UNIVERSITY OF NAIROBI

SCHOOL OF BUSINESS
DEPARTMENT OF FINANCE AND ACCOUNTING
MOMBASA CAMPUS
DAC 211: PRINCIPLES OF MANAGEMENT ACCOUNTING
COURSE OUTLINE INSTRUCTOR: DR. F. OGILO
Pre-requisite – DAC 102 FUNDAMENTALS OF FINANCIAL ACCOUNTING II

OBJECTIVE OF THE COURSE

This course is meant to develop students understanding of the use of accounting information for
internal management purposes. Emphasis will be put on the use of accounting data for planning
and control.

COOURSE CONTENT
1. NATURE AND PURPOSE OF MANAGEMENT ACCOUNTING
 Definitions
 Role of Management Accounting in management process
 Decision making process
 Cost concepts and classification
2. COST ESTIMATION AND FORECASTING
 Steps in estimating cost functions
 Methods of estimation
 Evaluation of cost functions
3. ACCOUNTING FOR OVERHEADS
 Overhead costing
 Classification of overheads
 Allocation and apportionment of overheads
 Re-apportionment of overheads
 Overhead absorption
4. COST VOLUME PROFIT ANALYSIS
 Simple CVP analysis
 CVP in multi-product environment
 Introduction to CVP under uncertainty
5. RELEVANT INFORMATION FOR DECISION MAKING
 Concept of cost relevance to decision making
 Quantitative and qualitative factors in decision making
 Limiting factors in decision making
 Pricing and other non-routine decisions.
CONTINUOUS ASSESSMENT TEST ONE
6. MARGINAL AND ABSORPTION COSTING

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  Overhead absorption
 Absorption vs. marginal costing
 Activity based costing
7. METHODS OF PRODUCT COSTING
 Inputs to product costing
 Job order costing
 Process costing
8. BUDGETING
 Rationale and role of budgeting
 Types of budgets and their features
 Budget construction
9. VARIANCE ANALYSIS
 Standard costs and flexible budgets
 Basic variance analysis
 Investigating variances.
CONTINUOUS ASSESSMENT TEST TWO

METHODOLOGY AND EVALUATION

This course will involve lectures and class discussions. Students are strongly advised to read the
relevant text materials before class discussions. Students are also advised to do a lot of practice
on the application of concepts to problem solutions.

Students will be evaluated as follows:

Quizzes 10%
CATS (2 in number) 20%
Final examination 70%
100%

READING MATERIALS
COURSE TEXT
Horngren, Sundem, Straton, Burgstahler & Schartberg; Introduction to Management
Accounting, 14th edition, Thompson Learning, Prentice Hall, 2008.

Other reading materials

1. Arkinson A., Kaplan, R. (2008). Management Accounting, 5th edition, Pearson-Prentice
Hall.
2. Blocher E., Chen, K. (2005). Cost management: A strategic Emphasis, 3rd edition, Mc
Graw Hill Irwin.
3. Garrison, R., Noreen, E., Brewer, P. (2011). Managerial Accounting, 13th edition, Mc
Graw Hill Irwin.

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4. Hilton, R. (2008). Managerial Accounting: creating Value in A dynamic environment, 8th
edition Mc Graw Hill.