal and abnormal losses and gains.
Valuation of process transfers and work-in-progress using equivalent production and based on FIFO and average pricing methods.
Joint products and by-products.
Ledger entries for different costing methods.
Information for Decisions
Marginal costing compared with absorption costing; reconciliation of profits given by each method.
Cost volume profit analysis and break-even as a short range decision making tool; contribution theory and margin of safety.
Basic and contribution break-even charts and profit/volume graphs (single and multiple product)
The concept of opportunity and relevant costs and their use in special pricing decisions.
Planning and Control
Types of budgets and the budgeting process.
Purposes of budgeting; the role of the budget committee and the budget manual.
Benefits of budgeting.
Preparation of functional budgets for operating and non-operating functions.
Identification of the key budget factor and budget period.
Cost estimation.
Cash budgets; the master budget.
Long and short term planning.

Total Contact Teaching Hours:78

Pre-requisite Modules

Title Code
Accounting ACCT1003

Please note that the catalogue is provided as a guide to modules in DIT. Not all modules listed will necessarily be offered every year and new modules may also be added. Information subject to change. For detail on specific programmes/modules please contact the relevant School directly.