Latest Module Specifications
Current Academic Year 2025 - 2026
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Description The purpose of this module is to build on students' previous knowledge of management accounting and introduce them to a range of techniques and approaches that management accountants use to assist organisational decision-making. It also examines decentralised organisations and the evaluation of performance in such organisations. The module will develop students’ abilities to prepare, analyse, interpret and communicate accounting information for decision-making purposes. It will also enhance their awareness of how practice compares to theory, by examining some academic literature and the literature from the professional accountancy bodies on how the accounting and finance function in organisations is changing to support managers' information needs for decision-making and performance evaluation. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Learning Outcomes 1. Demonstrate understanding of organisational decision-making and the role of accounting (accounting information and the accountant) in that process. 2. 2. Appreciate the changes impacting on the Accounting and Finance function in organisations and implications for decision-making and performance evaluation. 3. Differentiate and apply key cost terms, concepts and classifications relevant to decision-making and utilise Cost-Volume-Profit analysis in routine decision-making scenarios. 4. Analyse information in a range of decision-making scenarios, and prepare and interpret appropriate cost and revenue information to support decision recommendations. 5. Evaluate uncertainty in decision-making scenarios and apply appropriate tools, including decision-tree analysis and probability analysis 6. Explain the implications of organisational structure for decision-making and performance evaluation and prepare and interpret relevant information to support decision-making and performance evaluation in divisional organisations. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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
Decision-making and the changing role of management accounting Dynamic organisational environment. The need for ongoing development in the role of management accounting. Factors influencing change in the Accounting and Finance function of organisations. Global Management Accounting Principles. Cost behaviour and estimating cost functions Cost behaviour classifications. Linear and non-linear cost behaviour patterns. Approaches to estimating cost functions, including statistical and non-statistical approaches (scattergraph (visual fit) method, high-low method, regression analysis). The learning curve, including the learning curve formula CVP Analysis The basic CVP model, contribution margin and contribution margin ratio. Establishing breakeven point using graphical approach and equation approach. Target profit analysis. Margin of safety and operating leverage, Multi-product scenarios. Assumptions of CVP model. Relevant Cost Analysis Relevant and irrelevant costs, incremental costs, opportunity costs, sunk costs. Preparation and interpretation of information for specific types of decisions, for example make or buy, sell or process further, continue or close down, pricing and special order decisions. Derivation of long run costs for strategic decision-making. Qualitative factors in decision-making. An introduction to current issues in decision making. Product mix decisions when capacity constraints exist Meaning of capacity constraints/limiting factors and computation of product mix decisions for single limiting factor situations, using the simple contribution per unit of the limiting factor rule. Consideration of multiple constraints and the application and preparation of information using linear programming (graphical approach only). Pricing Economists’ and accountants’ views on pricing. Cost-based pricing and market-based pricing. Target costing and pricing. Pricing policies and strategies. Uncertainty and Decision Making The role of decision models. Sensitivity, decision-tree and probability analyses. Expected monetary value and utility value. Buying perfect and imperfect information. Decentralisation and Performance Evaluation Centralisation versus decentralisation. Cost centres, profit centres and investment centres. An introduction to different measures of divisional performance, strengths and weaknesses of various measures. Behavioural issues in the application of performance measures. An introduction to the issue of transfer pricing between divisions (including relevance to international operations). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Indicative Reading List Books:
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Other Resources None | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||