Unit information: Strategic Management Accounting in 2018/19

Unit name	Strategic Management Accounting
Unit code	ECONM2024
Credit points	15
Level of study	M/7
Teaching block(s)	Teaching Block 2 (weeks 13 - 24)
Unit director	Dr. Lyne
Open unit status	Not open
Pre-requisites	None
Co-requisites	None
School/department	School of Accounting and Finance - Business School
Faculty	Faculty of Social Sciences and Law

Description including Unit Aims

To enable students to develop a good understanding of strategic decision making, and control of strategic business units. The unit will adopt a managerial user-perspective (not an accountant preparer-perspective). Key traditional issues relating to control will be examined, including budgets and standard costs. Various contemporary managerial techniques will be explored, such as, activity-based techniques, target costing, balanced scorecard and EVA. Through the use of exercises and case-studies the ability to analyse business issues and problems will be developed.

Intended Learning Outcomes

1. To be able to develop product and service costs using both traditional costing methods and using activity based costing (ABC); and to criticise these methods.
2. To be able to demonstrate how the ABC concept can be used for management of a business (ABM).
3. To be able to calculate traditional variances for control, discuss the resulting financial statements and criticise traditional methods in the light of the new manufacturing environment.
4. To calculate prices using a variety of approaches and be able to critique these approaches
5. To demonstrate knowledge of financial and non-financial performance measures for business units and their strengths and weaknesses, including Balanced Scorecard
6. To be able to calculate financial metrics such as return on investment and economic value added and understand their implications for management behaviour.
7. To be able to derive transfer prices using both accounting and economic methods and discuss the strengths and weaknesses of these in the context of business unit decision-making, control and evaluation.

Teaching Information

Nine weekly two-hour lectures and five small group tutorial classes. For the student: 18 hours lectures, 5 hours tutorial classes, plus two revision sessions

Assessment Information

Three-hour written examination (100%) incorporating:

• a section of multiple choice questions;
• one question based on a case study;
• two ‘essay-style’ questions that test understanding of key concepts.

A three hour exam in the form described above assesses ILOs 1-7.

- The technical elements are tested primarily though the MCQ section; this also tested breadth of knowledge. ILOs 1-4, 6 and 7 - The case question tests ability to apply knowledge not simply repeat. ILOs 1, 3-7 - the ‘essay-style’ questions assess ability to discuss wider issues; show understanding of critiques of techniques; and demonstrate a knowledge of the implications of the techniques and approaches. ILOs 1-7

Formative assessment

Classes are based on exercises that enable students to be proficient in the calculations required in some subjects, and case studies that enable students to learn from real-life applications of techniques. Each student is required to submit an answer to one of the cases; this will be marked and returned with feedback. The formative assessment will test ILOs 1-7.

Reading and References

The course text is: ‘Management Accounting for Business’ 6^th ed by Colin Drury, Cengage Learning, 2016

Other reading includes:

‘Advanced Management Accounting’, R. Kaplan and A. Atkinson, Pearson, 2013

‘Cost and Effect:…’, R. Cooper and R. Kaplan, Harvard Business Press, 1998

‘The Strategy-Focused Organization’, R. Kaplan & D. Norton, Harvard Business Press, 2001.

Harvard Business Review papers for activity-based costing and the balanced scorecard, including:

Cooper R and Kaplan R S (1988) 'Measure costs right: make the right decisions', Harvard Business Review, Sep-Oct

Kaplan, R & D Norton, (1993), ‘Putting the Balanced Scorecard to Work’, Harvard Business Review, Sept-Oct.