Department of Accounting

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1 Department of Accounting ACC Managerial/Cost Accounting (for MPAs) Syllabus Fall 2005 Unique # 02590; TTh 8:00 9:30 Classroom: UTC Professor Robert G. May office CBA 4M.244 phone (Accounting Department ) bob.may@mccombs.utexas.edu office hours TTh 2:30-4:00, and by appointment Course Materials Text: Cost Accounting: a Managerial Emphasis, 12/e Charles Horngren, Srikant Datar and George Foster Supplemental Materials: Cases and Readings for ACC (available at UT Copy Center, 3 rd floor GSB) Blackboard Site Logon: Will Include: Log in and select this course. Lecture slides; case and problem solution slides (after covered in class); some case and problem materials; some helpful Excel files; old exams; etc. Course Objectives The objective of this course is to give you a basic competence in managerial/cost accounting, consistent with your goal of earning a Masters in Professional Accounting Degree (from a top program). There are two broad phases of the course: 1) Cost accounting and decision making; and 2) financial evaluation and financial (and other) control systems. The 1999 Practice Analysis of Management Accounting, identified the following five key traits for success in the role of the new managerial/cost accountant: 1. The ability to communicate well, orally and in writing; 2. The ability to work on a team; 3. Analytical skills; 4. A solid understanding of accounting; and

2 ACC Syllabus 2 5. A solid understanding of how a business functions. Clearly, in managerial accounting practice today, facility with the numbers is necessary but not sufficient for success. Our objective in this course is to begin developing all five of these perspectives and skills, with a special emphasis on measuring and using data about the costs (and revenues) of products and services. Grading Beginning in the Fall 2005 semester the University of Texas at Austin instituted plus/minus grading for graduate students. Department of Accounting policy requires that a grading scale including pluses and minuses be used for all graduate Accounting classes. University policy continues to prohibit use of plus/minus grading for undergraduate students. Department of Accounting policy requires that grades for undergraduate students enrolled in graduate Accounting classes will be determined by dropping the plus or minus (if any) from their letter grade. Your performance in this course will be evaluated under the following model: Midterm examination 25% Cumulative final exam 45% Capstone case project in costing and decision making* 10% Capstone case project in evaluation and control* 10% Participation and preparation 10% 100% *Half the credit for this case projects will be awarded for an individual assignment component (no collaboration with colleagues allowed) and half will be awarded for a group assignment component. I will set up groups for each of the case projects. All work during examinations and on the individual assignments within the case projects is to be done on a strictly individual basis, with no discussion, exchanges of information or files or any other form of interaction with classmates, other students, past or current, or other sources outside the course, its instructor and TA. SEE POLICY ON SCHOLASTIC DISHONESTY BELOW. Intellectual Property You will be given access to copyrighted readings, problem solutions, case discussion presentations and lecture notes. These are for your use and only your use in this class. Along with your own homework solutions and class notes, they are not to be passed on to subsequent classes or individual students. SEE POLICY ON SCHOLASTIC DISHONESTY BELOW. Policy on Scholastic Dishonesty The Department of Accounting has no tolerance for acts of scholastic dishonesty. The responsibilities of both students and faculty with regard to scholastic dishonesty are described in detail in the department's Policy Statement on Scholastic Dishonesty in the MPA Program and the Professional Program in Accounting. By teaching this course, I have agreed to observe all of the faculty responsibilities described in that document. By enrolling in this class, [whether or not you are an MPA/PPA student], you have agreed to observe all of the student responsibilities described in that document. If the application of that Policy Statement to this class and its assignments is unclear in any way, it is your responsibility to ask me for clarification. A copy of the complete Policy Statement is available from the MPA/PPA program office or on-line at Assistance for Students with Disabilities The University of Texas at Austin provides upon request appropriate academic accommodations for qualified students with disabilities. For more information, contact the Office of the Dean of Students at , TTY.

