Registry

Module Specifications

Archived Version 2019 - 2020

Module Title	Management Accounting - Decision Making
Module Code	AC320
School	DCUBS
Online Module Resources
Module Co-ordinator	Dr Ruth Mattimoe	Office Number	Q238
NFQ level	8	Credit Rating	5
Pre-requisite	None
Co-requisite	None
Compatibles	None
Incompatibles	None

Description

The purpose of this module is to build on students' previous knowledge of management accounting and introduce them to the techniques that management accountants use to assist managers in their decision-making tasks. It also looks at decentralised organisations and the evaluation of performance in these firms. Using lectures and tutorials and up-to-date professional material, such as CIMA reports, it will develop in students the ability to prepare, interpret and communicate accounting information for decision-making purposes. They also will have an awareness of how practice compares to theory, by reading the literature from the professional accountancy bodies on how the finance function is changing to support managers' information needs, for decision-making and performance evaluation.

Learning Outcomes

1. Interpret the nature of costs and cost behaviour.
2. Explain the main models of decision-making under conditions of certainty and uncertainty.
3. Apply principles of relevant costing and various calculative techniques to analyse decision situations.
4. Evaluate the various possible outcomes to decision situations and make recommendations to management.
5. Construct and interpret linear programming solutions by the graphical method for decisions involving scarce resources.
6. Compute and appraise the return on investment, residual income and economic value added performance measures to evaluate the performance of divisionalised companies and divisional management.
7. Describe inter-divisional transfers and apply simple transfer pricing rules.
8. Critique various topics on the course using professional and academic literature.

*Type*	*Hours*	*Description*
Workload	Full-time hours per semester
Lecture	24	2 lectures every week for 11 weeks plus reading week of private study
Independent Study	24	Preparation for tutorials- trying questions beforehand, checking solution afterwards
Independent Study	20	Reading for lectures and trying lecture questions from pack- before and after the lecture
Tutorial	8	8 tutorials ( one session each week) in total starting in Week 4 and finishing in Week 12
Directed learning	49	Direct preparation for and completion of end of semester examination
Total Workload: 125

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

Indicative Content and Learning Activities

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 Breakdown
Continuous Assessment	0%	Examination Weight	100%

Type	Description	% of total	Assessment Date
Course Work Breakdown

Reassessment Requirement
Resit arrangements are explained by the following categories; 1 = A resit is available for all components of the module 2 = No resit is available for 100% continuous assessment module 3 = No resit is available for the continuous assessment component
Unavailable

Indicative Reading List

Burns, J.E., Quinn, M., Oliveira, J. Warren, L.: 2013, Management Accounting, 1st, McGraw Hill, London,
Drury, Colin: 2015, Management and Cost Accounting, 9th, South-Western Cengage Learning, London, 978-1-84480-566-2

Other Resources

None

Programme or List of Programmes

AF	BA in Accounting and Finance
BSSA	Study Abroad (DCU Business School)
BSSAO	Study Abroad (DCU Business School)

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