Introduction
This unit will give learners a foundation in financial principles and techniques relevant to the strategic management process. It encourages learners to explore the nature of cost-based financial data and information, the impact of the budgeting process on the organisation, and the development of cost reduction and management procedures and processes. It also focuses on the management of these costs through the use of forecasting, appraisal and financial reporting procedures. One of the main objectives of this unit is for learners to develop the confidence to apply, analyse and evaluate financial and cost information.
Areas of Learning
Be able to apply cost concepts to the decision-making process
Costs and prices, Cost systems, Responsibility and control of systems
Be able to apply forecasting techniques to obtain information for decision making
Forecasting techniques, Funds, sources
Be able to participate in the budgetary process of an organisation
Target setting, Process, Budgets, Monitoring process
Be able to recommend cost reduction and management processes for an organisation
Cost reduction, Activity-based costing
Abel to use financial appraisal techniques to make strategic investment decisions for an organisation
Investment, Investment appraisal
Be able to interpret financial statements for planning and decision making
Statements, financial ratios, interpretation and limitations of financial ratios
ASSIGNMENT TASK
Task 1
You are required to choose an organisation of your own and explain the importance of costs in the pricing strategy of that chosen organisation. You could describe other systems they considered in this process and explain the reasons behind their final design. Also propose improvements to the costing and pricing systems used in their chosen organisation. (A.C 1.1,A.C 1.2 and A.C1.3)
Task 2
You need to apply forecasting
Bibliography: Textbooks Atrill P and McLaney E – Management Accounting for Non-specialists, 3rd Edition (Financial Times/Prentice Hall, 2002) ISBN 0273655914 Berry A and Jarvis R – Accounting in a Business Context, 4th Edition (Cengage Learning EMEA, 2005) ISBN 1844802515 Brookson S – Managing Budgets (Dorling Kindersley, 2000) ISBN 0751307718 Cox D and Fardon M – Management of Finance (Osborne Books, 1997) ISBN 872962238 Drury C – Management Accounting for Business, 4th Edition (Cengage Learning EMEA, 2009) ISBN 1408017717 Glynn J, Perrin J, Murphy M and Abraham A – Accounting for Managers, 3rd Edition (Thomson Learning, 2003) ISBN 186152904X Harris R and Sollis R – Applied Time Series Modelling and Forecasting (John Wiley and Sons, 2003) ISBN 0470844434 Lumby S and Jones C – The Fundamentals of Investment Appraisal (Thomson Learning, 2000) ISBN 1861526075 Monden Y – Cost Reduction Systems: Target Costing and Kaizen Costing (Productivity Press, 1995) ISBN 1563270684 Makridakis S, Wheelwright S C and Hyndman R J – Forecasting, 3rd Edition (John Wiley and Sons, 1998) ISBN 0471532339 Pettinger R – Investment Appraisal: A Managerial Approach (Palgrave Macmillan, 2000) ISBN 0333800591 Yoshikawa T, Innes J and Mitchell F – Strategic Value Analysis (Financial Times/Prentice Hall, 2002) ISBN 0273654292