3 ACC Syllabus 3 Use of Blackboard and Student Privacy Other than this syllabus and examinations, materials for this course generally will not be handed out in the form of paper copies. Instead, they will be available through the electronic course organizer, Blackboard, supported by the University. You should log in using a web browser by going to You will be required to enter your UTEID and password. After successfully logging in, you will see a page displaying your courses. Select this course. From there you should be able to navigate the subsequent page(s) by following what you see on screen. Besides readings and cases that you will need before classes, lecture presentations in PowerPoint will be posted on Blackboard before their presentation and case discussions will be posted after they are used in class. You will also be expected to use Blackboard s Digital Drop Box exclusively to turn in your financial statement analysis projects. Site activities could also include exchanging , engaging in class discussions and chats, and exchanging files. Unless I am supplied with access to another class list, I will be using the capabilities of Blackboard to communicate with you. Therefore, it is essential that I be able to send you s in this way. WHY MIGHT YOU NOT RECEIVE MY S? 1. Students who do not want their names included in electronic class rosters restrict their directory information through the Office of the Registrar. If you restrict your directory information, it is your responsibility to let me know so that I can include you in class communications. 2. Many popular clients, such as Hotmail, Yahoo and even AOL, may identify from Blackboard as junk mail and then either automatically delete the or move it to a junk mail folder. In Hotmail, students can fix this problem by changing their options by turning off their junk mail filter and setting their junk mail deletion option to delayed. If students have problems receiving Blackboard s in any other program, they should check their user preferences or options for settings regarding the handling of junk . HOW CAN STUDENTS CHANGE THEIR ADDRESS IN BLACKBOARD? How does the information on a student's address get entered into Blackboard? For students who are not employed by the University, the address used by Blackboard is the same as the information in the UT Directory. For students who are employees of the University, faculty, and staff members, the address used by Blackboard is the same as the information entered in the employee's biographical information. Users can change their addresses displayed in Blackboard by using UT Direct. Changes made to user information may take 1-2 days before updating in Blackboard. Midterm Exam The Midterm examination will be a three-hour examination administered on Thursday evening, October 20, If you have a conflict with that date or time, you need to notify me and explain the conflict. If your conflict is compelling, alternative arrangements will be made for you to take the examination. You must notify me within two weeks of the start of class, if you have such a conflict. Capstone case projects You will do two capstone case projects, Sloan Styles to cap off the first half of the course (costing and decision making) and Compagnie du Froid to cap off the second half (evaluation and control).

4 ACC Syllabus 4 For each of these cases, each student will turn in an individual analytical/technical assignment. Also for each of these cases, you will turn in a group assignment that addresses decision making issues. Detailed instructions for these two projects will be posted on Blackboard. Participation and Preparation In this class, we will follow a modified case-method style, which I have found to be most effective for students who must learn technical content and apply it in a managerial context. The modified case method relies heavily on class participation, but with more guidance through specific questions than the pure case method. Students will be active participants in problem and case discussions, data from the case or problem, tentative solutions and approaches, analyses, and recommendations. This involves the preparation of the problems and cases and reading assignments before class and the active sharing of your insights during class. My role is primarily to facilitate your analysis and discussion. I will not collect or grade homework. Homework problems and cases are provided to support your learning. For warm-up problems (denoted with an * in the Study Guide), solutions are available on the class Blackboard site. If you are having trouble understanding homework problems or solutions, please discuss it with your TA first. Come to me (on a timely basis), if you are having substantial difficulty learning in the course. To prepare for class, you must read the assigned readings carefully and try to understand the accounting techniques described in them. You must also attempt to answer all of the problem or case questions in your own way in advance so that you will be prepared for class discussion and will learn by doing. This is essential when specific technical knowledge has a bearing on solutions to managerial decisions. Do not obsessively pursue the right answer or format your preparations to look nice. Such pursuits will waste your time and contribute nothing. With regard to your class participation grade, showing up for class (on time) and being attentive counts the most. However, I will reward with additional credit those who make regular, constructive contributions to discussions. Constructive contributions include so-called dumb questions as long as they do not reflect serious lack of preparation. Using the text The textbook is excellent and you are responsible for all text chapters assigned. In the grand scheme of the course, the text gives you the broadest perspective down to the most detail about the subject matter. You need to read it thoroughly and either highlight it (judiciously) or outline it. The reading will generally be your introduction to a new topic and you need to read before you jump into problems and cases. My occasional lectures and mini-lectures and the discussion problems and cases covered in class, narrow the focus to the skills and issues I judge to be most important in this course. This narrower band of skills and issues will help you focus your studies for examinations. In re-studying the text, you can probably screen out other technical know-how, but not the perspective of the text on topics we cover in the cases and problems discussed in class.

