UNIVERSITY OF NATIONAL AND WORLD ECONOMY
COURSE TITLE: MANAGEMENT ACCOUNTING
SEMESTER: WINTER
TEACHER’S NAME: Prof. Dr. Stoyan Stoyanov, Ph.D.; Chief Assist. Prof. Dr. Mihail Musov
OFFICE: 1700 Sofia, Studentski Grad, UNWE, 1040 cabinet
E-MAIL: [email protected]
1. ANNOTATION
The major goal of the course is to familiarize students with the basic issues concerning the essence of
management accounting as a scientific theory and practices. The course is aimed to perform two basic
functions: to explain in a comprehensive and integrated manner, albeit understandably, the theory of
company accounting and also contribute to the students’ acquisition of management accounting skills that
they will need in their practical work. In the interpretation of the topics both the traditional approaches and
the contemporary trends in the area of management accounting have been presented. The aim is to meet all
modern requirements for the comprehensive and integral training of students in the field of accounting.
The discipline is taught in compliance with the syllabus developed and endorsed under the established terms
and conditions at the UNWE. The material is structured in the following topics:
1.
2.
Introduction to management accounting
Conception about the essence of income and costs and their classification for the purpose of intercompany accounting analysis
3. Cost behaviour analysis
4. Introduction to costing theory
5. Costing methods
6. Costs-volume-profit analysis
7. Budgeting
8. Budgetary control and accounting analysis in applying standard costs
9. Relevant costs and decision making. Pricing decisions
10. Responsibility accounting. Transfer pricing
The curriculum is based on student’s acquired knowledge in certain fundamental economic disciplines such as
Principles to Accounting, Financial accounting, Economics, Management.
2. LANGUAGE OF TEACHING
ENGLISH
3. COURSE CONTENT (TOPICS)
No
1.
TOPICs
INTRODUCTION TO MANAGEMENT ACCOUNTING
Management accounting – functions of management accounting,
need for management accounting, expanding role of management
accounting. Comparison of Management and Financial accounting.
Historical developments in management accounting. Contemporary
business realities and management accounting practices.
Professional ethics.
Lectures
CLASSES
Seminars
2
2
Noncontact
0
UNIVERSITY OF NATIONAL AND WORLD ECONOMY
2.
CONCEPTION ABOUT THE ESSENCE OF INCOME AND COSTS AND
THEIR CLASSIFICATION FOR THE PURPOSE OF INTER-COMPANY
ACCOUNTING ANALYSIS
5
4
8
3
2
7
4
4
6
6
2
10
6
4
10
6
4
10
4
2
8
5
4
8
Incomes and costs terms and concepts for managerial accounting
purpose: total, average and marginal incomes and costs. Cost
classifications: General costs classifications (direct and indirect costs;
manufacturing and nonmanufacturing costs); Product costs and
period costs; Costs classifications for predicting cost behaviour (fixed,
variable and mixed costs); cost classifications on financial
statements; differential (relevant) cost and revenue; sunk cost;
opportunity cost; cost classifications for control.
3.
COST BEHAVIOUR ANALYSIS
Cost function. Methods of cost behaviour analysis: Engineering
method, Account analysis method, High-low method, Scattergraph
method and Regression analysis method.
4.
INTRODUCTION TO COSTING THEORY
The basics of costing. Cost object and cost unit. Costing structure.
Costing systems: actual costing; standard costing; normal costing.
Costing approaches: Full-absorption costing; Variable costing;
Activity-based costing; Throughput accounting.
5.
COSTING MЕTHODS
Methods of costing. Job-order costing. Process costing. Joint
products and byproducts.
6.
COSTS-VOLUME-PROFIT ANALYSIS
Cost-Volume-Profit analysis (CVP): the basics of CVP analysis; the
Equation method for break-even analysis; the Contribution margin
method for break-even analysis; break-even analysis in Graphic form.
CVP and the Margin of safety. CVP considerations in choosing a cost
structure. Target profit analysis. Operating leverage. Sales-mix and
Break-even analysis. Assumptions of CVP analysis.
7.
BUDGETING
The basics of budgeting. Approaches. Budgeting cycle. Flexible
budgets. Incremental budgets. Zero-based budgeting. Preparing the
Master budget: Sales budget; Production budget; Direct materials
budget; Materials purchases budget; Direct labor budget;
Manufacturing overhead budget; Selling and Administrative expense
budget; Cash budget; Budgeted Income statement; Budgeted Balance
sheet. Activity-based budgeting.
8.
BUDGETARY CONTROL AND ACCOUNTING ANALYSIS IN APPLYING
STANDARD COSTS
Budgetary control - approaches. Standard costs setting, management
by exceptions and controls based on standards costs. Direct
materials variances. Direct labor variances. Variable manufacturing
overhead variances. Fixed manufacturing overhead variances. Sales
revenue variances. Integrated analyses of cost variances (4-variance
analyses) and of their effect on net income.
9.
RELEVANT COSTS AND DECISION MAKING. PRICING DECISIONS
Relevant costs and revenues. Adding and dropping segments. Makeor-buy decisions. Special orders. Utilization of a constrained resource
and product-mix decisions.
UNIVERSITY OF NATIONAL AND WORLD ECONOMY
Major Influences on Pricing Decisions. Pricing for the Short Run.
Pricing for the Long Run. Target pricing. Cost-plus pricing, incl. full
cost-plus pricing and variable cost-plus pricing. Mark-ups (% of cost)
and margins (% of sales price).
10.
RESPONSIBILITY ACCOUNTING. TRANSFER PRICING
4
2
8
Decentralization in organizations and management control systems.
Key features of effective performance management systems:
financial and non-financial performance measures selection.
Traditional approach to responsibility centers: Cost centers analysis;
Revenue centers analysis, profit centers analysis and investment
centers analysis.
Transfer pricing. Calculating transfer prices: Market-based transfer
prices; Cost-based transfer prices; Hybrid transfer prices (two part
transfer prices; dual pricing; negotiated pricing)
4. METHODS OF TEACHING
The instruction of the discipline is aimed at achieving two major goals: to explain in a thorough and integrated,
though comprehensible, manner the theory of company accounting, and to help students acquire the skills of
management accountants that they will need in their practice. To this effect the separate topics in the course
of lectures are illustrated by cases that are aimed at encouraging reasoning and the effective application of
the acquired knowledge. The seminars envisage doing case studies and tests.
In the 2012/2013 academic year ongoing assessment was introduced. The term exam includes solving case
studies. Each case study brings a number of points, which are specified in the concrete variant of the exam.
Students are required to arrive at the solution of the case study. The grade is based on the percentage of true
answers within the overall number of points established along a scale.
Students are tasked with solving problems in the form of individual assignments. The solutions to the
problems (answer keys) for personal assignments are provided in textbooks and are checked during seminars.
5. LEARNING OUTCOMES
Theoretical knowledge provided from the subject

