22321 Cost Management Systems

Subject level: Undergraduate

Handbook description

This subject introduces the basic concepts underlying management accounting with a particular emphasis on current developments. It introduces appropriate cost management concepts, techniques and skills such as cost planning, cost behaviour, cost estimation, and cost accumulation and allocation systems (job, process and activity-based costing). It emphasises using accounting information to understand and make decisions about the management of the cost structure of an organisation.

Subject objectives/outcomes

On successful completion of this subject students should be able to:

1. critically understand the role of management accounting in modern organisations
2. appreciate both historical and contemporary views of how management accounting creates value for organisations
3. understand cost accounting techniques in relation to cost management with major emphasis on the role of allocations in costing
4. critically apply knowledge of product costing and budgeting systems and associated technique.

Contribution to graduate profile

This subject introduces students to the basic concepts underlying Management Accounting, which is one of the core streams in the study of accounting. It provides an in-depth understanding of appropriate cost management concepts with an emphasis on the use of accounting information to understand and make decisions about the management of the cost structure of organisations. Students will acquire a set of concepts, skills and techniques that are necessary for potential managers with particular appreciation of the various issues and challenges faced by managers within organisations.

Teaching and learning strategies

The subject is taught in a large one-hour lecture and smaller two-hour tutorials every week. The lectures introduce the structure of the particular topic area and some practical examples. The tutorials discuss lecture topics from the previous week in detail to ensure a thorough understanding the subject content. Students are therefore given a week to reflect over the information from the lectures to be discussed in tutorials. Moreover, students are required to attempt selected questions under the supervision of a tutor. This method of teaching enables students to clarify any doubts with regards to topic covered in a timely fashion.

Content

• Introduction to management accounting
• Cost behaviour, cost drivers and cost estimation
• Cost – volume – profit analysis
• Product costing systems
• Process and operation costing and service costing
• Overhead costing using activity based costing and standard costing systems
• Pricing decisions and relevant costing.

Assessment

Assessment item 1: Class Tests (Individual)

Assessment item 2: Mid–Semester Examination (Individual)

Assessment item 3: Formal Final Examination (Individual)

Required text(s)

Langfield-Smith, K, Thorne, H, and Hilton, RW, 2009, Management Accounting: Information for Managing and Creating Value, 5th edn, McGraw-Hill Australia

Indicative references

Atkinson, A., Banker, R., Kaplan, R. and Young, S. (1997). Management Accounting (2nd ed.). Englewood Cliffs, N.J.: Prentice-Hall International.

Eldenburg, L. G. and Wolcott, S. K. (2005). Cost Management: Measuring, Monitoring, and Motivating Performance (Management Accounting). Hoboken, NJ, John Wiley & Sons

Hilton, R. W., Maher, M. W. and Selto, F. (2007). Cost Management: Strategies for Business Decisions (4th ed.). New York, McGraw Hill

Horngren, C. T., Foster, G. and Datar, S. M. (2000). Cost Accounting: A Managerial Emphasis. (International 10th Ed.) Englewood Cliffs, N.J. Prentice-Hall International

Kaplan, R. S. and Cooper, R. (1997). Cost & Effect: Using Integrated Cost Systems to Drive Profitability and Performance. Harvard Business School Press

Rayburn, G. L. (1996). Cost Accounting: Using a Cost Management Approach (6th ed.). Homewood, Ill.: Irwin.

Online text resources

The Langfield-Smith et al. textbook comes with a host of online resources, including extra material, real-world case examples, additional problems and online tests. Access to these resources is included with your Langfield-Smith et al. textbook. The website is: www.mhhe.com/au/langfield5e