1
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:
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.
2
7. Unit contents
CONTENTS
Teaching
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
4.3.1. Cost-based pricing
10
3
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
4
8. Learning resources
Text book (Compulsory): Mowen, M.M; Hansen, D.R.; and Heitger, D.L. (2009),
Cornerstones of Managerial Accounting, 3
rd
edition (International student edition), South
Western CENGAGE Learning. [MHH (2009)].
Lecture handouts provided by the instructor.
5
9. Weekly schedule
Week
Activities Reading/References Homework
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
3
In-class exercises – Section 2 MHH (2009) – Chapters
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
6
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.
7
Standard costing
Variance analysis of materials and labor
10 and 11 Problems 10.41, 10.43.
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
15
Revision and exam preparation
MHH (2009) – All above
chapters
8
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.
Assessment criteria Contribution
1. Progress performance
50%
(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%
2. Final exam (120 minutes, essay format, closed book)
50%
Total 100%
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
cheating. Assignments will be rejected if they include plagiarized content or contain excessive
9
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.