UNIVERSITY OF ESWATINI

FACULTY OF COMMERCE
DEPARTMENT OF ACCOUNTING & FINANCE
Academic Year: 2021/2022

Introduction to Cost and Management Accounting Course Outline

Programme : Bachelor of Commerce degree

Course Title : Introduction to Cost and Management Accounting
Course Code : ACF 213/ IDE ACF 213
Period : November 2021 to April 2022
Lecturer : Mr. Mfundo Msibi CA (SA) ; CA(SD)
Email : nmmsibi@uniswa.sz
Contact number : 7675 1525
Office Number : 233, Faculty of Commerce Building
COURSE DESCRIPTION

This introduction course in management accounting will expose students to the course, its value
proposition and the information that is derived from a management accounting system. A
discussion on recent developments in the business environment and the information demands that
have resulted will be extensively discussed in the introductory topic. Students will appreciate the
contribution that can be made by management accountants towards the development and attainment
of strategic objectives of an organisation. A discussion on the various concepts of costs will follow
and this will be the basis for the rest of the discussions in this course. The activity based costing
system will be introduced to students and the accounting processes for a job costing system will be
demonstrated. Income effects of alternative cost accumulation systems, Joint and by-product
costing systems will conclude the discussions in this course.

LEARNING OUTCOMES

After completing this course, the student should be able to:

 Distinguish between management accounting and Financial Accounting;
 Identify and describe the elements involved in decision making, planning and control
process;
 Explain the important changes that have taken place in the business environment that have
influenced management accounting practice;
 Outline and describe the key success factors that directly affect customer satisfaction;
 Identify and describe the key success factors that directly affect customer satisfaction;
 Define the different cost objects;
 Classify costs and explain the behavior of costs;
 Estimate costs (Fixed and variable) using different techniques;
 Use Cost-Volume-Profit analysis to estimate profits;
 Identify the differences between the direct and absorption costing method;
 Identify and describe the differences between Activity Based Costing (ABC) and the
traditional method;

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  Identify those environments which are suitable for the implementation of an ABC system;
 Design and implement an ABC system with a view to costing products;
 Identify when a job costing system is appropriate;
 Record costs in a job costing system;
 Calculate the profit or loss per job;
 Draft income statements according to both direct and absorption costing method by using
different inventory valuation methods;
 Reconcile the difference between the direct and absorption costing methods’ net profit;
 Identify which method is most appropriate in different circumstances;
 Describe the uses of a process costing system;
 Differentiate between joint costs and by-product costs;
 Allocate joint costs using different methods;
 Account for the net proceeds of by products;
 Calculate the value of joint and by product inventory;
 Calculate profits from the sale of joint products;

COURSE CONTENT

1. INTRODUCTION
 Definition of accounting revisited
 Accounting information in the 21st century and implications of the 4th industrial
revolution on accounting
 Management accounting vs. Financial Accounting
 Management accounting vs. cost accounting

2. NATURE AND BEHAVIOR OF COSTS

 Cost objects, classification and behavior

 Estimation techniques and the linear equation
 Cost –volume profit analysis

3. THE ACTIVITY BASED COSTING SYSTEM

 The activity based costing (ABC) system

 ABC system design and application

4. THE JOB COSTING SYSTEM

 Accounting for material, labour and overheads under the job costing system
i) Materials
ii) Labour
iii) Overheads
 Methods of inventory valuation
i) First in First out – FIFO

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 ii) Weighted average method
 Valuing closing inventories
i) The direct costing method vs. the absorption costing method
ii) Reconciling differences between net profits

5. JOINT AND BY-PRODUCT COSTING SYSTEM

 Costing joint products
 Accounting for by-products

Implementation
The course will be delivered by a series of lectures and tutorial sessions. Students are expected to
use various materials available in the University library. Recommended reading list is available in
the library and students are encouraged to consult the relevant chapters.

Assessment
Students will be required to write assignments, tests and examination at an appropriate date and
location. The weighing of the final overall grade will be 33.33% course work and 66.67% for
examination. To achieve a pass in this course, students must achieve an overall grade of 50%.

Main Texts:

Drury C., Cost and Management Accounting, Latest Edition

Seal W., Rohde C., Garrison R. and Noreen E., Management Accounting, Latest Edition

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