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BUS 5431 Managerial Accounting

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


  • 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


  • 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)


  • Common Cost Behavior Patterns
  • Cost Estimation Methods
  • Cost-Volume-Profit Analysis
  • Multi-Product Analysis
  • Operating Leverage
  • Constraints

Week 4

Lecture: Variable Costing


  • 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)


  • 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


  • 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


  • 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


  • 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