The University of Texas at Dallas School of Management Instructor: COST MANAGEMENT SYSTEMS [AIM 3341-501] Fall 2005 Jiangxia Liu Office: SOM 4.421 Phone: (972) 883-4442 E-mail: jxl010300@utdallas.edu Office Hours: Wednesday 2:00-3:00 PM, or by appointment Class meetings: TR 5:30 6:45 PM (SOM 2.103) Required Text: Title: Cost Accounting: A Managerial Emphasis, 11th Edition Authors: Horngren, Foster, and Datar Publisher: Prentice Hall Overview and Objectives This course emphasizes the use of accounting information for internal planning and control purposes, as opposed to the external disclosure focus of financial accounting. The course builds upon the material from AIM 2302, Introduction to Cost Management. It is assumed that you have a thorough understanding of the major concepts from AIM 2302. It is also assumed that you have understanding of double-entry accounting. We will cover the mechanics of cost accounting, the design of internal accounting systems for different types of firms and manufacturing processes, and the role of management accounting in firms. The course has two major objectives: (1) To develop an understanding of alternative methods of collating and preparing internal accounting information; and, (2) to examine how this information is used in organizations for decision-making, production management,
product design and pricing, and for motivating and evaluating employees. Unless you understand managerial accounting, you cannot have a thorough understanding of a company s internal operations. What you learn in this course will help you understand the operations of your future employer (and enable you to be successful at your job), and help you understand other companies you encounter in your role as competitor, consultant, or investor. Course Organization This course will rely on problem solving as the main pedagogical tool. A typical class session will involve a review of some of the suggested homework problems that draw on prior class sessions followed by the introduction of new concepts and application of these new concepts. In addition to understanding what is discussed in the class and the class handouts, you also need to read the textbook to reinforce the concepts discussed in the class. This can be done effectively, only if you read the textbook on an ongoing basis without waiting for the exams. Various aspects of this course have been designed to help you with the learning process. I am giving below a set of guidelines, which may help you to get the maximum benefit out of this course. Of course, the learning process is highly individualistic and hence you may want to explore and find out what works for you the best. (i) Textbook: The textbook is meant to supplement the class discussion. I will not discuss, in class, everything in the textbook. Nor should you expect to find everything that was discussed in the class in your textbook. I would strongly encourage you to read the textbook chapters ahead of the class. This will familiarize you with what we will discuss in the class and put you in a better position to participate in class discussions. For each session, I have indicated the chapter from the textbook that will be covered in the class. Please spend at least an hour reading the textbook before each class. (ii) Practice Problems: Pay attention to the quiz problems, problems discussed in the class, and suggested homework problems. You will find the list of suggested homework problems in class notes. Detailed solution will be provided for all the quiz problems and suggested homework problems. It is a good idea to try to solve as many problems as possible. Just like any mathematics course, the more problems you solve, and the better you are in an accounting course. I will not collect suggested homework problems. However, completing suggested homework problems will be very helpful for your success in quizzes and exams. 2
(iii) Quiz: You will have two short in-class quizzes. The quiz problems will be based on class notes and suggested homework problems. Each quiz will count 5% of your course grade. (iv) Exams: You will have three exams in this course. You are not allowed to refer to textbook or class notes during the exams. If you miss an exam without my prior permission, you will be given a grade of zero. If you have any valid reason for missing an exam, you have to get in touch with me before the exam (through phone or e-mail) in order to make alternate arrangements. If you have a personal illness, a note from your physician should support it. As a general rule, no make up exam will be given. The exams will determine 85% of your course grade. (v) Class notes: I will post a copy of my lecture notes in WebCt. You are required to download the notes and bring a printout to the class. This will save a lot of time that may otherwise be spent on notes taking. My lecture notes are not intended to be self-explanatory and they are probably not much of use unless you attend the lectures. The list of suggested homework problems will be in the class notes. (vi) Participation: The incentive and reward for preparing and attending the class is 5% of your final course grade. (vii) Grading Scheme: Your course grade will be computed based on the following scheme: In Class Quiz 2 x 5% 10% Exam I 25% 25% Exam II 30% 30% Exam III 30% 30% Participation 5% 5% Total 100% The final letter grade will be determined based on your combined score from quizzes, exams, and participation. 3
Academic Honesty All students in the class are expected to behave in accordance with academic integrity. Strict adherence to the Policy on Cheating as stated in the Regents Rules and Regulations, part one, Chapter VI, Section 3, Subsection 3.2, subdivision 3.22 is expected. This policy reads: Students are expected to be above reproach in all-scholastic activities. Students who engage in scholastic dishonesty are subject to disciplinary penalties, including the possibility of failure in the course and dismissal from the university. Scholastic dishonesty includes but is not limited to cheating, plagiarism, collusion, the submission for credit of any work or materials that are attributable in whole or in part to another person, taking an examination for another person, any act designed to give unfair advantage to a student or attempt to commit such acts. 4
Class Schedule Lecture Date Topic Chapter PART I: PRODUCT COSTING R, 8/18 Introduction to Management Accounting (I) Chapter 1 1 T, 8/23 Introduction to Management Accounting (II) R, 8/25 Cost Management Concepts Chapter 2 T, 8/30 Cost Behavior 2 R, 9/1 Cost Flow T, 9/6 Cost -Volume-Profit Analysis (I) Chapter 3 3 R, 9/8 Cost -Volume-Profit Analysis (II) 4 T, 9/13 Quiz I and Costing System Chapter 4 R, 9/15 Job Costing (I) Chapter 4 5 T, 9/20 Job Costing (II) and Review Lectures 1-5 R, 9/22 Exam I T, 9/27 Process Costing (I): Equivalent Unit Chapter 17 R, 9/29 Process Costing (II): Weighted- average Method 6 T, 10/4 Process Costing (III): FIFO Method PART II: COST ALLOCATION 7 R, 10/6 Cost Allocation Chapter 14 T, 10/11 Support Department (I) Direct Method Chapter 15 8 R, 10/13 Support Department (II) Step Down and Reciprocal T, 10/18 Quiz II and Activity-based Costing System (I) Chapter 5 9 R, 10/20 Activity -Based Costing System (II) T, 10/25 Review Lectures 6-9 R, 10/27 Exam II T, 11/1 Joint Cost Allocation (I) Chapter 16 10 R, 11/3 Joint Cost Allocation (II) PART III: PLANNING, CONTROL, and PERFORMANCE MEASUREMENT 11 T, 11/8 Master Budget Chapter 6 R, 11/10 Flexible Budget and Budget Variance (I) Chapter 7 12 T, 11/15 Flexible Budget and Budget Variance (II) 13 R, 11/17 Overhead Variance Chapter 8 T, 11/22 Review of Lectures 10-13 R, 11/24 Holiday, no class. T, 11/29 Exam III Note: This is a tentative schedule. Changes, if any, will be announced in class and will be put on WebCt. You are responsible for all announcements made in the class. 5