ACCT 220: Management Accounting I Fall 2009

Size: px

Start display at page:

Download "ACCT 220: Management Accounting I Fall 2009"

Bertha Freeman
5 years ago
Views:

1 HONG KONG UNIVERSITY OF SCIENCE & TECHNOLOGY DEPARTMENT OF ACCOUNTING ACCT 220: Management Accounting I Fall 2009 Instructor Instructor s Contact Office Hours Kirill E. NOVOSELOV, Ph.D. Rm. 4340, ackn@ust.hk Wednesdays 3:00 5:00 and by appointment Lecture Time & Venue Tue. & Thur., 11:00 12:50 (L3) Rm Tue. & Thur., 13:00 14:50 (L4) Rm Teaching Assistant Ms. Ann Y. W. CHAN, acann@ust.hk Course Web Site Accessible via LMES portal: I. Course Description Management accounting is concerned with the generation, communication, and interpretation of internal information, both financial and non-financial, for operational and strategic decision-making purposes. This course is intended to introduce you to management accounting by developing your ability to prepare and interpret accounting information, bearing in mind the limitations inherent in this information. We will study a mix of often-used accounting tools and techniques and their fit with various business functions such as operations, information technology, and human resources. II. Course Objectives Upon the completion of this course, you should be able to 1. Explain the role of managerial accounting information in the decision-making process of business and non-for-profit organizations. 2. Apply the analytical and technical skills developed in the accounting classes you have taken to date to prepare accounting records and reports, interpret them, and explain their limitations. 3. Discuss the fundamental principles underlying managerial accounting in the context of the tools and techniques that are covered in the course. 4. Evaluate available accounting information and provide recommendations with respect to a business decision. The course will also provide you with opportunities to 1. Master your communication skills and, in particular, produce professional-quality business documents and deliver professional-quality presentations. 2. Develop effective team work and leadership skills. 3. Explain the role played by accountants in providing and ensuring the integrity of financial and related information. 4. Integrate knowledge of core business functions to solve business problems. III. Course Materials 1. Required textbook: Garrison, R. H., E. W. Noreen, and P. C. Brewer. Managerial Accounting, 12 th Ed. McGraw Hill, Lecture notes: to be posted on the course web site. 3. Cases: will be on reserve in the Library. Page 1 of 5

2 IV. Summary of Intended Learning Outcomes After completing this course, you should be able to: 1. Discuss the role of management accounting (Chapter 1) 2. Categorize costs (Chapter 2) 3. Discuss costing methods and their results (Chapters 3 and 4) 4. Perform cost-volumeprofit analysis (Chapters 5 and 6) 5. Discuss variable costing and absorption costing (Chapter 7) a) Identify the major differences and similarities between financial and managerial accounting. b) State the three major managerial activities and discuss the role that managerial accountants (finance professionals) play in carrying out these activities. c) Explain why it is imperative for businesses and non-for-profit organizations to uphold highest ethical standards. a) Distinguish among the following cost classifications: i. Manufacturing vs. non-manufacturing costs; ii. Product vs. period costs; iii. Fixed vs. variable costs; iv. Direct vs. indirect costs. b) Prepare a schedule of cost of goods manufactured. c) Define and give examples of costs used in making decisions: differential costs, opportunity costs, and sunk costs. a) Compare and contrast process costing and job-order costing and identify companies that would use each costing method. b) Use job-order costing to calculate the value of the work-in-process inventory and to prepare the schedules of cost of goods manufactured and cost of goods sold. c) Compute under-applied and over-applied overhead cost and prepare the journal entry to close the balance in Manufacturing Overhead to the appropriate accounts. d) Record the flow of materials, labor, and overhead through a process costing system and assign product costs using the weighted-average and FIFO methods. a) Explain the assumptions underlying cost-volume-profit analysis (CVP). b) Use CVP to make operating decisions and to forecast the likely effect of changing in business environment on the firm s profitability. c) Explain the notion of operating leverage, compute the degree of operating leverage for a particular level of sales, and explain how it can be used to forecast the firm s profitability. a) Compare and contrast variable and absorption costing in respect of profit reporting and inventory valuation. Explain the advantages and shortcomings of both costing methods. b) Prepare income statements using both variable and absorption costing and reconcile the differences in net operating income. Page 2 of 5

