SCHOOL OF BUSINESS, ECONOMICS AND MANAGEMENT

AFIN210: COST AND MANAGEMENT ACCOUNTING

Course objectives
The purpose of this course is to give students an understanding of the concepts of cost and
management accounting and how these concepts are applied in the costing of products, jobs,
batches, services and processes and in the preparation of information for decision making,
planning and control in organisations.
Learning outcomes
On successful completion of this course, students should be able to:
1. Describe the principles of cost and management accounting and explain the functions of
management and role of information in organisations
2. Explain the classifications of costs in an organisation and prepare cost reports for
management
3. Explain and present graphically cost behaviour patterns and apply the high-low method in
relation to semi-variable costs
4. Explain the materials accounting procedure, calculate inventory values and apply
techniques to manage inventory
5. Apply cost accounting techniques in accounting for labour costs and the measurement of
labour activity
6. Account for overheads using absorption costing, marginal costing and activity based costing
7. Calculate costs and prices for jobs, batches and services
8. Prepare process accounts, account for losses and abnormal gains and account for joint
products and for by products
9. Carry out cost volume profit analysis and present information for short term decision making
10. Explain the objective of budgeting and budgetary control and prepare operating budgets, the
master budget and flexible budgets
11. Explain the objectives of standard costing and calculate and analyse cost and sales
variances under both absorption costing and marginal costing
12. Explain the principles of management control and use appropriate quantitative performance
measures in a given situation

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CONTENT

Unit 1: Principles of Cost and Management Accounting

(a) Definitions of Accounts, Accounting, Cost Accounting and Management Accounting
(b) Differences between Cost and Management Accounting and Financial Accounting
(c) Functions of management in organisations
(d) Data and information and qualities of useful management information
(e) Limitations of management information
Unit 2: Cost Classification
(a) Cost, Cost unit, Cost objects and definition of cost classification
(b) Cost classification by nature, by element of cost, by function, by behaviour, for decision
making and for planning and controlling
(c) Responsibility accounting and cost reports
(d) Measuring performance of responsibility centres
Unit 3: Cost Behaviour
(a) Nature of cost behaviour
(b) Cost behaviour and activity levels and graphical presentations
(c) Dealing with semi-variable costs using the high low method with and without incorporation
inflationary effects
Unit 4: Accounting for materials
(a) Purchasing procedure and documentation
(b) Valuation of inventory using the First in First Out method, Last In First Out method,
Cumulative weighted average cost method and periodic weighted average cost method.
(c) Inventory counts
(d) Principles of inventory management
(e) Accounting entries for materials
Unit 5: Accounting for labour
(a) Nature of labour costs
(b) Labour cost accounting
(c) Payroll accounting
(d) Alternative remuneration methods
(e) Labour turnover and measuring labour activity
Unit 6: Accounting for overheads
(a) Nature and types of overheads
(b) Overheads and absorption costing
(c) Absorption costing and marginal costing
(d) Activity Based Costing
Unit 7: Job costing, Batch costing and Service Costing
(a) Features of job costing and costing and pricing jobs
(b) Features of batch costing and costing and pricing batches

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(c) Features of service costing and costing and pricing of services
Unit 8: Process Costing
(a) Nature of process costing
(b) Accounting for normal losses, abnormal losses and abnormal gains
(c) Valuation of output from a process
(d) Valuation of and accounting for closing work in progress
(e) Valuation of and accounting for opening work in progress
(f) Joint products and by products
Unit 9: Information for Decision Making
(a) Cost Volume Profit analysis
(b) Relevant costs for decision making
(c) Short term decisions: single limiting factor, make or buy, shut down decisions
(d) Pricing decisions
Unit 10: Budgeting and Budgetary Control
(a) Objectives of budgeting and budgetary control
(b) The planning and control cycle
(c) Administration of the budgetary process
(d) Preparing functional budgets and the cash budgets
(e) Participation in budgeting
(f) Alternative approaches to budgeting
(g) Preparing flexible budgets
Unit 11: Standard Costing and Variance Analysis
(a) Objective of standard costing and variance analysis
(b) Types of standards and their implications on employee motivation
(c) Setting standards
(d) Variance analysis for costs
(e) Variance analysis for sales
(f) Preparing operating statements
Unit 12: Control and performance measurement
(a) Nature of Management Control
(b) Measuring performance using quantitative performance measures

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Assessment:
Full Time:
One Test 10%
Mid semester Examination 20%
End of Semester Examination 70%
Total 100%
Part Time:
One Test 10%
Mid semester Examination 20%
End of Semester Examination 70%
Total 100%
Distance Learning
One Assignment/ Project 10%
One Test 20%
End of Semester Examination 70%
Total 100%

Recommended Texts
1. AFIN 210 – Cost and Management Accounting: Course Module
2. Lucey T: Cost Accounting: DPP (7th) edition.
3. ZICA T2 Costing Accounting Study Text, BPP, London
4. ZICA DA 5; Cost Accounting Study Text, BPP, London
5. ACCA paper MA (FMA), F2: Management Accounting, BPP, London
6. Drury C: Management and Cost Accounting (7th ) edition
7. Lucey T: Management Accounting (5th) edition [special edition]
8. Proctor R: Managerial Accounting for business decisions