ACCT 130-Principles of Management Accounting-Arslan Shahid Butt-Ahsan Shamim Chaudhry PDF
ACCT 130-Principles of Management Accounting-Arslan Shahid Butt-Ahsan Shamim Chaudhry PDF
ACCT 130-Principles of Management Accounting-Arslan Shahid Butt-Ahsan Shamim Chaudhry PDF
ACCT130PrinciplesofManagementAccounting
FallSemester2015
Instructor
RoomNo.
OfficeHours
Email
Telephone
Secretary/TA
TAOfficeHours
CourseURL(ifany)
ArslanShahidButt/AhsanShamimChaudhry
TBA
TBA
[email protected]
04235608394
Secretary:MuhammadUmar/TA:TBA
TBA
http://suraj.lums.edu.pk/~pco/
COURSEBASICS
CreditHours
Lecture(s)
Recitation/Lab(perweek)
Tutorial(perweek)
3
2
Onneedbasis
Onneedbasis
Duration
Duration
Duration
75minutes
Onneedbasis
Onneedbasis
COURSEDISTRIBUTION
Core
Elective
OpenforStudentCategory
CloseforStudentCategory
Elective
COURSEDESCRIPTION
Principles of Management Accounting is a foundation level course which introduces students to basic managerial accounting
conceptsandtoolsusedbycorporatemanagersforintelligentanalysis,planning,controlanddecisionmaking.Theemphasisinthis
courseishowbasicaccountingdataconvertsintoessentialmanagementinformationthusformingthebasisfordecisionmaking
within an organization. Key topics include cost elements, cost behavior, marginal and absorption costing, budgeting, variance
analysis,relevantandirrelevantcostfordecisionmaking.
COURSEPREREQUISITE(S)
ACCT100PrinciplesofFinancialAccounting
Regularattendanceisrequiredinthiscourse.
LahoreUniversityofManagementSciences
COURSEOBJECTIVES&LEARNINGOUTCOMES
Theobjectiveofthecourseistoensurethatstudentsdevelopafunctionalknowledgeofbasicmanagerial
accountingprinciples.Thiswillinclude:
Anunderstandingofthedifferencesbetweenfinancialandmanagerialaccounting
Theabilitytocalculatecostsinbothajoborderandprocesscostaccountingsystemandunderstandthecost
flow
Anunderstandingofthetypesofcostsandhowtheybehaveinordertoconductcostvolumeprofitanalyses
Anunderstandingoftheroleandpurposeofactivitybasedcostingfordecisionmakingpurposesincludingthe
abilitytocalculatecostsunderanABCsystem
Anunderstandingofthedifferenttypesofbudgetsandtheabilitytopreparestaticandflexiblebudgets
Theabilitytoperformstandardcostvarianceanalysesandfixedandvariableoverheadvarianceanalysesand
interprettheseresults
Understandtheroleofaccountinginformationinbusinessdecisionmaking
Understand the basic design of management control system including performance measurement,
responsibilityaccountingetc.
Understandtheroleofethicsinmanagerialaccountingdecisionmaking
UNDERGRADUATEPROGRAMLEARNINGGOALS&OBJECTIVES
GeneralLearningGoals&Objectives
Goal1EffectiveWrittenandOralCommunication
Objective:Studentswilldemonstrateeffectivewritingandoralcommunicationskills
Goal2EthicalUnderstandingandReasoning
Objective:Studentswilldemonstratethattheyareabletoidentifyandaddressethicalissuesinanorganizational
context.
Goal3AnalyticalThinkingandProblemSolvingSkills
Objective:Studentswilldemonstratethattheyareabletoidentifykeyproblemsandgenerateviablesolutions.
Goal4ApplicationofInformationTechnology
Objective:Studentswilldemonstratethattheyareabletousecurrenttechnologiesinbusinessandmanagement
context.
Goal5TeamworkinDiverseandMulticulturalEnvironments
Objective:Studentswilldemonstratethattheyareabletoworkeffectivelyindiverseenvironments.
