Module Specifications..
Current Academic Year 2023 - 2024
Please note that this information is subject to change.
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Repeat examination |
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Description This module builds on AC576- Management Accounting: Costing, Planning and Control and seeks to develop knowledge and skills in the application of management accounting techniques to quantitative and qualitative information for decision-making, performance evaluation and control. | |||||||||||||||||||||||||||||||||||||||||
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Learning Outcomes 1. Describe the decision-making processes and the role of accounting information that is used in those processes. Appreciate the context of decision-making and the models of the decision-making process. Develop an understanding of the international context (US, UK, Europe and Japan) of decision-making using research studies. Critically appraise, select and then appropriately apply decision-making techniques to facilitate business decisions and promote efficient and effective use of scarce business resources, appreciating the risks and uncertainty inherent in business and controlling those risks. Develop an awareness of the potential of analytics to contribute to better decision-making. 2. Prepare, analyse and interpret relevant accounting information and present reports to management for a variety of decision scenarios including the service sector. 3. Identify the potential behavioural implications of performance measurement and management. Develop an awareness and critical evaluation of non-financial measures of performance and of the design issues in multi-dimensional performance measurement models (MDPM). Develop and critically appraise internal and external reports for performance measurement and management. Develop an understanding of the potential of analytics packages to generate key performance indicators to monitor the business model in a variety of service-based industries. 4. Develop awareness through course readings, of the international and cultural aspects of performance measurement and management and of transfer pricing, as they apply to company operations, including divisionalised companies. Synthesise and critique the content of these readings as prescribed by the lecturer. | |||||||||||||||||||||||||||||||||||||||||
All module information is indicative and subject to change. For further information,students are advised to refer to the University's Marks and Standards and Programme Specific Regulations at: http://www.dcu.ie/registry/examinations/index.shtml |
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Indicative Content and Learning Activities
Context and Models of Decision-makingThe role of accounting information in management decision-making; uncertainties, biases and decision quality. Decision-making models and context- domestic and international; strategic decisions, organisational planning and control decisions; link between decision-making, planning, control and performance measurement. Organisational vision, core competencies, organisational strategies and operating plans and actual operations; measuring, monitoring and motivating as part of the overall management decision-making process. Improvements in information for management decision-making- business intelligence systems and the role of analytics; analysing the ethics of a decisionCost Estimation, Routine Decision-making- Cost Volume Profit Analysis (CVP)Elementary techniques of Cost Estimation- high low and inspection of accounts method; learning curve effect and application of same to a budgetary problem. Meaning of gross margin, contribution margin and mark-up. Explain the nature of CVP analysis. Calculate and interpret the break-even point and margin of safety. Calculate the contribution to sales ratio, in single and multi-product situations, and demonstrate an understanding of its use. Calculate target profit or revenue in single and multi-product situations and demonstrate an understanding of its use. Prepare break even charts and profit-volume charts and interpret the information contained within each, including multi-product situations. Discuss the limitations of CVP analysis for planning and decision-making.Non-Routine Decision-making including Pricing DecisionsExplain the concept of relevant costing and relevant costs- incremental costs, opportunity costs, sunk costs. Ethical aspects of non-routine decision-making. Multi-dimensional aspects of decision-making and various criteria for evaluation of the outcome of decision-making. International studies of decision-making and focus on cultural aspects of decision-making. Explanation and illustration of the role of analytics in decision-making using relevant professional body reports. Practical examples from a wide range of sectors, but particularly from service-based industries of the use of analytics using guest lecturers. Apply relevant cost analysis to support decision-making in situations such as: make or buy; sell or process further decisions; once off- special order contracts; continue or close down decisions. Identify limiting factors in a scarce resource situation and determine the optimal production plan where an organisation is restricted by a single limiting factor, including within the context of "make" or "buy" decisions. Illustration of multiple scarce resources problem and the graphical method. Shadow price and slack resources. Pricing decisions and the factors that influence the pricing of a product or service. Explain the price elasticity of demand. Economist's approach to pricing- MC= MR rule. Cost plus approaches and target costing. Develop interpretive reports for management for various decision situations. Pricing strategies and calculation of a price from a given strategy using cost-plus and relevant cost. Pricing strategies-skimming; penetration; complementary product; product line; volume discounting; discrimination. Product life cycle and pricing.Decision-making-Risk and UncertaintyResearch techniques to reduce uncertainty- focus groups, market research. Explain the use of simulation, expected values and sensitivity analysis. Risk attitude of decision-maker and decision criteria. Apply expected values and risk analysis to decision-making problems. Apply the techniques of maximax, maximin and minimax regret to decision-making problems. Profit tables. Use of decision tables and payoff and weighted payoff. Drawing a decision tree and using it to solve a multi-stage problem. Calculate the value of perfect and imperfect information. Develop a critical awareness of the correct methods to apply from the range of decisions and uncertainty techniques.Performance Measurement and ManagementPerformance management information systems used for strategic planning, management control and operational control and decision-making. Characteristics of transaction processing systems, executive information systems and enterprise resource planning systems. Define and discuss the merits of and potential problems with open and closed systems with regards to the needs of performance management. Problems of short-termism and financial manipulation of results and suggest methods to encourage a long-term view. Divisionalisation- benefits and drawbacks. Decentralisation and Investment Centres. Appraisal of Investment centres using ROI, RI and shortcomings of these methods. Comparison of divisional performance. Methods of Transfer Pricing and distorting effects of this on performance assessment of divisions and decisions made. International divisionalised companies- performance evaluation and transfer pricing issues. Financial and non-financial key performance indicators (KPIs)- latest research and improvements required. Performance analysis in private sector organisations including manufacturing and service businesses. Performance analysis on not for profit organisations and the public sector. Value for money (VFM) issues in the public sector. Non-financial performance indicators in the public sector and NFP sector. Balanced Scorecard approach. Multi-dimensional Performance Measurement (MDPM) Models. Brignall and Ballantine - core elements to the design of any MDPM system, and design of any system requiring consideration of three interacting contingent variables- the external environment; the internal environment and business mission and strategy. External considerations in performance management, including stakeholders, market conditions and allowance for competitors. Interpret performance in the light of external considerations. From Performance Measurement to Performance Management- - Dimensions, Standards and Rewards Framework: Making MDPM work- Fitzgerald and Moon and Strategic Enterprise Management systems (Brignall and Ballantine). | |||||||||||||||||||||||||||||||||||||||||
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Indicative Reading List
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Other Resources None | |||||||||||||||||||||||||||||||||||||||||
Programme or List of Programmes
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