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Module Specifications

Archived Version 2008 - 2009

Module Title	Management Accounting - Decision Making
Module Code	AC320
School	DCUBS
Online Module Resources
Module Co-ordinator	Dr Ruth Mattimoe	Office Number	Q238
Level	3	Credit Rating	5
Pre-requisite	None
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
	Hours
Lectures	24
Tutorials	10
Laboratories	0
Seminars	0
Independent Learning Time	41

Total	75
Placements
Assignments

NOTE

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

Decision Making in the 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.

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.

Relevant Cost Analysis: Relevant and irrelevant costs, opportunity costs, sunk costs. Marginal costing in the mananagement decision process. 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. Application and preparation of information using linear programming (graphical approach only).

Pricing: External pricing strategies and decisions: cost-based, market-based, special orders.

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- including behavioural issues in the application of performance measures. An introduction to measurement of divisional performance, strengths and weaknesses of various measures. An introduction to the issue of transfer pricing (including relevance to international operations).

Assessment
Continuous Assessment	20%	Examination Weight	80%

Indicative Reading List

Garrison, RH, Noreen, EW and Seal, W, Management Accounting, McGraw-Hill, 2006

Drury, C, Management and Cost Accounting, Thomson, 2007

Horngren, CT, Foster, G and Datar, S, Cost Accounting: A Managerial Emphasis, Prentice Hall, 2007

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, 2006

Programme or List of Programmes

BA in Accounting & Finance

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