Course content

• Models of cost accounting: normal and standard cost according to the variable and absorption costing
• Business decision making problems (relevant costs and revenues for decision making)
• Bottleneck decsions
• Activity-based costing (ABC) as an alternative to traditional costing
• Profitability analysis
• Different types of budgets and the budgeting process
• Basic estimation of cost functions
• Basic cost allocation
• Decentralization and performance measurement

Learning outcome

Knowledge:

• Have an understanding and knowledge of management accounting based on normal cost and standard cost (based on the variable and absorption costing) with variance analysis
• Have knowledge of flexible budgets
• Have knowledge of Activity-based costing (ABC)
• Have knowledge of business decision-making problems
• Have knowledge of bottleneck decsions
• Have knowledge of the budgeting process
• Have knowledge of different types of budgets
• Have knowledge of responsibility centers and make transfer pricing
• Have knowledge of basic cost estimation
• Have knowledge of basic cost allocation
• Have knowledge of the performance measurement

Skills:

• Be able to prepare normal cost accounting and standard cost accounting according to the variable and absorption costing principles
• Be able to conduct variance analysis
• Be able to prepare calculation with Activity-based costing
• Be able to distinguish between decision-relevant and decision-irrelevant incomes and costs, and apply these in various decision-making situations
• Be able to prepare budgets, especially cash budget, result budget and balance sheet budget
• Understand the purpose of dividing an organization into responsibility centers, as well as calculating transfer prices
• Have insight into performance measurement

General competence:

• Be able to see the subject in a broader economic context
• Be able to use cost accounting and budgeting in corporate financial management
• Critically assess whether different methods and techniques should be apllied in different contexts, including asess whether the methods promote or inhibit long-term orientation and responsible use of resources
• Be able to acquire updated knowledge within the above mentioned knowledge and skills in the subject areas.

Learning methods and activities

Teaching methods:

Lectures (can be both digital and physical) and group work (including the use of spreadsheets). Digital learning platform will be used to some extent in the exchange of information.

Compulsory assignments

• Mandatory assignment

Specific conditions

Recommended previous knowledge

Continuation of Financial Management I. The main focus is on the introduction to budgeting and the preparation of operating accounts based on the full cost and contribution margin principles, models and theories for use in various business economic decision-making problems, as well as recommendations based on the relevant theories

Course materials

Curriculum:

• Mandatory: K. G. Hoff og M. Helbæk: Økonomistyring 2: Driftsregnskap og budsjettering, 7. utgave. Universitetsforlaget. ISBN: 9788215039732
• Recommendation: K. G. Hoff og M. Helbæk: Arbeidsbok til Økonomistyring 2, 7. utgave. Universitetsforlaget. ISBN: 9788215038810