Accounting for management (BA1020)

Topics covered

  • Basic idea of cost behaviour and estimation and emphasise the difference between fixed and variable costs as one approach and direct and indirect as another approach.
  • The relationships between costs, volumes and profits. 
  • Break-even chart or the more practical profit/volume graph. 
  • Looks at the effect splitting costs and profits can have on stock valuations and hence reported profits.
  • Activity based costing 
  • Placing budgets into the strategic and information control systems of the organisation.
  • The importance of marginal costing in decision making. 
  • Anticipated costs 
  • Variance analysis. 
  • How long-term investment decisions are made (investment appraisal, capital budgeting, capital investment or long-term planning.) 
  • The cost of capital, the discount rate, is the return which the investors require.
  • Performance measurement (quantitative and non-quantitative measures)
  • Return on Investment (ROI) and Residual Income (RI).
  • The Balanced Scorecard
  • Dividing up that profit between the various divisions
  • The idea of economic value added – or EVA.

Learning outcomes

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

  • Understand and apply management accounting techniques;
  • Be aware of the current developments in management accounting as they affect both manufacturing and service based industries;
  • Apply investment appraisal techniques in complex situations and be aware of the advantages and disadvantages of the different approaches;
  • Understand the role of accounting in developing strategies for the organisation;
  • Understand the role accounting data plays in the pricing decision;
  • Calculate the cost of capital for an organisation.


This module is assessed by a three hour unseen written examination.

Essential reading

  • Management and Cost Accounting. C.Drury (2012)
  • Management and Cost Accounting. A Bhimani, C.T. Horngren, S.M. Datar, M. Rajan (2011)