5 ACC Syllabus 5 Study Guide THU September 1, 2005 Introduction to the course. Product costing and GAAP. READ CHAPTER(S) 1. Managerial purposes of costing. Broader purposes of cost accounting. TUE September 6, 2005 Cost terminology. READ CHAPTER(S) 2 and 9 Part Cost purposes. One (only). Inventory costing systems. 2-30* and Implications of full-costing for GAAP purposes. Western Chipsets, Inc. (A) and (B) THU September 8, 2005 Introduction to job costing. Job-costing systems. READ CHAPTER(S) 4. Tracing direct costs and 4-24 Allocating indirect costs. TUE September 13, 2005 Job-costing applications. READ CHAPTER(S). Introduction to activity-based costing and 4-40 THU September 15, 2005 Activity analysis. Activity cost pools. READ CHAPTER(S) 5. Cost drivers. 5-20* and 5-40 Allocating costs based on cost drivers. TUE September 20, 2005 Activity-based costing applications. READ CHAPTER(S) 12. Product-line profit analysis. Pricing decisions. Destin Brass Products Co. THU September 22, 2005 Activity-based costing applications. Costing and pricing to match strategy. Mass production versus mass customization. TUE September 27, 2005 Activity-based costing applications. Costing and pricing to match strategy. Customer profitability analysis. Kanthal (A) Siemens Electric Motor Works (A) READ CHAPTER(S) 14 through p. 508.

6 ACC Syllabus 6 THU September 29, 2005 Support department costs. READ CHAPTER(S) 15. Common costs , (repeated iteration method only) and TUE October 4, 2005 Determining how costs behave. READ CHAPTER(S) 10. Basic cost functions. Estimating cost functions. Overheated Overhead Relationship to activity-based costing. (available on Blackboard) THU October 6, 2005 Cost behavior and related terminology. Cost (revenue) modeling of decisions. READ CHAPTER(S) 3 and 11. Introduction to linear cost-volume-profit (CVP) problems. Introduction to short-run decisions. TUE October 11, 2005 Introduction to short-run decisions. Cost-volume-profit analysis. Relevant cost and revenue analysis. CHAPTER(S) 3 and 11. To be announced. THU October 13, 2005 Applications of short-run decisions. CHAPTER(S) 11. Special orders. Baldwin Bicycle Company TUE October 18, 2005 READ CHAPTER(S) 9, Part Two. Applications of short-run decisions. Discontinuing a product line. Bridgeton Industries THU October 20, 2005 CLASS WILL NOT MEET AT REGULAR TIME. THREE-HOUR MIDTERM WILL BE GIVEN FROM 6:00PM to 9:00PM. CLASS WILL BE CANCELLED ON NOVEMBER 10 TO COMPENSATE FOR EXTRA ONE AND A HALF HOURS. TUE October 25, 2005 Applications of short-run decisions. REVIEW CHAPTER(S) 11. Allocating scarce capacity. Lehigh Steel

7 ACC Syllabus 7 THU October 27, 2005 Introduction to master budgeting & responsibility accounting. The master budget sequence. Pro-forma financial statements. Testing budget feasibility, especially cash adequacy. TUE November 1, 2005 Applied master budgeting and cash planning. THU November 3, 2005 Introduction to flexible budgets and cost variances. Flexible budgets and responsibility accounting. Standard costs. Direct cost variances. TUE November 8, 2005 Flexible budgets and overhead. Standard variable overhead. Variable overhead variances. Fixed overhead allocation and fixed overhead variances. THU November 10, 2005 READ CHAPTER(S) (We will do a cash budget in class.) Hanson Ski Products READ CHAPTER(S) * and 7-32 READ CHAPTER(S) *, 8-29 and Regular class cancelled in compensation for evening midterm examination. TUE November 15, 2005 Sales revenue analysis. READ CHAPTER(S) 14 from Sales variances. p Responsibility for sales variances and TUE November 17, 2005 Applied flexible budgeting and variance analysis. Cost center performance. Profit center performance. Investment center performance. Waltham Motors Division THU November 22, 2005 Transfer pricing. Micro-economic guidelines. Managerial accounting guidelines. Applied transfer pricing. TUE November 29, 2005 Managing the enterprise. Control systems. Levers of control READ CHAPTER(S) 22. Stone Group Corp. READ Robert Simons, Control in an Age of Empowerment, Harvard Business Review OnPoint, Automation Consulting Services

8 ACC Syllabus 8 THU December 1, 2005 Capstone control and evaluation case. TUE December 6, 2005 Capstone control and evaluation case. THU December 8, 2005 Compagnie du Froid, S.A. Compagnie du Froid, S.A. COURSE REVIEW FINAL EXAMINATION

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