Study Guide and Lecture MGT 213 Module 01

Management Accounting and Control Week 1: September 16/18, 2021 Page 2

aProf. Hanna D. Miranda-Quibot First Semester 2021-2022
Topic: Nature of Management Accounting and Control

Module 01
Study Guide and Lecture MGT 213 Module 01
Management Accounting and Control Week 1: September 16/18, 2021 Page 3
aProf. Hanna D. Miranda-Quibot First Semester 2021-2022
Topic: Nature of Management Accounting and Control

Study Guide
Let’s Begin!

In your Midyear Program in Management (Accounting Module) you learned that accounting provides information
primarily financial in nature to different users for decision making. Information provided may differ depending on
who will use, when to use it and for what purpose. Information, financial or nonfinancial must have certain
characteristics to be used by the management in the decision making.

For this week, you should be able to understand the difference between the financial accounting and managerial
accounting and the role of managerial accounting in the different aspect of management functions.

Activity
1. Read the lecture material provided below.
2. Read the following Chapters in the textbook reference for further understanding.
a. Chapter 1: Accounting as Tools for Managers (pp.11-59) of Principle of Accounting Volume 2:
Managerial Accounting, https://openstax.org/details/books/principles-managerial-accounting
b. Prologue: Managerial Accounting: An Overview (pp. 1-17) of Managerial Accounting by Garrison,
Noreen and Brewer. The e-book can be accessed upon request from the CEM Library.
3. Watch the following videos for further understanding.
a. What is Managerial Accounting? https://accountinginfocus.com/managerial-accounting-
2/introduction-managerial-accounting-2/what-is-managerial-accounting/
b. What is Management Accounting (Cost Accounting Tutorial #1)?
https://www.youtube.com/watch?v=UtIik4R1jAE
4. Answer the following study questions/practice exercises provided in this module. Such questions/exercises
will help you understand the concepts of job order costing system and how it can be used in computing product
costs.

Study Questions
Study questions are used for scaffolding learning. It is composed of : a) Comprehension questions – questions that
are designed to check the student’s knowledge and understanding of the learning resource, b) Analytical questions
– questions about the “how” and “why” and questions that highlight patterns/connections , or
contradictions/dilemmas/problems, and c) Reflection questions – questions that ask students to describe, analyze
or evaluate assumptions, beliefs, or actions. (Course Redesign 101).

Dig Deeper
Includes other resources for further study or summary on the key points discussed in the learning resources (Course
Redesign 101).

Graded Assessment
1. Answer the activity “To take masteral degree or not?” The detailed instructions are indicated under the Graded
Assessment section of this document.
2. The deadline is on September 25, 2021, 11:59 PM.
Study Guide and Lecture MGT 213 Module 01
Management Accounting and Control Week 1: September 16/18, 2021 Page 4
aProf. Hanna D. Miranda-Quibot First Semester 2021-2022
Topic: Nature of Management Accounting and Control

A. Learning Objectives

1. Define Management Accounting.

2. Identify the Three Primary Responsibilities of Management.
3. Distinguish between Financial and Managerial Accounting
4. Explain the Use of Cost Accounting Data in Decision Making.

B. CONTENTS

Management or Managerial Accounting

Management Accounting also called as Managerial Accounting and Management Services is the process that
allows decision makers to set and evaluate business goals by determining what information they need to
make a particular decision and how to analyze and communicate this information.
Objectives of Management Accounting Information (Agamata, 2019)
1. Profit measurement
2. Guide for planning
3. Standard for controlling
4. Basis for decision making

Controllership

Controllership sets the intelligent aspect of managing. As a manager, he or she is not only concerned on the
creation of wealth, but the manager must deal with the people imbued with diverse beliefs, values,
standards, orientations and belief. To perform his duties, the manager must unify his personnel’s mind and
actions to a common purpose. Their actions produce results which are gathered and measured to give
recognition and rewards, identify areas needing improvements, and to value learnings from experiences.
Clearly management is managing organizational men. The management aspect of influencing the minds of
organizational men bears scientific and intelligent processes. The manner and style of communicating
organizational standards and processes and encouraging men to conform with those standards and
prcesses relate to the behavioral aspect of management (Agamata, 2019)

