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Module Specifications

Archived Version 2004 - 2005

Module Title Management Accounting - Decision Making
Module Code AC320
School DCUBS

Online Module Resources

Module Co-ordinatorProf Barbara FloodOffice NumberQ107
Level 3 Credit Rating 5
Pre-requisite AC121, AC215, CA234, CA235
Co-requisite None
Module Aims
* To develop an understanding of the role of accounting information in the decision-making processes of an organisation. * To develop an ability to prepare, interpret and communicate accounting information for decision-making purposes. * To develop an understanding of the implications of organisational structure for the decision-making process and for evaluating the outcomes of decisions.

Learning Outcomes
On successful completion of this module, students will: * Understand the decision-making process and the role of accounting information in that process. * Be capable of analysing relatively unstructured information in a variety of decision-making situations and of preparing and interpreting relevant information to support the decision-making process. * Understand the implications of organisational structure for decision making and be capable of preparing relevant information to reflect organisational and reporting structures.

Indicative Time Allowances
Lectures 24
Tutorials 10
Laboratories 0
Seminars 0
Independent Learning Time 41

Total 75
Assume that a 5 credit module load represents approximately 75 hours' work, which includes all teaching, in-course assignments, laboratory work or other specialised training and an estimated private learning time associated with the module.

Indicative Syllabus
* Cost Behaviour: Importance for decision making. Linear and non-linear cost behaviour patterns. Approaches to estimating cost functions, including statistical and non-statistical approaches. The learning curve, including the learning curve formula. * Decision Making in its Organisational Context: Models of the decision-making process. The role of accounting information in the decision-making process. Types of decisions in manufacturing, service and not-for-profit organisations. * Relevant Cost Analysis: Relevant and irrelevant costs, opportunity costs, sunk costs. Marginal costing in the management decision process. Preparation and interpretation of information for specific types of decisions. Limiting factors and the application of linear programming, preparation of information using the graphical approach, interpretation of information using the simplex approach. Theory of constraints. External pricing strategies and decisions: cost-based, market-based, special orders. Qualitative factors in decision making. * 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: Reasons for decentralisation. Cost centres, profit centres and investment centres. Measurement of divisional performance, strengths and weaknesses of various measures. Transfer pricing, principles, alternative systems, role of accounting information. International transfer pricing.
Continuous Assessment0% Examination Weight100%
Indicative Reading List
Garrison, RH, Noreen, EW and Seal, W, Management Accounting, McGraw-Hill, 2003 Drury, C, Management and Cost Accounting, Thomson, 2000 Horngren, CT, Foster, G and Datar, S, Cost Accounting: A Managerial Emphasis, Prentice Hall, 2003 Blocher, EJ, Chen, KH and Lin, TW, Cost Management. A Strategic Emphasis, Prentice Hall, 2002 Johnson, HT and Kaplan, RS, Relevance Lost. The Rise and Fall of Management Accounting, HBS Press, 1987 Drury, C, Management Accounting for Business Decisions, Thomson, 1997 Kaplan, RS and Atkinson, AA, Advanced Management Accounting, Prentice Hall, 1998 Ezzamel, M and Hart, H, Advanced Management Accounting: An Organisational Emphasis, Cassell, 1987 Burch, JG, Cost and Management Accounting: A Modern Approach, West, 1994 Hirsch, ML, Advanced Management Accounting, Thomson, 2000 Relevant journal articles
Programme or List of Programmes
AFBA in Accounting & Finance