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)
• Activity-based costing (ABC) as an alternative to traditional costing
• Bottleneck decisions
• 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 decisions;
• 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 costs and apply it 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 certain techniques and methods should be applied in different contexts, including if the methods promote or inhibit long-term orientation and responsible resource application;
• Be able to acquire updated knowledge within the above mentioned knowledge and skills in the subject areas.

Learning methods and activities

Teaching methods: Digital lectures and group work (including the use of spreadsheets). Digital learning platform will be used for exchange of information.

Compulsory assignments

• Approved exercises

Specific conditions

Recommended previous knowledge

Introductory courses in Business Economics and Financial Accounting

Course materials

Curriculum:

Berg, T. Grunnleggende økonomistyring. Latest edition, Cappelen Damm Akademisk.

Helbæk, M. & Olsen, B.A. Excel for økonomistudenter, Latest edition, Universitetsforlaget.

Credit reductions