Three Primary Responsibilities of Management

Planning is the process of setting goals, or what the company expects to accomplish over time,
and objectives, or the targets that need to be met in order to meet the company’s goals.
Controlling involves the monitoring of the planning objectives that were put into place. It gathers feedback
to ensure that the planned goals were attained. It involves comparing actual results against expected
results, and it can occur at the product, department, division, and company levels.
Decision Making involves selecting a course of action from competing alternatives.

Managers at all levels will participate in one or more of these responsibilities. Example: While a CEO may
spend more time in the planning process, a plant manager may spend more time on the controlling aspect,
and a line-manager may spend more of his or her time in the evaluating process.
Study Guide and Lecture MGT 213 Module 01
Management Accounting and Control Week 1: September 16/18, 2021 Page 5
aProf. Hanna D. Miranda-Quibot First Semester 2021-2022
Topic: Nature of Management Accounting and Control

Planning and Control Cycle

Management Accounting techniques in the

planning and controlling cycle (Agamata,
2019)

Responsibility Accounting
Standard costing
Variable Costing
Cost-volume-profit analysis
Short-term budgeting
Product pricing
Short-term nonroutine decisions

Source: Garrison et.al, 2010

The process is a continuous loop in many organizations. Once plans are made, they are implemented. The
controlling process starts with measuring actual performance and then comparing those results with
planned performance. Corrective action may be necessary if actual results differ significantly from the plan.
In some cases, new information may result in altering the plan before the cycle is repeated. Note that
decision making is involved in all management activities (Garrison, et al., 2010)

Comparison of Financial and Managerial Accounting

Source: Comparing Reports between Financial and Managerial Accounting. (attribution: Copyright Rice University, OpenStax, under CC-BY-NC-SA 4.0
license)
Study Guide and Lecture MGT 213 Module 01
Management Accounting and Control Week 1: September 16/18, 2021 Page 6
aProf. Hanna D. Miranda-Quibot First Semester 2021-2022
Topic: Nature of Management Accounting and Control

Trends in Today’s Business Environment and Analyze Their Impact on Accounting

• Enterprise Resource Planning (ERP) helps companies streamline their operations and helps
management respond quickly to change. Although they are expensive, these systems help alleviate the
complications that arise from business systems that do not coordinate with one another.
• Automation is a method of using systems, such as computers or robots, to operate different processes
and machinery to improve efficiencies and lower direct labor costs. Companies use automation to
remove the complex, superfluous stages from a process in order to streamline the practice.
• Outsourcing is hiring workers outside of the company who perform their tasks inside or outside of the
country.
C. DIG DEEPER / POINTS TO REMEMBER!

The main purpose of management accounting is to supply financial and nonfinancial information to the
internal users for decision making. Information must be relevant and timely because such information
will be used by the management in deciding what should be their next steps for the company’s future.
Therefore, a managerial accountant must understand not only how to generate financial information
but he or she must also know each detail on how the company operates.

But as we all know, accounting is not only applied to a business setting, we can also use it in our
personal daily lives. Read this article “ Why is Accounting Important in Everyday Life” through this link:
https://www.ecpi.edu/blog/why-is-accounting-important-in-everyday-life and think how managerial
accounting can be applied in your daily life? With this, you can easily understand how accounting
particularly managerial accounting works.

