Valid for: 2023/24
Faculty: Faculty of Engineering, LTH
Decided by: PLED I
Date of Decision: 2023-04-14
Main field: Technology.
Compulsory for: I2
Elective Compulsory for: M3
Elective for: B4, C4, D4, E4, F4, K4, MD3
Language of instruction: The course will be given in Swedish
Inside companies there are control systems for planning and follow-up of goals on different levels and in different dimensions. The management accounting and controlsystem, which is the central part of this course, consists of internal accounts, systems for product cost estimates, budgeting systems, performance measurement systems and incentive system.The basic course of Managerial Economics gives foremost a frame of references and certain basic principles how to handle economic problems. The advanced course shall, based on the basic course, be a problem orientated deepening leading to deeper knowledge about the economic system in complicated and real company situations especially aiming at the work field of the technician.
Knowledge and understanding
For a passing grade the student must
For the internal accounts section of the course this means:
For the systems for product cost estimates section of the course this means:
For the budgeting systems section of the course this means:
For the performance measurement and incetive system this means:
Competences and skills
For a passing grade the student must
For the internal accounts section of the course this means:
For the systems for product cost estimates section of the course this means:
For the budgeting systems section of the course this means:
For the performance measurement and incetives sytem this means:
The student shall be able to orally and in writing analyse and evaluate different business problems and argue for her/his suggestions to solution. The supposed target group is the executive managers.
A company can have various overall goals. Some are quantitatively measurable like profitability and solidity goals. Then we use the external reports of the company (budget of profit and loss and budget of balance) to measure if the company has reached the overall economic goals and possible divergences can be analysed. Other goals are more qualitative and difficult to measure in a clear-cut way. Inside a company there are systems for planning and follow-up of goals on different levels and in different dimensions. The economic system, which is central in this course, consists of the accounts system, system for product cost estimates, budgeting system and system for investment planning.
By way of introduction we refer to the basic course. The basic principles are of course central. In the introduction we repeat the basic principles as well as the structure of the base-plane through exercises in accounting and annual accounts.
Then we go deeper into internal accounts. Internal accounts and financial accounts are normally integrated parts in the whole accounts system of the company. Cost estimates and budgets need data which to a greater extent rest on earlier outcomes. A well developed accounts system for registration of economic data about actual events are therefore important. Apart from this, an accounts system is needed to follow-up and control planned activities specified in the budget and calculus work.
What decisions are arrived at depends on how costs are managed from a strategic point of view as well as in product calculi. Calculi create a picture of the economic consequences coming from different kind of decisions. At the same time calculation means allocation which is more or less problematic. In focus are cost standards, cost control, cost drivers, and the cost structure inside the company. This is treated in two work cases.
The budget is a forecast and planning tool in the economic control. The planning of the flow of recourses and capacity the coming year is done in a budget. The date of the budget is transferred into the same structure as in the accounting system and become "forecast volumes" in the accounts or groups of accounts. The compiled economic consequences are expressed in budgets for liquidity, profit and balance. In the course not only the technique is treated but also the budget process and the procedure in budgeting.
The performance measurement and incentive systems are essential for establishing and evaluating the companys outcomes and achievements.
In order to reach the goals in a market oriented organisation it is demanded that the company can handle exchange processes and the reactions that cause economical transactions in different markets. A business case will illustrate this and integrate the different moments of the course and create a comprehensive view of the company.
Grading scale: TH - (U,3,4,5) - (Fail, Three, Four, Five)
Assessment: Written exam comprising 80 points. A passing exam demands 40 points. For a passing grade it is required, in addition to passing written exam, that mandatory assignments are completed.
The examiner, in consultation with Disability Support Services, may deviate from the regular form of examination in order to provide a permanently disabled student with a form of examination equivalent to that of a student without a disability.
Parts
Code: 0117. Name: Examination.
Credits: 6. Grading scale: TH.
Code: 0217. Name: Case 1.
Credits: 0. Grading scale: UG. Assessment: Written assigment and active participation in seminar. Further information: Two of the three G on case studies required for G in the course.
Code: 0317. Name: Case 2.
Credits: 0. Grading scale: UG. Assessment: Written assigment and active participation in seminar. Further information: Two of the three G on case studies required for G in the course.
Code: 0417. Name: Computer Exercise.
Credits: 0. Grading scale: UG. Assessment: Written assignment and active participation in seminar.
Assumed prior knowledge: Basic course in Managerial economics
The number of participants is limited to: No
The course overlaps following course/s: MIO040, MIO201
Director of studies: Ingela Elofsson, Ingela.Elofsson@iml.lth.se
Course homepage: http://www.pm.lth.se