Course Description
Focuses on internal reporting to managers for use in planning and control, in making nonroutine decisions and in formulating major plans and policies. Covers cost-volume-profit relationships, flexible budgets and standards, job order and process cost, and cost allocation and accumulation.
Week 1
Lecture: Introduction
Outcomes
- The goal of managerial accounting
- Cost terms used in discussing planning, control and decision making
- Decision making relies on incremental analysis
- The information age and managerial accounting
- Ethical considerations in managerial decision making
- Cost classifications for manufacturing firms
- Product cost information in financial reporting and decision making
- Balance sheet presentation of product costs
- Flow of product costs in accounts
- Income statement presentation of product costs
- Types of costing systems
- Overview of job costs and financial statement accounts
- Job-order costing systems
- Allocation of overhead
Week 2
Lecture: Process Costing
Outcomes
- Product and cost flows
- Calculating unit cost
- Calculating and applying cost per equivalent unit
- Production cost report
- Process costing and incremental analysis
Week 3
Lecture: Cost-Volume Profit Analysis (CVP)
Outcomes
- Common Cost Behavior Patterns
- Cost Estimation Methods
- Cost-Volume-Profit Analysis
- Multi-Product Analysis
- Operating Leverage
- Constraints
Week 4
Lecture: Variable Costing
Outcomes
- Full (absorption) and variable costing
- Effects of production on income for full versus variable costing
- Benefits of variable costing for internal reporting
Week 5
Lecture: Cost Allocation and Activity-Based Costing (ABC)
Outcomes
- Purposes of cost allocation
- Process of cost allocation
- Allocating service department costs
- Problems with cost allocation
- Activity-based costing
- Activity-based management
Week 6
Lecture: Using Cost Information for Decision Making
Outcomes
- Incremental analysis
- Analysis of decision faced by managers
- Decisions involving joint costs
- Qualitative considerations in decision analysis
- Theory of constraints
- The profit maximizing price
- Pricing special orders
- Cost-plus pricing
- Target costing
- Capital budgeting decisions
- Evaluating investment opportunities – NPV & IRR
- Considering the value of soft benefits required in investment decisions
- Estimating the required rate of return
- Additional cash flow considerations
- Simplified approaches to capital budgeting
- Conflicts between performance evaluation and capital budgeting
Week 7
Lecture: Budgets and Variance Analysis
Outcomes
- The use of budgets in planning and control
- Developing the budget
- The master budget
- Budgetary control
- Investigating budget variances
- Conflict in planning and control uses of budgets
- Evaluation, measurement and management behavior
- Standard costs
- A general approach to variance analysis
- Responsibility accounting and variances
Week 8
Lecture: Performance Evaluations and Analyzing Financial Statements
Outcomes
- Why firms decentralize
- Cost centers, profit centers and investment centers
- Evaluating with ROI
- Evaluating with EVA
- Using a balanced scorecard
- Why managers analyze financial statements
- The three basic financial statements
- Horizontal and vertical analysis
- Earning management
- Other sources of information on financial performance
- Ratio analysis
The course description, objectives and learning outcomes are subject to change without notice based on enhancements made to the course. May 2011
