Dr. Thomas Wu

This module extends the knowledge of accounting by introducing the tools commonly used in managerial accounting and demonstrating their application in a management decision making context.

The main aim of the unit is to enable students to understand how relevant accounting information can be harnessed to assist management decisions. This will involve students identifying relevant factors, performing complex analyses and providing comprehensive advice to management for decision purposes.

1. To develop the Management Accounting skills acquired at Level 1 Business Core Integrated Programme (BSS00-1) to a higher level by the introduction of new techniques and scenarios.
2. To develop the skills necessary to collect, analyse, prepare and present information necessary for planning, decision making and control in an organisation.
3. To introduce the techniques necessary for analysis of data and to enable the selection of appropriate techniques for particular problems.
4. To enable the appreciation of the strengths and weaknesses of particular techniques.

Utilise the cost of a cost object for a range of purposes using data from different cost and management accounting systems.
- Identify the problems associated with material cost attribution and apply material cost data for the purposes of stock valuation.
- Identify data appropriate for labour cost attribution and calculate the labour cost of a product or service.
- From given data collect, allocated, apportion and absorb the cost of overheads for a unit of activity.
- Analyse the uses of culculated costs of the above cost elements.
- Compare and contrast the results of absorption and marginal costing systems, for products and processes.

Analyse relevant data to enable short term business decisions to be made and evaluate and recommend strategies to deal with the sensitivity of the data.
- Collect together and analyse the differences between fixed and variable costs.
- Use an interpretation of fixed and variable cost to assess a product or service break even point.
- Recommend strategies to improve profitability using fixed and variable cost data.
- Recognise the sensitivity to change of the various elements of a financial model.
- Assess relevant and opportunity costs
- Assess the impact of capacity constraints.
- Select, apply and interpret a range of optimization techniques in order assist efficiency decisions in organisations.

Design and utilise budgets which enable control by feedback, recognising the behavioural implications of control.
- Prepare profit budgets from givn data.
- Use budget information to make planing decisions.
- Evaluate the contribution to good management of the budgeting process.
- Analyse the effect on behaviour of the budgeting process.
- Evaluate alternatives to the budgeting process.

Analyse and interpret variance analysis data for the control of organisations.
- Compute and interpret variances for materials, labout and over head costs.
- Analyse the effect of profitability of a range of variances.
- Evaluate the inter-relatonship of variances.
- Compute and assess the role of planning and operational variances.

Establish an Activity Based Costing system which enables cause and effect allocations.
- Assess the role of ABC in resource allocation.
- Apply ABC techniques to resource allocation problems and cases.
- Interpret ABC information to enable efficiency improvements to organisations.

Measure company performance using financial and non-financial indicators.
- Apply and interpret financial indicators to divisionalised organisations.
- Assess the ethical challenges implicit in financial indicators.
- Develop, apply and interpret a Balanced Scorecard for an organisation.

There are six lecture hours and a two tutorial hour per week. Students are required to attend all lectures and tutorials. Students are expected to read the assigned reading materials (or chapters) prior to the lecture and complete their assignments before the tutorials.

In the tutorials, discussions will be based on the topics related to the materials in the preceding lectures and will be in the form of problem discussions.

For this course, a general purpose non-financial calculator can be used. Students who do not have ready access to a financial calculator should be able to perform all the required analysis and calculations using a general purpose non-financial calculator for the tutorials, assignments, mid-term test, and final examination.

You can also use a non-programmable financial calculator for the tutorials, assignment, mid-term test, and final examination. Common financial calculators are HP12c and TI BAII PLUS. User manual in simplified chinese and a tutorial for the HP12c can be found here and a simple tutorial for the HP12c can be found here. User manual for the TI BAII can be found here.

Regardless of the types of calculators used for this course, students are responsible for their own equipment and they cannot be shared in a quiz, test, or examination situation. As a result, students MUST bring their own calculators to each class. In addition, each student must be proficient in the use of their own equipment.

Electronic translators CANNOT be used for quiz, test, or examination situations, but they can be used during class (only with volume off) and your own study time.

There are specific terms that apply to accounting and finance, and there are various online sources that can help students understand these terms.

Download and print for reference:

• Hong Kong Exchange glossary of terms (English to Chinese)
• 88translation.com finance dictionary (Chinese to English, English to Chinese)

Online finance dictionaries:

• Reuters Chinese to English and English to Chinese finance dictionary
• Goldman Sachs English to Chinese finance dictionary
• Goldman Sachs Chinese to English finance dictionary
• Morgan Stanley English to Chinese finance dictionary

Other unverified sources of financial references:

• Finance Street - a finance related site prepared by the government
• Financial glossary of terms
• List of dictionaries