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BUS 5650 Strategic Cost Management

Course Description

Uses case studies to analyze approaches to managerial accounting. Covers the application of decision and control models, planning and control under conditions of uncertainty, ethics, and current issues in the development and practice of managerial accounting.

Week 1

Lecture:  Cost Management Information


  • Explain how cost information is used in different types of organizations
  • Identify the four functions of management
  • Understand the use of cost information in support of different strategies
  • Describe the influence of modern management techniques on cost management
  • Allocate shared support costs to production departments
  • Allocate shared cost to products that result from a single process

Week 2

Lecture:  The Flexible Budget and Standard Costing
Lecture:  Static and Flexible Budget Variances


  • Identify and explain control systems and uses of standard costing
  • Distinguish between effectiveness and efficiency
  • Construct a master budget
  • Develop a flexible budget
  • Calculate direct input variances

Week 3

Lecture:  Flexible Budget: Analyzing Factory Overhead


  • Distinguish between the control purposes and the costing purposes of standard costing for overhead
  • Calculate, explain and record the overhead variances

Week 4

Lecture:  Operational Productivity


  • Explain, calculate and use sales and productivity variances

Week 5

Lecture:  Quality and Profitability


  • Discuss the role of quality in profitability
  • Describe the elements of quality
  • Compare and contrast the major quality initiatives
  • Understand how accounting supports the financial and non-financial measures used to assess quality

Week 6

Lecture:  Performance Evaluation


  • Understand the relationship between management control and performance evaluation
  • Identify the objectives of management control
  • Identify the types of control systems
  • Explain the application of control to cost centers, revenue centers and profit centers
  • Understand how the balanced scorecard supports strategic cost management

Week 7

Lecture:  Strategic Investment Units and Transfer Pricing


  • Describe the function of a strategic investment unit
  • Discuss implementation of appropriate transfer prices
  • Calculate return on investment, residual income and economic value added, and use them to evaluate the performance of a business unit

Week 8

Lecture:  Management Compensation, Business Analysis and Business Valuation


  • Describe the common types of management compensation
  • Appreciate the role of tax planning and financial reporting in management compensation
  • Understand and describe the use of balanced scorecard, financial ratio analysis economic value added, discounted cash flow and multiples-based valuation in establishing the value of the enterprise as a whole

The course description, objectives and learning outcomes are subject to change without notice based on enhancements made to the course. November 2011