unit outline - managerial accounting

Unit description: This unit provides students with an appreciation of management accounting concepts related to the management functions of decision-making, planning and control.. Studen

UNIT OUTLINE - MANAGERIAL ACCOUNTING

SEMESTER I – YEAR 2012 - 2013

1 Unit code: BBUS 1.10

2 Number of credits: 04

3 Prerequisite(s): Accounting, Principles of Economics

4 Lecturer: Nguyen Phong Nguyen

Email: nguyenphongnguyen@ueh.edu.vn

Mobile phone: 0948246655

5 Unit description:

This unit provides students with an appreciation of management accounting concepts related to the management functions of decision-making, planning and control Students are introduced to the application of management accounting tools for business decision making, budgetary control and cost management, as well as performance evaluation

6 Learning outcomes/objectives:

On completion of this unit, students will be able to:

Understand basic knowledge regarding managerial accounting and the relationship between managerial accounting and management processes

Understand costs and cost behavior within the context of business organizations

Understand how Cost –Volume – Profit relationships can be used to make business decisions

Understand and use managerial accounting information in various managerial tasks, including profit planning, break-even analysis, making short-term decisions, controlling costs, and evaluating divisional performance

Understand the importance of ethical behavior of managerial accounting and make decisions in an ethical manner

Develop independent research and teamwork skills that can be used in real business environments

7 Unit contents

periods Section 1 – INTRODUCTION TO MANAGERIAL ACCOUNTING

1.1 The meaning of managerial accounting

1.2 The objectives of managerial accounting

1.3 Comparison between managerial accounting and financial accounting

1.4 Managerial accounting and ethical conduct

4

Section 2 – BASIC COST CONCEPTS AND CLASSIFICATIONS

2.1 The meaning and uses of cost

2.2 Production costs and non-production costs

2.3 Cost behavior

2.3.1 Variable cost

2.3.2 Fixed cost

2.3.3 Mixed cost

2.3.4 Methods for separating mixed costs into fixed and variable components

10

Section 3 – COST – VOLUME – PROFIT (CPV) ANALYSIS

3.1 Break-even point in units and in sales dollars

3.2 Units and sales dollars needed to achieve a target income

3.3 Multiple-product analysis

3.4 CPV analysis and risk and uncertainty

3.4.1 The margin of safety

3.4.2 The degree of operating leverage

3.5 The underlying assumptions and limitations of CVP analysis

10

Section 4 – SHORT-RUN DECISION MAKING

4.1 Short-run decision-making model

4.2 Relevant costs and benefits, in a variety of business decisions

4.2.1 Make-or-buy decisions

4.2.2 Special order decisions

4.2.3 Keep-or-drop decisions

4.2.4 Further processing of joint products

4.2.5 Product mix decisions

4.3 The use of cost in pricing decisions

10

4.3.2 Target costing and pricing

Section 5 – PROFIT PLANNING

5.1 Description of budgeting

5.2 Preparing budgets

5.2.1 Sales budget

5.2.2 Production budget

5.2.3 Direct materials purchases budget

5.2.4 Direct labor budget

5.2.5 Overhead budget

5.2.6 Ending finished goods inventory budget

5.2.7 Cost of goods sold budget

5.2.8 Selling and administrative expenses budget

5.2.9 Budgeted income statement

5.2.10 Budgeted balance sheet

10

Section 6 – STANDARD COSTING AND FLEXIBLE BUDGET

6.1 Standard costing

6.1.1 Quantity standard

6.1.2 Price standard

6.2 Variance analysis of materials and labor

6.2.1 Direct materials variance analysis

6.2.2 Direct labor variance analysis

6.3 Using budget for performance evaluation

6.3.1 Static budget versus flexible budget

6.3.2 Performance report using a flexible budget

6.4 Variance analysis of manufacturing overhead

6.4.1 Variable overhead variance analysis

6.4.2 Fixed overhead variance analysis

10

Section 7 – PERFORMANCE EVALUATION AND DECENTRALIZATION

7.1 Decentralization and responsibility centers

7.2 Measuring the performance of investment centers by using return on

investment (ROI)

7.3 Measuring the performance of investment centers by using residual income

(RI) and economic value added (EVA)

6

8 Learning resources

Text book (Compulsory): Mowen, M.M; Hansen, D.R.; and Heitger, D.L (2009), Cornerstones of Managerial Accounting, 3rd edition (International student edition), South

Western CENGAGE Learning [MHH (2009)]