D. STUDY QUESTIONS AND PRACTICE EXERCISES

Comprehension Questions:

1. What is the purpose of Management Accounting?

2. What are the key differences between the Financial Accounting and Management/Managerial
Accounting?

Analytical Questions:

1. How managerial accountants help managers plan, control, and evaluate?

2. How can you relate and use managerial accounting in different careers?

E. GRADED ASSESSMENT

Overview of the Activity

For this week, the class will be using a video discussion platform in sharing each other’s answer in the
situation given below. Video recording will help students to self-assess and reflect on how he or she
understands the topic and express it through storytelling. Moreover, it will also motivate students to
strengthen their speaking skills and identify their areas for improvement.

The principal purpose of managerial accounting is to deliver information useful for management decision-
making. Many of the techniques used in managerial accounting are useful for decisions in your everyday
life. In choosing whether to pursue a master's degree or not, how will you use planning, controlling, and
evaluating in your decision-making process? What types of financial and non-financial information you
might need?
Study Guide and Lecture MGT 213 Module 01
Management Accounting and Control Week 1: September 16/18, 2021 Page 7
aProf. Hanna D. Miranda-Quibot First Semester 2021-2022
Topic: Nature of Management Accounting and Control

Instructions
1. For this activity, each student will create a 5 to 10-minute video.
2. Answer the question(s) above.
3. In deciding, consider the financial and non-financial information in your planning, controlling, and
decision-making process.
4. You may use the following table to summarize your answers before making the video. You can even
include the table in your video using the whiteboard button in the video.

Planning Controlling Evaluating

Financial Information Non-financial Information

B. Once finished with the video, save it in your Google Drive and post the link to Canvas. Each student is
expected to interact with each other that is why, commenting to other’s video is highly recommended.
C. Deadline of posting/submission will be on September 25, 2021, 11:59 PM.

Grading

The output of this activity will be graded as part of your Problem Set I. The total score is 40 you will be
graded based on the following metrics:

Attributes 10 points 8 points 6 points 4 points 2 points

Accounting Concepts Especially skillful Clear and Accurate but Limited grasp of Inaccurate use of
identification and competent use of limited use of accounting accounting
analysis of accounting accounting concepts concepts
accounting concepts concepts concepts
Assertions Fully developed Developed and Assertions exist but Assertions exist Lack of
and supported supported are not developed but are not assertions,
assertions assertions or supported developed or development
adequately supported and/or support
accurately
Structure Particularly clear Consistent focus Paragraph flow Weak paragraph Lack of focus
ideas with logical and good and transitions structure and
transitions transitions are adequate illogical transitions
throughout
Language Language especially Free of errors in Minor errors Fundamental Serious errors in
clear and concise mechanics. Clear in mechanics errors. mechanics. Lack
with flawless and concise mechanics. Lack of clarity and on clarity and
mechanics. language Sentences could concision concision.
be more effective
Source: http://assessment.uncg.edu/rubrics/accounting.pdf

E. REFERENCES

Textbook

Agamata, F. (2019). Management Accounting Environment. In Management Services (pp. 33-54). GIC
Enterprises & Co., Inc.
Study Guide and Lecture MGT 213 Module 01
Management Accounting and Control Week 1: September 16/18, 2021 Page 8
aProf. Hanna D. Miranda-Quibot First Semester 2021-2022
Topic: Nature of Management Accounting and Control

Franklin, M., Graybeal, P., & Cooper, D. (2019). Accounting as Tool for Managers. In Principles of
Accounting Volume 2: Managerial Accounting (pp. 11-59). OpenStax.
https://openstax.org/details/books/principles-managerial-accounting
Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2018). Managerial Accounting: An Overview. In Managerial
Accounting (pp. 1-17). McGraw-Hill Education.

Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2013, 2010). Managerial Accounting: An Overview.
In Introduction to Managerial Accounting (pp. 1-18). McGraw-Hill Education.

Internet resources

What is Managerial Accounting. Retrieved from: https://accountinginfocus.com/managerial-accounting-

2/introduction-managerial-accounting-2/what-is-managerial-accounting/
What is Management Accounting (Cost Accounting Tutorial #1)? Retrieved from:
https://www.youtube.com/watch?v=UtIik4R1jAE