3 6. Discuss activity-based costing (Chapter 8) 7. Explain the purpose of forecasts, plans, and budgets (Chapter 9) 8. Discuss standard costing methods (Chapters 10 and 11) 9. Discuss concepts of costs and revenue relevant to decision making (Chapter 13) a) Discuss activity-based costing as compared with traditional variable and absorption costing methods, including its relative advantages and shortcomings. b) Use activity-based costing to assign costs to various cost objects, including products and customers. a) Explain why organizations prepare forecasts and plans. b) Explain the purpose of budgets, including planning, communication, coordination, motivation, and control, and how these may conflict. c) Prepare a master budget based on projections and managerial targets. a) Apply standard costing methods and explain why and how standards are set. b) Compute and interpret material, labor, fixed, and variable overhead variances. c) Prepare a flexible budget and explain the advantages of flexible budgets over static budgets a) Discuss the principles of decision-making including the identification of relevant cash flows and their use alongside nonquantifiable factors. b) Discuss the possible conflicts between cost accounting for profit reporting and inventory valuation and information required for decision-making. c) Analyze the typical managerial decisions, including pricing and product mix decisions. V. Course Policies 1. ACCT 220 will have two class sessions per week that will each blend lecture, problem solving, and discussion. The class will typically begin with a lecture introducing the topic. Then, we will review problems that relate the issues raised in the lecture to a particular setting. I expect that you will come to each class adequately prepared by reading the appropriate chapter of the text. 2. Attendance and participation. I encourage you to attend all classes and participate in discussions during classes. Since the topics that are covered in class are very practical, you can often think of an example based on your own experience. All of us your fellow students and me benefit from insightful comments and thought-provoking questions. On the other hand, those who chat in class are doing a disservice to everyone present. 3. In-class group exercises. There are approximately ten group exercises to be completed in class. Group exercises provide a setting where you can ask your fellow students and, better yet, explain to them how to solve a problem. I will collect one answer per group; all group exercises are equally weighted. Subject to time availability, I may select a group to present their solution. 4. Homework. Solving problems is the best way of mastering the material covered in class. I encourage you to solve at least the recommended problems (see the Course Schedule on p. 5) but will not collect them. I will make the solutions to recommended problems available in the course of the semester. Page 3 of 5

4 5. Case studies. Case studies and presentations will take place near the end of the semester. Each group of 3 5 students will be assigned one case and required to analyze the case, submit a written report (which will account for 50% of the case study mark), and present the case analysis in class (the remaining 50%). Each case presentation will be for about 45 minutes, including questions and discussion. The details will be provided later in the semester. 6. Examinations. An evening mid-term examination is scheduled on Friday, 16 October 2009 (7:00 9:00 p.m.). The final examination is not cumulative; that is, it will not include topics covered in the mid-term examination. It is expected that all students will take the exam at the scheduled time. There will be no make-up examination for the mid-term. If absence from the examination is caused by an unexpected medical emergency, then the marks earned on the final examination may be adjusted to replace the missing mid-term grade. A student foreseeing unavoidable absence may seek approval from the instructor for similar arrangement. Any other absent students will be assigned zero marks for the mid-term exam. 7. Academic honesty. It is important that students follow university regulations on academic integrity and honesty. Academic dishonesty will not be tolerated and will be dealt with in accordance with university rules, which can be accessed at VI. Assessment Plan In-class group exercises 15 Case analysis and presentation 20 Midterm Examination (October16) 30 Final Examination 35 TOTAL POINTS 100 Note: There will be no extra credit assignments under any circumstance. VII. Getting Help and Staying in Touch I will post course-related information at the course web site on the LMES portal ( There are pre-scheduled office hours for the course. I suggest that you either visit during these office hours or make an appointment. You can ask substantive (as opposed to procedural) questions by e- mail but please keep in mind that the questions pertaining to the course material should be preferably asked in class. Page 4 of 5

5 VIII. Tentative Course Schedule Date Subject Recommended Problems Sep. Oct. Nov. Dec. 1T 3R 1 Introduction: The role of managerial accounting (Ch. 1 and 2) 8 T 2-11, 2-28, 2-23, 2-14, 2-19 Costs classifications (Ch. 2) 10 R 15 T Job-order costing (Ch. 3; skip 3-9, R Appendix 3A) 3-15, 3-18, T 4-11, 4-18 Process costing (Ch. 4; skip Appendix 4B) 24 R 4-27, 4-24, T Cost behavior (Ch. 5; skip Appendix 5A) 1R No class: National Day 6 T 6-14, 6-21 Cost-volume-profit analysis (Ch. 6) 8R 6-19, 6-26, T 7-9, 7-10 Variable costing (Ch. 7) 15 R 7-12, 7-14, 7-13, F Mid-term exam over chapters T Activity-based costing (Ch. 8; skip 8-8, R Appendix 8A) T 9-13, 9-16 Profit planning and budgeting (Ch. 9) 29 R 9-15, 9-19, T Standard costs and the Balanced Scorecard 10-14, R (Ch. 10) 10-16, 10-18, T Flexible budgets and overhead analysis 11-17, R (Ch. 11) 11-12, 11-24, T Relevant costs and decision making 13-11, 13-15, R (Ch. 13) 13-18, 13-20, T Case Presentations 26 R Case Presentations 1T Case Presentations 3R Case Presentations Final Exam: TBA 1 R stands for Thursday Page 5 of 5

University of Waterloo School of Accountancy. AFM 102: Introductory Management Accounting. Fall Term 2004: Section 4

University of Waterloo School of Accountancy AFM 102: Introductory Management Accounting Fall Term 2004: Section 4 Instructor: Alan Webb Office: HH 289A / BFG 2120 B (after October 1) Phone: 888-4567 ext.