Management accounting AC2097

This course is designed to provide students with knowledge and skills enabling them to design appropriate management accounting reports providing information for operational and strategic decision making, planning, control and performance measurement, largely in a business context.

Prerequisite / Exemptions

If taken as part of a BSc degree, the following course must be passed before this course may be attempted:

  • AC1025 Principles of accounting

Topics covered

  • Management accounting and its strategic context
  • Full absorption costing methods
  • Inventory and process costing and capacity management
  • Activity Based Costing (ABC)
  • Activity Based Management (ABM)
  • Cost volume profit analysis
  • Application of cost volume profit analysis
  • Relevant information in decision making
  • Decision making with constraint and uncertainty
  • Theory and practice of pricing
  • Target costing, value engineering and customer profitability analysis
  •  Long-term decision making, capital budgeting and life cycle budgeting and costing
  • Strategic Budgeting and control
  • Variance analysis - further issues
  • Divisional performance measurement systems
  • Transfer pricing and its effect on performance management systems
  • Strategic performance management – the use of non-financial performance measures
  • Cost management and environmental accounting
  • Future trends in strategic management accounting

Learning outcomes

If you complete the course successfully, you should be able to:

  • discuss the changing role of management accounting
  • critically evaluate the uses of management accounting information for strategic decision making in various business contexts
  • select, devise and apply different types of cost and revenue analysis and explain their different roles for supporting operational and strategic managerial decisions
  • design and prepare budgets and explain their use in planning and control
  • design and use variances to support feedback, analysis and control
  • identify and discuss different methods of investment appraisal
  • discuss various approaches to performance measurement and control in various types of organisations, and devise and evaluate indicators of performance
  • relate the use of management accounting information to the expanding availability of data and global reach through the use of IT and the internet.


Unseen written exam (3 hrs 15)

Essential reading

  • Bhimani, A. et al. Management and cost accounting.  (Pearson, 2019) 7th edition [ISBN 9781292232669]

Course information sheets

Download the course information sheets from the LSE website.