The Idea:
Why a course in management accounting?

The manager's problem in a nutshell
In order for a company to survive in a market economy it should both maintain a sufficient liquidity to meet its financial obligations and be able to reach a level of profitability which satisfies the owners' demand for return on invested capital.
It is the task of the company management to make sure that these two basic requirements are met.

Typical issues of concern
In this context issues such as the following have to be analysed:

What line of products are most profitable?

How are sales revenues affected by changed selling prices and how are costs affected by volume changes and by changes in purchase prices?

What connections are there between increased terms of credit, sales revenues and the liquidity of the company?

What are the connections between the size of capital formation and the company's profitability?

What capital investments satisfy the required profitability?

How can different fields of activity be managed and evaluated?

Knowledge provided by the course
Analysing such issues requires knowledge of the three topics covered in the course:

q Financial Accounting
dealing with basic economic concepts such as costs, revenues, assets, liabilities, stockholder equity and liquidity and the interrelations between these concepts.
q Product Costing and Capital Budgeting
dealing with cost allocation in price calculation, pooling of costs in specific decision situations and methods for evaluation of capital expenditures.
q Accounting for Cost Flows
dealing with information technology models for job-order and process accounting as well as methods for expected effects of cost distribution between different spheres of responsibility in the company.


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