Lecture handouts provided by the instructor

9 Weekly schedule

Discussing about the objectives of the unit

Discussing about the grading system for the unit

Discussing about study methods and academic skills

The unit outline

1

Section 1 – INTRODUCTION TO MANAGERIAL ACCOUNTING

The meaning and objectives of managerial accounting

Comparison between managerial accounting and financial accounting

Managerial accounting and ethical conduct

Section 2 – BASIC COST CONCEPTS AND CLASSIFICATIONS

The meaning and uses of cost

Production costs and non-production costs

MHH (2009) – Chapters

1 and 2

Exercises 2.30, 2.31, 2.46

Exercises 3.15, 3.16, 3.17, 3.18, 3.23, 3.24, 3.27, 3.33

Problems 3.39, 3.41, 3.42, 3.44

2 Section 2 – BASIC COST CONCEPTS AND CLASSIFICATIONS

Cost behavior

MHH (2009) – Chapters

1 and 2

1 and 2

4

Section 3 – COST-VOLUME-PROFIT ANALYSIS

Break-even point in units and in sales dollars

Units and sales dollars needed to achieve a target income

Multiple-product analysis

MHH (2009) – Chapter 4
Exercises 4.19, 4.20, 4.27, 4.28, 4.29,

4.38, 4.39

Problems from 4.40 to 4.47, 4.50

5

Section 3 – COST-VOLUME-PROFIT ANALYSIS

CPV analysis and risk and uncertainty

The underlying assumptions and limitations of CVP analysis

In-class exercises – Section 3

MHH (2009) – Chapter 4

6

In-class exercises – Section 3 (continue)

Section 4 – SHORT-RUN DECISION MAKING

Short-run decision-making model

Relevant costs and benefits, in a variety of business decisions

MHH (2009) – Chapter

13

Exercises 13.13, 13.14, 13.19, 13.24, 13.25, 13.26, 13.32, 13.33

Problems 13.39, 13.40, 13.42

Case 13.51

7

Section 4 – SHORT-RUN DECISION MAKING

The use of cost in pricing decisions

In-class exercises – Section 4

8

Section 4 – SHORT-RUN DECISION MAKING

In-class exercises – Section 4 (continue)

60-MINUTE MID-TERM TEST (Sections 1 – 4)

MHH (2009) – Chapter

13

9

Section 5 – PROFIT PLANNING

Description of budgeting

Preparing budgets

MHH (2009) – Chapter 9
Exercises from 9.21 to 9.30, 9.32,

9.34 to 9.39

Problems 9.46, 9.47

10

Section 5 – PROFIT PLANNING

Preparing budgets (cont’d)

In-class exercises – Section 5

MHH (2009) – Chapter 9

11 Section 6 – STANDARD COSTING AND FLEXIBLE BUDGET
MHH (2009) – Chapters
Exercises from 10.27 to 10.35

Standard costing

Variance analysis of materials and labor

Problems from 11.46 to 11.49, 11.55, 11.56, 11.58

12

Section 6 – STANDARD COSTING AND FLEXIBLE BUDGET

Using budget for performance evaluation

Variance analysis of manufacturing overhead

In-class exercises – Section 6

MHH (2009) – Chapters

10 and 11

13

In-class exercises – Section 6 (continue)

Section 7 – PERFORMANCE EVALUATION AND DECENTRALIZATION

Decentralization and responsibility centers

MHH (2009) – Chapters

12

Exercises 12.13, 12.14, 12.15

Problems 12.34, 12.35, 12.36, 12.37

14

Measuring the performance of investment centers using ROI

Measuring the performance of investment centers using RI and EVA

In class exercise section 7

MHH (2009) – Chapters

12

chapters

10 Attendance requirement

A minimum attendance of 80 percent is compulsory Attendance records will be kept This requirement may be waived subject to satisfying the conditions of the Student Academic Consideration Policy General policy and information on special consideration can be found at the Office of Academic Affairs

11 Assessment

Students are expected to complete all assessment tasks for this unit In order to pass this unit, students must (1) achieve a composite mark of at least 50% of the unit’s total marks; and (2) make

a satisfactory attempt at all assessment tasks (see the table below) Failure to complete all assessment tasks will normally result in failure of the entire unit

(1a) Individual activities

Two 30-minute mini-tests (5% each) (test dates will be advised)

10%

(1b) Group activities

Group assignment (the due date will be advised)

20%

(1c) Mid-term test (60 minutes, essay format, closed book) 20%

12 Late submission

Late assignments will receive a 10% deduction for each day they are late Assignments more than 3 days late will not be accepted Technological issues are not considered valid grounds for late assignment submission

This penalty for late submission may be waived subject to satisfying the conditions of the Student Academic Consideration Policy General policy and information on special consideration can be found at the Office of Academic Affairs

13 Plagiarism and referencing

Students are responsible for submitting original work for assessment, without plagiarizing or

amounts of quoted/cited material and minimal original content Students will receive a grade of zero for any assignments rejected for this reason

At University it is necessary to acknowledge the sources of information and ideas that you have incorporated in your assessment tasks Failure to do this thoroughly may result in accusations of plagiarism This is the academic equivalent of stealing because by not acknowledging someone else's work, you are presenting it as your own

Referencing is not only about acknowledging other people's work Accurate referencing and lists of references are beneficial when researching a topic as they allow the reader to follow up information and read further into the area In a sense, references provide readers with clues to help them explore different avenues of a topic This aspect of referencing will become more valuable to you as you progress in your studies

14 Additional information

Laptop computers are not allowed to be used during lectures

All cell phones, ipads, music players and other electronic devices must be turned off or in silent mode during lectures

Lecture slides should be printed out before classes