Goal6UnderstandingOrganizationalEcosystems
Objective:StudentswilldemonstratethattheyhaveanunderstandingofEconomic,Political,Regulatory,Legal,
Technological,andSocialenvironmentoforganizations.
MajorSpecificLearningGoals&Objectives
Goal7(a)DisciplineSpecificKnowledgeandUnderstanding
Objective:Studentswilldemonstrateknowledgeofkeybusinessdisciplinesandhowtheyinteractincluding
applicationtorealworldsituations(includingsubjectknowledge).
Goal7(b)Understandingthesciencebehindthedecisionmakingprocess(forMGSMajors)
Objective:Studentswilldemonstrateabilitytoanalyzeabusinessproblem,designandapplyappropriate
decisionsupporttools,interpretresultsandmakemeaningfulrecommendationstosupportthedecisionmaker
LahoreUniversityofManagementSciences
Indicatebelowhowthecourselearningobjectivesspecificallyrelatetoanyprogramlearninggoalsandobjectives.
MAPPINGOFOBJECTIVES
PROGRAMLEARNINGGOALS
ANDOBJECTIVES
Goal1EffectiveWrittenandOral
Communication
Goal2EthicalUnderstandingand
Reasoning
Goal3AnalyticalThinkingand
ProblemSolvingSkills
Goal4ApplicationofInformation
Technology
Goal5TeamworkinDiverseand
MulticulturalEnvironments
Goal6Understanding
OrganizationalEcosystems
Goal7(a)DisciplineSpecific
KnowledgeandUnderstanding
COURSELEARNINGOBJECTIVES
COURSEASSESSMENTITEM
Anunderstandingofthedifferencesbetween Quizzes,Project,FinalExams,CP
financialandmanagerialaccounting
Theabilitytoperformstandardcostvariance
analyses and fixed and variable overhead
varianceanalysesandinterprettheseresults
Understandtheroleofethicsinmanagerial
accountingdecisionmaking
LahoreUniversityofManagementSciences
Goal7(b)Understandingthe
sciencebehindthedecision
makingprocess
GRADINGBREAKUPANDPOLICY
Quizzes:25%(n2willapply)
Attendance:10%
MidtermExamination:25%
FinalExamination:40%
EXAMINATIONDETAIL
Midterm
Exam
FinalExam
Yes/No:YES
CombineSeparate:N/A
Duration:2Hours
PreferredDate:
ExamSpecifications:MCQsand/orShortQuestions
Yes/No:YES
CombineSeparate:N/A
Duration:2Hours
ExamSpecifications:MCQsand/orShortQuestions
SN.
TOPICS
SESSIONOBJECTIVES
Managerial
Accountingandthe
Business
Environment
CostTerms,
Concepts,and
Classifications
Identifythemajordifferencesandsimilaritiesbetweenfinancialandmanagerial
accounting.
Understandtheroleofmanagementaccountantsinanorganization.
UnderstandthebasicconceptsunderlyingJustInTime(JIT),TotalQualityManagement
(TQM),ProcessReengineeringandtheTheoryofConstraints(TOC).
Understandtheimportanceofupholdingethicalstandards.
Identifyandgiveexamplesofeachofthethreebasicmanufacturingcostcategories.
Distinguishbetweenproductcostsandperiodcostsandgiveexamplesofeach.
Prepareanincomestatementincludingcalculationofthecostofgoodssold.
Prepareascheduleofcostofgoodsmanufactured.
Understandthedifferencesbetweenvariablecostsandfixedcosts.
Understandthedifferencesbetweendirectandindirectcosts.
Defineandgiveexamplesofcostclassificationsusedinmakingdecisions:differential
costs,opportunitycosts,andsunkcosts.
LahoreUniversityofManagementSciences
SN.
TOPICS
SESSIONOBJECTIVES
SystemsDesign:
JobOrderCosting
CostBehavior:
AnalysisandUse
CostVolumeProfit
Relationships
VariableCosting:A
Toolfor
Management
SystemsDesign:
ProcessCosting(FIFO
Method)
ActivityBased
Costing:ATooltoAid
DecisionMaking
Midterm
ProfitPlanning
Distinguishbetweenprocesscostingandjobordercostingandidentifycompaniesthat
woulduseeachmethod.
