Management and Cost Accounting

Managerial accounting is a company's internal language, and is used for decision-making, production management, product design and pricing and for motivating and evaluating employees.
Managerial accounting, also called management accounting, focuses on providing information to help individuals inside an organization make better operational decisions. It differs from financial accounting, which focuses on providing information to persons or companies outside of the organization, such as creditors. Unless you understand managerial accounting, you cannot have a thorough understanding of a company's internal operations. What you learn in this course will help you understand the operations of your future employer (and enable you to be more successful at your job), and help you understand other companies you encounter in your role as competitor, consultant, or investor.

• Classifications of costs; Cost behaviour; Methods for cost estimation; Cost allocation.
• Costing methods: job-order costing, process costing, activity-based costing, standard costing.
• Cost-Volume-profit analysis; Brak-even analysis.
• Budgeting and cost variance analysis; Budgetary control.
• Special decisions: The make or buy decision; Dropping unprofitable product lines or products; Acceptance of a special order, etc.
• Assumptions on responsibility accounting: Revenue centres, Cost centres, Profit centres, Investment centres.

NB! This course will take place in spring semester 2025/2026 which starts on 2nd of February and ends on 15th of June (you can find that information under start date section). TalTech's timetables for spring semester 2026 will be published at the beginning of January via tunniplaan.taltech.ee.

After completing the course, the student:

• identifies and calculates different types of costs (direct, indirect, variable, and fixed costs);
• distinguishes between job-costing, process-costing, and joint-costing systems;
• determines the product cost by means of full-costing and direct-costing methods and by means of historical (actual) and standard cost systems;
• prepares and analyses Cost-Volume-Profit data;
• prepares and analyses budgeting process for service, merchandising and manufacturing company;
• calculates and interprets variances;
• uses managerial accounting data to make short-term and long-term decisions.

Final assessment can consist of one test/assignment or several smaller assignments completed during the whole course. After declaring a course the student can re-sit the exam/assessment once. Assessment can be graded or non-graded. For specific information about the assessment process please get in touch with the contact person of this course. For specific information about grade transfer please contact your home university

Prerequisite - Financial Accounting

• Horngren, C. T.; Harrison, W. T. Accounting. (2007). 7 ed. Pearson.

lectures, exercises