MAC3761/104/0/2021
Tutorial Letter 104/0/2021
Management Accounting III
MAC3761
Year module
Department of Management Accounting
This tutorial letter contains important information
about the module.
BARCODE
, CONTENTS
Page
PURPOSE OF THE MODULE ................................................................................................................. 4
PREREQUISITES AND PRIOR KNOWLEDGE ....................................................................................... 4
OVERVIEW OF THE MODULE................................................................................................................ 5
STRUCTURE OF THE TUTORIAL LETTERS FOR THE MODULE ........................................................ 6
LECTURERS’ CONTACT DETAILS ........................................................................................................ 6
STRUCTURE OF THIS TUTORIAL LETTER........................................................................................... 6
PRESCRIBED STUDY MATERIAL ......................................................................................................... 7
ASSESSMENTS AND SCOPE ................................................................................................................ 7
LEARNING UNIT 13: PROCESS COSTING ............................................................................................ 8
13.1 Introduction ................................................................................................................................... 8
13.2 Learning outcomes ....................................................................................................................... 8
13.3 Topic outline ................................................................................................................................. 9
13.4 Losses identified at the inspection point...................................................................................... 10
13.5 Accounting for the proceeds and costs of normal scrap .............................................................. 10
13.6 The short-cut method for allocating normal losses ...................................................................... 10
13.7 The suitability of process costing in a service organisation ......................................................... 16
13.8 Batch or operation costing .......................................................................................................... 16
13.9 Summary .................................................................................................................................... 17
13.10 Self-review exercises .................................................................................................................. 18
LEARNING UNIT 14: STANDARD COSTING ....................................................................................... 19
14.1 Introduction ................................................................................................................................. 19
14.2 Learning outcomes ..................................................................................................................... 19
14.3 Topic outline ............................................................................................................................... 20
14.4 Sales volume variances: levels to use in MAC3761 .................................................................... 22
14.5 Further illustration of idle time and labour efficiency variances.................................................... 22
14.6 Fixed manufacturing overheads variances.................................................................................. 25
14.7 Sales and distribution cost rate and volume variances................................................................ 27
14.8 Further aspects in respect of reconciling actual and standard profit ............................................ 27
14.9 General ledger accounts and journal entries ............................................................................... 28
14.10 Summary .................................................................................................................................... 34
14.11 Self-review exercises .................................................................................................................. 35
LEARNING UNIT 15: RELEVANT COSTING ........................................................................................ 36
15.1 Introduction ................................................................................................................................. 36
15.2 Learning outcomes ..................................................................................................................... 36
15.3 Topic outline ............................................................................................................................... 37
2
, MAC3761/104/0/2021
15.4 Using data and technology in linear programming ...................................................................... 38
15.5 Summary .................................................................................................................................... 39
15.6 Self-review exercises .................................................................................................................. 40
LEARNING UNIT 16: PERFORMANCE MANAGEMENT ...................................................................... 41
16.1 Introduction ................................................................................................................................. 41
16.2 Learning outcomes ..................................................................................................................... 41
16.3 Topic outline ............................................................................................................................... 42
16.4 Determining ‘investment’ – Point in time ..................................................................................... 43
16.5 A divisionalised organisational structure ..................................................................................... 43
16.6 Applying the principle of controllability to performance management .......................................... 45
16.7 Further aspects of non-financial performance measures............................................................. 46
16.8 Summary .................................................................................................................................... 46
16.9 Self-review exercises .................................................................................................................. 47
LEARNING UNIT 17: PRICE SETTING ................................................................................................. 48
17.1 Introduction ................................................................................................................................. 48
17.2 Learning outcomes ..................................................................................................................... 48
17.3 Topic outline ............................................................................................................................... 49
17.4 Intermediate versus final products .............................................................................................. 50
17.5 Cost-plus pricing method: customised and non-customised products ......................................... 50
17.6 Target rate of return on invested capital approach ...................................................................... 51
17.7 The role of different levels of fixed cost in discontinuation decisions of price takers .................... 51
17.8 Price elasticity: further aspects ................................................................................................... 52
17.9 Summary .................................................................................................................................... 53
17.10 Self-review exercises .................................................................................................................. 53
LEARNING UNIT 18: OTHER ANCILLARY TOPICS ............................................................................ 54
18.1 Introduction ................................................................................................................................. 54
18.2 Learning outcomes ..................................................................................................................... 54
18.3 Topic outline ............................................................................................................................... 55
18.4 Further aspects on life-cycle costing ........................................................................................... 56
18.5 Big data ...................................................................................................................................... 58
18.6 Costing digital products............................................................................................................... 61
18.7 Digital costing systems ............................................................................................................... 63
18.8 Non-financial performance indicators .......................................................................................... 64
18.9 Summary .................................................................................................................................... 64
18.10 Self-review exercises .................................................................................................................. 65
BIBLIOGRAPHY.................................................................................................................................... 66
3
, PURPOSE OF THE MODULE
This module (MAC3761) is intended to equip you with specific competencies in financial
management, management decision-making and control, and strategy and risk. The module
will enable you to demonstrate integrated knowledge in these competencies, including
pervasive skills, ethics and professional practice, and other accounting competencies.