Role and importance of management accounting as a scientific and practical activity;

Fundamental differences between financial and management accounting

Behavioural aspects within the organization and ethical problems in management accounting
practice;

Phases in historical development of management accounting;

Contemporary methodology of management accounting in various specific issues: costs, costing,
pricing, budgeting, variance analyses, responsibility accounting, etc.
Practical skills provided from the subject

Classification of costs for management accounting purposes;

Products and services costing using various traditional and contemporary approaches and methods
and their usage for pricing;

Development and application of CVP analysis as a management tool;

Application of various budgeting approaches and methods and preparation of budgets;

Identification of relevant data about cost and revenue for use in management decision making;

Analyse the variances and the causes for the variances;

Analyse the results of the responsibility centres within the organization.
UNIVERSITY OF NATIONAL AND WORLD ECONOMY
6. ASSESTMENT METHODS
The final grade on the discipline is formed along a six-point scale in compliance with the scale under ECTS. The
minimal grade required for the successful passing of the discipline is Fair 3, which corresponds to the
European Credit Transfer and Accumulation System.
The term test includes the solution of case studies. Each case study brings a number of points, which are
specified in the concrete variant of the exam. Students are required to arrive at the solution of the case study.
The grade is based on the percentage of true answers within the overall number of points established along a
scale as follows:
80 % - 100 % - excellent
70% - 79 % - very good
60% - 69 % - good
50% - 59% - fair
49 % - poor
The formula along which the final grade is formed is the following:
FG = 0,50 TE/T + 0,50 T
Where
FG
TE
T
=
=
=
final grade
term exam
tests (2 in number)
The final grade is formed along a six-point scale, and the minimal grade for the successful passing of the
course if Fair 3. It follows a full compliance with the European Credit Transfer System.
7. REFERENCES (MANDATORY AND RECOMMENDED)
Basic: A detailed and updated list of recommended literatures is handed out at the start of the training of the
discipline. Some of the major literary sources include the following:

Bhimani, A. and M. Bromwich (2009), Management Accounting: Retrospect and Prospect,
Elsevier/CIMA;

Bhimani, A. (2006), Contemporary Issues in Management Accounting, OUP;

Garrison, R., E. Noreen, and P. Brewer (2014), Managerial Accounting, 15th ed., McGraw-Hill;

Drury, C., Management and Cost Accounting (2012), 8th ed., Cengage Learning;

Horngren, C., S. Datar, and M. Rajan (2012), Cost Accounting – A Managerial Emphasis, 14th ed.,
Pearson. Prentice Hall;

Kaplan, R. and A. Atkinson (1998), Advanced Management Accounting, 3rd ed., Prentice Hall;

Yonkova, B., N. Oresharov, Т. Rupska (2010), Basic Course in Management Accounting, Stopanstvo
publishing house at UNWE, Sofia

Trifonov, Т., Accounting Optimization of Assets and Liabilities (Management Accounting Analysis part 1, 2003), Trakiya-M, Sofia

Trifonov, Т., Systems and Methods for Cost Analysis and Cost Calculation (Management Accounting
Analysis - part 2, 2003), Trakiya-M, Sofia

Trifonov, Т., Strategic Accounting Budgeting (Management Accounting Analysis - part 3, 2004),
Trakiya-M, Sofia
Additional: The literature available at the UNWE library, literature accessible through the portals provided by
the library, websites and sources.