Updated A.Y. 2017-2018

MANAGERIAL ACCOUNTING - Basics of Cost Analysis

(Dott. Gabriele PALOZZI)

Dott. Gabriele PALOZZI, Ph.D.
Office Hour: T.B.D.


The course introduces cost concepts and terminology, inventory control, capital asset selection, and performance measurement. Cost accounting provides key data to managers for planning and controlling, as well as data on costing products, services, and customers. By focusing on basic concepts, analyses, uses, and procedures, we recognize cost accounting as a managerial tool.



1) Learning Skills
- Understanding of cost behaviour and related terminology
- Introduction to significance of “cost” in business decisions
- Definition some skills for cost management
- Introduction of the concept of Managerial Control aimed at Business Planning
2) Applying Knowledge and Understanding
- Identification of direct and indirect cost
- Identification those costs have to be attributed and allocated
- Calculate the break-even point
- Understand those relevant items in cost computation
- Identification of Capital Budget main features
3) Making Judgements
- Comprehension of business internal reports
- Definition the profitability of a particular business segment
- Comprehension of both Variable Cost and Full Cost Reporting
4) Communication Skills
- Discussion of cases study and exercises by using the appropriate terminology
- Providing Cost Accounting Reports aimed at inform business management


I) Managerial vs Financial Accounting
• Concepts of cost & expenses
• Planning & Control Process
• Product Cost and Period Cost
• Examine and solve case studies

II) Fundamentals of Cost Accounting
• Differentiate between direct and indirect costs.
• Cost attribution and cost allocation
• Identify key components and terminology utilized within cost accounting.
• Examine and solve case studies

III) Cost-Volume-Profit (CVP)
• Distinguish among fixed, mixed, and variable costs.
• Calculate a break-even point using the elements of cost-volume-profit (CVP).
• Prepare income statements using both variable and absorption costing.
• Examine and solve case studies

IV) Cost Allocation
• Identify cost drivers for manufacturing and service activities.
• Calculate overhead rates using cost drivers.
• Compute allocation of overhead costs to cost pools, end products, and services.
• Examine and solve case studies

V) Capital Budgeting Decisions
• Capital Budgeting and Planning Investment: basic concepts
• The Net Present Value and the Internal Rate of Return
• Other approaches to capital budgeting decisions
• Examine and solve case studies



- BOOK TITLE: Managerial Accounting - Basics of Cost Analysis; McGraw-Hill Education - CREATE
ISBN:  9781308978611

- Slides and research material provided by the lecturer


The course will be a combination of lectures, problem-solving, case studies, and interactive class discussions.



The final exam consists in two compulsory parts that usually are held on the same day:

1) a written exam covering the entire course's material; it concerns with both theoretical questions and practical application. Minimum qualifying grade required to get credit: 18/30.

2) an oral exam.