Course - Business economics - AE302010
Business economics
About
About the course
Course content
- Cost-Volume-Profit analysis
- Job costing /costing techniques (also Activity-based costing)
- Budgets, flexible budgets with direct-cost variances and overhead cost variances
- Inventory costing and capacity analysis
- Estimation of cost functions using quantitative methods
- Decision making and relevant information
- Strategy, balanced scorecard and strategic profitability analysis
- Price decisions and cost management
- Cost allocation
- Customer-profitability analysis and further analysis of sales-volume variance
- An introduction to process costing
- Inventory management focusing on EOQ model
- Capital budgeting and performance measurement
- Transfer pricing and Management control systems
Learning outcome
Knowledge:
- have knowledge of Cost-Volume-Profit analysis
- have knowledge of various costing methods with emphasis on Activity-based costing (ABC)
- have knowledge of static budget, flexible budget and variance analysis
- have knowledge of absorption and variable costing for computing income
- have knowledge of various methods of cost estimation
- have knowledge of relevant information in decision situations
- have knowledge of Balanced Scorecard and strategic profitability analysis
- have knowledge of factors that affect pricing decisions and various methods of long-run pricing decisions
- have knowledge of methods of cost allocation in various situations
- have knowledge of customer-profitability analysis and further analysis of sales-volume variance
- have insight into process costing
- have knowledge of EOQ model for inventory management
- have knowledge of capital budgeting, transfer pricing and various performance measures
Skills:
- perform various calculations in connection with Cost-Volume-Profit analysis
- perform cost calculations focusing on Activity-based costing, as well as evaluate benefits and disadvantages of Activity-based costing systems
- develop flexible budget as well as calculate and analyze direct-cost variances and overhead cost variances
- compute income under absorption costing and variable costing, explain the difference in income, as well as carrying out appropriate analysis
- discuss the appropriateness of various cost allocation bases
- determine appropriate cost drivers, also by means of the regression analysis
- be able to distinguish relevant from irrelevant information in decision situations
- analyze the impact of various strategic choices
- be able to apply methods for long-run pricing decisions, as well as discuss different pricing strategies including internal pricing
- conduct various cost- and revenue allocation between units/departments, products and customers
- be able to conduct customer-profitability analysis
- be able to carry out inventory calculations within the EOQ decision model
- discuss the properties of different performance measures (financial and non-financial), as well as calculate and analyze financial performance measures
General competence:
- acquire updated knowledge in the subject
- communicate about issues relevant to the subject and be able to conduct appropriate analyses and to draw conclusions on relevant issues
- have insight into how the subject matter can be used in the sustainable development of organizations.
Learning methods and activities
Teaching methods: Lectures and problem solving. The learning management system Blackboard will be used to some extent in the exchange of information. Mandatory Assignments: One compulsory paper (consists of several tasks) must be handed in for assessment. This paper must achieve a pass in order for a candidate to take the exam. Students who had approved mandatory assignments earlier are exempt from mandatory work requirements for later continuation exams.
Compulsory assignments
- Mandatory assignment
Further on evaluation
Supporting material allowed on exams: Calculator (none programable and without the ability to wirelessly communicate). Approved calculator regarding NTNUs support material code D "specific basic calculator". Other calculators that are allowed in the course are: Casio FC-100V and Texas Instruments - BAII Plus.
Recommended previous knowledge
As required for admission to Norwegian higher education. AE201306 Cost Accounting and budgeting, AM201306 Quantitative and Qualitative Methods.
Required previous knowledge
None
Course materials
Mandatory: Datar S. M. & Rajan M. V.: Horngrens's Cost Accounting - A MANAGERIAL EMPHASIS (17th Ed), Pearson Education Limited (2021), ISBN: 9781292363073. Except chapters 11 and 20. The final information is given at the start of the semester.
Subject areas
- Economics and Administration
Contact information
Course coordinator
Department with academic responsibility
Examination
Examination
Ordinary examination - Autumn 2025
School exam
The specified room can be changed and the final location will be ready no later than 3 days before the exam. You can find your room location on Studentweb.