Management Accounting

Management accounting as a component of accounting. Differences between management accounting and financial accounting. Classifications of costs. Cost behaviour. Relevant range. Methods for cost estimation. Cost allocation. Variable costing and absorption costing. Relevant and irrelevant costs for decision making. The make or buy decision. Dropping unprofitable product lines or products. Acceptance of a special order. Assumptions on responsibility accounting. Revenue centres. Cost centres. Profit centres. Investment centres. Purposes and methods of transfer pricing. Assumptions of cost-volume-profit analysis. Main concepts and formulas. Break-even chart. Target costing. Budgeting process. Situation analysis. Environmental outlook. Statement of main objectives, process of preparation, negotiation and final acceptance of budgets. Budgetary control. Preparation of cash flow statements. Financial statement analysis.

NB! This course will take place in autumn semester 2025/2026 which starts on 1st of September and ends on 25th of January (you can find that information under Start date section). TalTech's timetables for Autumn semester 2025 will be published at the end of June via tunniplaan.taltech.ee. Switch the page to English and use "Search" and "Open detailed search" to find your course. NB! Some courses are taught by several lecturers during the same semester. Make sure that the course name and lecturer/teacher infromation of your course match with the information given in the Course Catalogue.

After completing this course, the student:

• identifies and defines differences between financial and managerial accounting;
• applies various costing systems: Job order, Process costing, ABC costing for service, merchandising and manufacturing companies;
• applies CVP analysis to calculate break-even point, target profit and prepare scenario reports;
• prepares basic budgets and performs variance analysis;
• prepares calculations and evaluates special business decisions: specials sales order, dropping of a segment, product mix, outsourcing, pressing further;
• prepares and interprets capital budgeting 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 - Principles of Financial Accounting.

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

lectures, exercises