APPLIES TO ACADEMIC YEAR 2014/2015

BØK 1113 Managerial Accounting

Responsible for the course
Rolf Gunnar Strand, Knut Larsen

Department
Department of Accounting - Auditing and Law

Term
According to study plan

ECTS Credits
7,5

Language of instruction
Norwegian

Introduction
The essence of business economics includes financial management (=income and cost analysis, managerial accounting, budgeting and control), finance (=investment and financing), financial accounting and financial statement analysis.

The aim of this first course within the field of business economics is to provide the students with essential basic knowledge and skills, so that they can take part in discussions on problems in business economics and carry out simple analyses within the field, make correct decisions and communicate the results of the analyses in a comprehensible manner.

This course in Managerial Accounting starts with investment analysis. By studying the main activities carried out in a company as an investment project spanning several periods, emphasis is placed on the necessity of considering all economic effects of the project and of taking a long-term perspective (over several years, until the project is completed).

After studying the overall perspective given by finance, the course discusses individual problems that provide more detailed knowledge on, and understanding of vital aspects for more short-term financial management and control. This is a practical approach to business economics, since it is easier to understand the various sub-themes of the field when you know why they are discussed and what part they play in the total picture.

Learning outcome
Acquired knowledge
After taking the course, the students shall be able to explain key concepts and give an account of the tools used in analyses of business economics problems (these tools include methods, techniques, models, theories, etc. applied in the subject area).

• Examples of concepts that students shall be able to explain: fixed costs, variable costs, sunk cost, alternative principle/cost, present value, future value, income statement, sales budget, annuity, contribution margin, return on total assets, short term liabilities, cash flow and risk-adjusted cost of capital.
• Examples from the toolbox: contribution margin calculations, full costing, income statement, cash budget, investment budget, the double-entry book-keeping principle, break-even analysis, profit maximization and financial ratios.

• When the tool is given, be able to apply the tool correctly
• Based on simple situation descriptions, choose the right tool and apply it correctly
• Based on more complex situation descriptions, be able to produce relevant information, link it to the suitable tool and apply the tool correctly

Part 1: Investment and financing

• Analysis of projects
• Discounting and interest rate calculations
• Methods for measuring profitability of investment projects
• Capital cost
• Financing

• Cost theory
• Income theory and market behaviour
• Cost- result- and volume analysis

• The main financial statements (the income statement and the balance sheet)
• How are financial statements prepared? (Basic registration techniques)
• Principles and key valuation rules in the financial statements
• How can financial statements be used? (Financial statement analysis)
• Budgeting and financial management
• Preparation of the main budgets (income statement budget, cash budget and balance sheet budget) and the relationships between them
• Budgeting for various industries (manufacturing industry, commodity trade, services, cultural institutions, etc.)

• Traditional models of calculation and managerial accounting
• Standard costing and standard cost accounts
• Contribution margin method and full cost method
• Cost estimates and ex post costing
• Budgetary follow-upl
• Variance analysis of costs and revenues

• Decision-relevant costs and income
• Product mix with scarce resources