This module is designed to facilitate your acquisition of these competencies through knowledge
of and engagement in relevant management accounting and financial management topics at
the forefront of the field, including an understanding of the theories, methods and techniques
relevant to the field and how to apply this knowledge in a particular context.
The syllabus is divided into two main components: Costing and Finance. The costing
component includes the following main topics: cost accounting, planning and control, and
decision-making. The finance component includes the following topics: strategy and risk
management, investment and financing decisions, capital structure, working capital
management, the treasury function, valuations, mergers and acquisitions, and analysis of
financial information.
PREREQUISITES AND PRIOR KNOWLEDGE
This module, to a large extent, builds upon prior knowledge you would have obtained in your
second year (NQF level 6) of management accounting studies. The prerequisites for this module
are MAC2601 (Principles of Management Accounting) and MAC2602 (Principles of Strategy, Risk
and Financial Management Techniques). Therefore, this module is designed on the premise and
assumption that you have already completed these prerequisites (or their equivalents) and that
you have achieved the necessary prior learning. You can access the study guides for MAC2601
and MAC2602 on myUnisa in the event that you need to revisit some principles covered in
second-year management accounting.
4
Tutorial Letter 104/0/2021
Management Accounting III
MAC3761
Year module
Department of Management Accounting
This tutorial letter contains important information
about the module.
BARCODE
, CONTENTS
Page
PURPOSE OF THE MODULE ................................................................................................................. 4
PREREQUISITES AND PRIOR KNOWLEDGE ....................................................................................... 4
OVERVIEW OF THE MODULE................................................................................................................ 5
STRUCTURE OF THE TUTORIAL LETTERS FOR THE MODULE ........................................................ 6
LECTURERS’ CONTACT DETAILS ........................................................................................................ 6
STRUCTURE OF THIS TUTORIAL LETTER........................................................................................... 6
PRESCRIBED STUDY MATERIAL ......................................................................................................... 7
ASSESSMENTS AND SCOPE ................................................................................................................ 7
LEARNING UNIT 13: PROCESS COSTING ............................................................................................ 8
13.1 Introduction ................................................................................................................................... 8
13.2 Learning outcomes ....................................................................................................................... 8
13.3 Topic outline ................................................................................................................................. 9
13.4 Losses identified at the inspection point...................................................................................... 10
13.5 Accounting for the proceeds and costs of normal scrap .............................................................. 10
13.6 The short-cut method for allocating normal losses ...................................................................... 10
13.7 The suitability of process costing in a service organisation ......................................................... 16
13.8 Batch or operation costing .......................................................................................................... 16
13.9 Summary .................................................................................................................................... 17
13.10 Self-review exercises .................................................................................................................. 18
LEARNING UNIT 14: STANDARD COSTING ....................................................................................... 19
14.1 Introduction ................................................................................................................................. 19
14.2 Learning outcomes ..................................................................................................................... 19
14.3 Topic outline ............................................................................................................................... 20
14.4 Sales volume variances: levels to use in MAC3761 .................................................................... 22
14.5 Further illustration of idle time and labour efficiency variances.................................................... 22
14.6 Fixed manufacturing overheads variances.................................................................................. 25
14.7 Sales and distribution cost rate and volume variances................................................................ 27
14.8 Further aspects in respect of reconciling actual and standard profit ............................................ 27
14.9 General ledger accounts and journal entries ............................................................................... 28
14.10 Summary .................................................................................................................................... 34
14.11 Self-review exercises .................................................................................................................. 35
LEARNING UNIT 15: RELEVANT COSTING ........................................................................................ 36
15.1 Introduction ................................................................................................................................. 36
15.2 Learning outcomes ..................................................................................................................... 36
15.3 Topic outline ............................................................................................................................... 37
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, MAC3761/104/0/2021
15.4 Using data and technology in linear programming ...................................................................... 38
