Course name:   Cost and Management Accounting

Course code:      PSM 2206  

Level of course:Year II Semester II

Credit units:       4 CU

Brief Course Description

The course is aimed at equipping students with basic knowledge on the costs in an organization and how these costs can be efficiently and effectively managed. The students will be equipped on general knowledge on the key principles and techniques in costing. Further exploration will be made on material costing, labour costing and overhead costing together with an introduction on costing systems and methods  

Course Objectives:

1. To expose students to the various cost accounting principles and concepts

2. To equip students with the knowledge required to generate and interpret cost data

3. To be able to cost various activities and products

Learning outcomes

By the end of this course students should be able to:

1. Explain the various cost accounting principles and concepts

2. Generate and interpret cost data

3. Cost various activities and products

Detailed Course Description (content)

Introduction to cost accounting (6 hours)

§ Meaning and scope, importance of costing,  

§ Costing basic concepts and principles

§ Cost behavior and Classification of costs

§ Costs units

Material costing and control (6 hours)

§ Classification of materials

§ Procurement of materials

§ Coding of materials and stock control techniques

§ Pricing of materials and stocktaking

§ Stores layout

Labour costs and control (6 hours)

§ Classification of labour costs

§ engagement of employees / Recruitment procedure

§ Methods of recording time or work done

§ Methods of labour remuneration

§ Payroll accounting  and management

Accounting for overhead costs (6 hours)

§ Classification of overheads

§ Allocation and apportionment of factory overheads

§ Methods of apportioning costs

§ Overhead absorption

§ Overhead control accounts

Costing techniques and systems (6 hours)

§ Activity based costing

§ Interlocking and integrated costing systems

Activity Based Costing (6 hours)

• Reasons for the development of ABC

• Steps followed in implementing ABC

• Advantages and disadvantages of ABC

• Similarities and differences between ABC and the traditional costing system

• Determining costs and prices using ABC and the traditional costing system

Costs-Volume Profit Relationships and Decision Making: (6 hours)

• Break-even analysis: Assumptions and its importance in short term decision-making;

• Break-even and tax

• Margin of safety

• Multi-product break-even

Short-term decisions (6 hours)

• Relevant costing and decision making;

• Make or buy

• Special offers

• Shut-down

• Limiting factor situations

Budget and Budgetary Control Procedures: (6 hours)

• Stages in budgeting process;

• The role of budgeting in organizational control;

• Approaches in budgeting (incremental, zero-base budgeting, activity based budgeting, etc.).

• Preparation of operating and master budgets,

• Fixed and flexible budgeting; budgetary control procedures.

Standard Costing and variance analysis:   (6 hours)

• Preparation of standard costs,

• Analysis of variance including, material cost variances, labor cost variances, overheads cost variances, mix and yield variances, total cost variances; sales variances;

Mode of delivery

• Lectures

• Group discussions

• Take-home Exercises

• Case studies

• Class discussions and presentations

Mode of assessment

• Take home Coursework 20%

.

• Test 30%

• Final Examination 50%

References

ACCA Study Text, Paper F2 (2011).Management Accounting. London: Kaplan/BPP Publishing.

ACCA Study Text, Paper F5 (2011).Performance Management. London: Kaplan/BPP Publishing.

Colin Drury (2000), Management and Cost Accounting. Chapman Hall (6thed.)

Kaplan & Atkinson (1996), Advanced Management Accounting 3rd edition

Lucey, T. (2005).Costing.6th Edition. London: Thomson.

N.Arora (1998), Cost Principles

Colin D. (2010) Management and cost accounting, 6th Ed.  Thompson Business Press, London

Kamukama, A. N.  (2006) Cost and Management Accounting; ISBN.