MANAGEMENT ACCOUNTING - 2021/2

Module code: MAN2109

Module Overview

The module introduces the basic “management accounting” techniques used by management to make certain key decisions in business. The module is focused at FHEQ Level 5 students, who will be equipped with the basic management accounting knowledge and techniques required to make key managerial decisions in business.

Module provider

Surrey Business School

Module Leader

SHI Kan (SII DUFE)

Number of Credits: 15

ECTS Credits: 7.5

Framework: FHEQ Level 5

JACs code: N411

Module cap (Maximum number of students): N/A

Module Availability

Semester 2

Prerequisites / Co-requisites

MAN1068 (Financial Accounting) is a pre-requisite for this module

Module content

Indicative content includes:


  • The basic principles of management accounting and definitions of cost;

  • Analysing semi-variable costs into their individual components;

  • The principles of variable costing and absorption costing;

  • Decision-making using variable and relevant costing;

  • Comparison of profits under absorption and variable costing;

  • Break-even analysis and decision-making strategies arising from this technique;

  • Limiting factors and how to maximise profit around a single limiting factor;

  • Business planning and cash budgeting;

  • Variance analysis for companies with more than one product


Assessment pattern

Assessment type Unit of assessment Weighting
School-timetabled exam/test 50 MIN CLASS TEST (CLOSED BOOK) 30
Examination 2 HOUR EXAM (CLOSED BOOK) 70

Alternative Assessment

Not applicable

Assessment Strategy

The assessment strategy is designed to provide students with the opportunity to demonstrate their knowledge in cost classification for a product or service, in applying management accounting techniques for effective decision making and in business planning, which includes preparation of different budgets, calculation and interpretation of variances and management reporting.  

Students’ understanding will be assessed on an ongoing basis through the weekly homework and tutorial questions set. Students will be challenged with questions when deemed appropriate and constantly encouraged to ask questions. In answering certain questions, students will sometimes be drawn into discussions either individually or in groups. Elements of self-assessment are also built into the questions for students to take ownership of their studies. This will enable the tutor to assess whether the students have achieved the required level of understanding and achieved the learning outcomes. This should ensure students are well prepared for the summative assessments.

The summative assessment for this module consists of a 50 minute class test (30% of final grade) and 2 hour final examination (70% of final grade). Both assessments are designed to test students’ ability to apply basic and advanced management accounting techniques in order to make economic managerial decisions. These are the types of decisions that students will encounter in a managerial position in business.

Formative assessment and feedback

The class test will be marked by the tutor and the most appropriate way to provide feedback to students on this assessment will be by uploading the answers on Surrey Learn as well as the marks distribution for the whole class. Some descriptive statistics and charts and general feedback on how the cohort has performed will also be included. This will allow students to see how they performed against their peers and in relation to the class as a whole.

Following the marking process, the next tutorial session will be used to provide further formative feedback by working through the class test and answering any queries. Students will have the opportunity to find out what they did not do so well, if applicable, that prevented them from achieving 100%. This feedback will help students prepare for the final examination.

Students will also have the opportunity to attempt sample exam papers, on which general formative feedback will be provided.

Module aims

  • Explain concepts and processes to determine product and service costs;
  • Explain marginal and absorption costs and their use in pricing;
  • Apply cost-volume-profit analysis and interpret the results;
  • Explain the role of budgets within organisations;
  • Prepare and interpret functional and cash budgets;
  • Appreciate methods used to evaluate performance.

Learning outcomes

Attributes Developed
1 Appreciate the basic principles behind management accounting theory. KC
2 Explain why organisations need to know how much products, processes and services cost and why they need costing systems. KCPT
3 Explain why the concept of ‘cost' needs to be qualified as direct, full or marginal in order to be meaningful KCPT
4 Appreciate the meaning of prime cost and the difference between the allocation and apportionment of overheads. KCP
5 Calculate direct, variable and full costs of products, services and activities using overhead absorption rates to trace indirect costs to cost units. KCPT
6 Calculate ‘break-even point' and make simple pricing and other decisions from the subsequent analysis. KCPT
7 Appreciate the concept of limiting factors and be able to maximise profits around a single limiting factor. KCPT
8 Prepare a simple functional and cash budget KCPT
9 Compare budgeted with actual costs and revenues and prepare variance analysis for companies with more than one product. KCPT

Attributes Developed

C - Cognitive/analytical

K - Subject knowledge

T - Transferable skills

P - Professional/Practical skills

Overall student workload

Independent Study Hours: 117

Lecture Hours: 22

Tutorial Hours: 11

Methods of Teaching / Learning

The learning and teaching strategy:

The initial focus of the module is to understand the basic principles of management accounting and the definition of cost. Weekly tutorial and homework questions should build students’ confidence to undertake the process of cost classification. Students will be able to appreciate how “cost” is dependent on the context of use and learn about the different types of costs, including direct, indirect, absorption, marginal and opportunity costs among others. As the course progresses, students will also appreciate various management accounting techniques such as break-even analysis and limiting factor analysis that can be used and how all the individual components of cost are pulled together and analysed for decision-making in a competitive environment. This will help students to understand the process and procedures required in making effective decisions.  Once this has been accomplished, students should be ready to produce business plans such as functional and cash budgets as well as calculating and interpreting variances.

The learning and teaching methods:

The learning and teaching methods include the use of weekly two-hour lectures to illustrate theories and provide examples of the practical application of such theories. Lecture materials will be supported by directed reading and weekly homework exercises. Weekly one hour tutorials will further provide students with the opportunity to apply knowledge gained during the lectures and from independent research by tackling tutorial questions set. Students will also have the opportunity to ask questions in regards to topics that have not been well understood or that need further clarification.

Surrey-Learn will be used as an information portal and will contain lecture notes, practical exercises as well as past exam papers. Model answers for the exercises and past exam paper will also be provided. General formative feedback will be given on an on-going basis and students will be encouraged to take responsibility for their own work.

Indicated Lecture Hours (which may also include seminars, tutorials, workshops and other contact time) are approximate and may include in-class tests where one or more of these are an assessment on the module. In-class tests are scheduled/organised separately to taught content and will be published on to student personal timetables, where they apply to taken modules, as soon as they are finalised by central administration. This will usually be after the initial publication of the teaching timetable for the relevant semester.

Reading list

Reading list for MANAGEMENT ACCOUNTING : http://aspire.surrey.ac.uk/modules/man2109

Please note that the information detailed within this record is accurate at the time of publishing and may be subject to change. This record contains information for the most up to date version of the programme / module for the 2021/2 academic year.