MANAGEMENT AND COST ACCOUNTING

M1 Core Courses

Management control is essentially about planning and decision-making. Navigating through complex organizational decision scenarios requires managers and executives to apply a variety of economic and strategic analyses, in particular concerning the cost and profitability of products, clients and activities.

This course aims to develop students’ capacity to select and structure management accounting information necessary to evaluate alternative courses of action. It is particularly designed to enable students to translate typical management situations into accounting terms by applying costing techniques and reasoning methods that can be mobilized for particular management decisions.

Specifically, the course covers different types of costs, different methods of cost analysis and their relevance to decision-making.

Course objectives

The course learning objectives are as follows:

Know how to identify the techniques, methods and reasoning adapted to a management situation or to make a specific managerial decision;
Master the different techniques and methods to calculate costs and measure profitability in the organization;
Develop an understanding of information usefulness in a variety of organizational contexts across hierarchies.

This course covers the most basic ‘toolbox’ for management accounting which students will also need to apply in subsequent management accounting courses, such as Business Performance Management. It is, therefore, useful for every student, irrespective of their professional goal, because the business techniques, tools and methods studied are used in most of organizations (Industry, Services, Non-Governmental Organizations, Cultural Enterprises, etc.). The course further complements the methods and approaches of the Financial Accounting course by turning attention to the internal dimension of decision-making.

Course content

Types of costs: fixed/variable costs, direct/indirect costs, opportunity costs, relevant costs, costs incurred;
Cost-volume-profit relationships and breakeven analysis;
Decisions based on contribution margin: special orders, product-mix, outsourcing; contribution per unit of scarce resource, discontinuation decisions;
Full cost calculation methods, with and without stock: 2-step allocation method, ABC method;
Discounted cash flow methods and long-term capital investment decisions;
Management accounting for start-ups: Profitability of products /markets /activities / customers; launch decisions;
Accounting for Customer Profitability: cost and value analyses;
Management accounting in action: The organizational and behavioural context of management accounting.