15.5 Summary .................................................................................................................................... 39
15.6 Self-review exercises .................................................................................................................. 40
LEARNING UNIT 16: PERFORMANCE MANAGEMENT ...................................................................... 41
16.1 Introduction ................................................................................................................................. 41
16.2 Learning outcomes ..................................................................................................................... 41
16.3 Topic outline ............................................................................................................................... 42
16.4 Determining ‘investment’ – Point in time ..................................................................................... 43
16.5 A divisionalised organisational structure ..................................................................................... 43
16.6 Applying the principle of controllability to performance management .......................................... 45
16.7 Further aspects of non-financial performance measures............................................................. 46
16.8 Summary .................................................................................................................................... 46
16.9 Self-review exercises .................................................................................................................. 47
LEARNING UNIT 17: PRICE SETTING ................................................................................................. 48
17.1 Introduction ................................................................................................................................. 48
17.2 Learning outcomes ..................................................................................................................... 48
17.3 Topic outline ............................................................................................................................... 49
17.4 Intermediate versus final products .............................................................................................. 50
17.5 Cost-plus pricing method: customised and non-customised products ......................................... 50
17.6 Target rate of return on invested capital approach ...................................................................... 51
17.7 The role of different levels of fixed cost in discontinuation decisions of price takers .................... 51
17.8 Price elasticity: further aspects ................................................................................................... 52
17.9 Summary .................................................................................................................................... 53
17.10 Self-review exercises .................................................................................................................. 53
LEARNING UNIT 18: OTHER ANCILLARY TOPICS ............................................................................ 54
18.1 Introduction ................................................................................................................................. 54
18.2 Learning outcomes ..................................................................................................................... 54
18.3 Topic outline ............................................................................................................................... 55
18.4 Further aspects on life-cycle costing ........................................................................................... 56
18.5 Big data ...................................................................................................................................... 58
18.6 Costing digital products............................................................................................................... 61
18.7 Digital costing systems ............................................................................................................... 63
18.8 Non-financial performance indicators .......................................................................................... 64
18.9 Summary .................................................................................................................................... 64
18.10 Self-review exercises .................................................................................................................. 65
BIBLIOGRAPHY.................................................................................................................................... 66
3
, PURPOSE OF THE MODULE
This module (MAC3761) is intended to equip you with specific competencies in financial
management, management decision-making and control, and strategy and risk. The module
will enable you to demonstrate integrated knowledge in these competencies, including
pervasive skills, ethics and professional practice, and other accounting competencies.
This module is designed to facilitate your acquisition of these competencies through knowledge
of and engagement in relevant management accounting and financial management topics at
the forefront of the field, including an understanding of the theories, methods and techniques
relevant to the field and how to apply this knowledge in a particular context.
The syllabus is divided into two main components: Costing and Finance. The costing
component includes the following main topics: cost accounting, planning and control, and
decision-making. The finance component includes the following topics: strategy and risk
management, investment and financing decisions, capital structure, working capital
management, the treasury function, valuations, mergers and acquisitions, and analysis of
financial information.
PREREQUISITES AND PRIOR KNOWLEDGE
This module, to a large extent, builds upon prior knowledge you would have obtained in your
second year (NQF level 6) of management accounting studies. The prerequisites for this module
are MAC2601 (Principles of Management Accounting) and MAC2602 (Principles of Strategy, Risk
and Financial Management Techniques). Therefore, this module is designed on the premise and
assumption that you have already completed these prerequisites (or their equivalents) and that
you have achieved the necessary prior learning. You can access the study guides for MAC2601
and MAC2602 on myUnisa in the event that you need to revisit some principles covered in
second-year management accounting.
4
