Advanced Management Accounting Course

• The difference between management accounting and financial accounting.
• The difference between fixed and variable costs.
• How to calculate variable and fixed costs using the high-low method.
• How to use break-even analysis as a decision-making tool.
• How to calculate and understand contribution, the break-even point, and margin of safety.
• The limitations of break-even analysis.
• Why overheads need to be included when costing products.
• How to calculate a simple ‘blanket’ overhead rate.
• How to apply absorption costing methods to fully cost out a range of products.
• The limitations of traditional costing methods.
• How to calculate a simply activity-based cost.
• Why a business needs to prepare a budget.
• The process of preparing a budget.
• How to prepare a simple budget.
• The problems of budgeting.
• The purpose of simple variance analysis.
• How various methods of costing can impact pricing?
• How to calculate prices using cost-plus, sales-margin, and discount methods.

CONTENT

Cost and Break-even Analysis

• Fixed and variable costs
• Contribution
• Break-even analysis
• The margin of safety
• Interpreting break-even analysis
• Assumptions underlying break-even analysis

Absorption and Activity-based Costing

• Direct and indirect costs
• Absorption costing
• Calculating a blanket rate
• Over and under recovery
• Calculating a department rate to fully cost the product
• Activity-based costing

Budgeting

• The advantages of budgets
• The process of budgeting
• Preparation of a budget
• Problems of budgeting
• Budgets to monitor performance and flexible budgeting
• Variance analysis

Pricing and Costs

• Using cost information to price your product
• Discounts and distribution margins
• Choosing the appropriate costing method
• Pricing and product strategy
• Optimum pricing
• Target costing
• Life-cycle costing
• Transfer pricing

Short-term Decision Making

• What are relevant revenues and costs?
• Make or buy decisions
• Limiting factors
• Upgrading equipment
• Closure of sites or discontinuing products

Investment Appraisal Techniques

• Accounting rate of return
• Payback period
• Net present value
• Discounting to present value
• Internal rate of return

Measuring and Reporting Performance

• Performance measurement: strategy and objectives
• Financial and non-financial performance measurement
• Key performance measures
• Benchmarking
• The balanced scorecard
• Customer profitability analysis
• Integrated reporting
• Environment accounting and carbon reporting
• Corporate governance
• Ethics

TRAINING METHODOLOGY

The training methodology combines lectures, discussions, group exercises and illustrations. Participants will gain both theoretical and practical knowledge of the topics. The emphasis is on the practical application of the topics and as a result participant will go back to the workplace with both the ability and the confidence to apply the techniques learned to their duties.