Identifythedocumentsusedinajobordercostingsystem.
Computepredeterminedoverheadratesandexplainwhyestimatedoverheadcosts
(ratherthanactualoverheadcosts)areusedinthecostingprocess.
Applyoverheadcosttojobsusingapredeterminedoverheadrate.
Determineunderappliedoroverappliedoverhead.
Usethedirectmethodtodeterminecostofgoodssold
Understandhowfixedandvariablecostsbehaveandhowtousethemtopredictcosts.
Useascattergraphplottodiagnosecostbehavior.
Analyzeamixedcostusingthehighlowmethod.
Prepareanincomestatementusingthecontributionformat.
Explainhowchangesinactivityaffectcontributionmarginandnetoperatingincome.
Prepareandinterpretacostvolumeprofit(CVP)graph.
Usethecontributionmarginratio(CMratio)tocomputechangesincontributionandnet
operatingincomeresultingfromchangesinsalesvolume.
Showtheeffectsoncontributionmarginofchangesinvariablecosts,fixedcosts,selling
price,andvolume.
Computethebreakevenpointinunitsalesandsalesdollars.
Determinethelevelofsalesneededtoachieveadesiredtargetprofit.
Computethemarginofsafetyandexplainitssignificance.
Computethedegreeofoperatingleverageataparticularlevelofsalesandexplainhowit
canbeusedtopredictchangesinnetincome.
Computethebreakevenpointforamultiproductcompanyandexplaintheeffectsof
shiftsinthesalesmixoncontributionmarginandthebreakevenpoint.
Explainhowvariablecostingdiffersfromabsorptioncostingandcomputeunitproduct
costsundereachmethod.
Prepareincomestatementsusingbothvariableandabsorptioncosting.
Reconcilevariablecostingandabsorptioncostingnetoperatingincomesandexplainwhy
thetwoamountsdiffer.
Understandtheadvantagesanddisadvantagesofbothvariableandabsorptioncosting.
Recordtheflowofmaterials,labor,andoverheadthroughaprocesscostingsystem.
Computetheequivalentunitsofproductionusingtheweightedaveragemethod.
Prepareaquantityscheduleusingtheweightedaveragemethod.
Computethecostsperequivalentunitusingtheweightedaveragemethod.
Prepareacostreconciliationusingtheweightedaveragemethod.
ComputetheequivalentunitsofproductionusingtheFIFOmethod.
PrepareaquantityscheduleusingtheFIFOmethod.
ComputethecostsperequivalentunitusingtheFIFOmethod.
PrepareacostreconciliationusingtheFIFOmethod.
Understandactivitybasedcostingandhowitdiffersfromatraditionalcostingmethod.
Assigncoststocostpoolsusingafirststageallocation.
Computeactivityratesforcostpools.
Assigncoststoacostobjectusingasecondstageallocation.
Useactivitybasedcostingtocomputeproductandcustomermargins.
Understandwhyorganizationsbudgetandtheprocessestheyusetocreatebudgets.
Prepareasalesbudget,includingascheduleofexpectedcashcollections.
Prepareaproductionbudget.
Prepareadirectmaterialsbudget,includingascheduleofexpectedcashdisbursements
LahoreUniversityofManagementSciences
SN.
TOPICS
10
StandardCostsand
theBalanced
Scorecard
11
FlexibleBudgetsand
OverheadAnalysis
SESSIONOBJECTIVES
12
SegmentReporting
andDecentralization
13
14
TransferPricing
RelevantCostsfor
DecisionMaking
15
MaterialPlanning
(EconomicOrder
Quantity,ReOrder
LevelandSafety
Stock)
forpurchasesofmaterials.
Prepareadirectlaborbudget.
Prepareamanufacturingoverheadbudget.
Prepareasellingandadministrativeexpensebudget.
Prepareacashbudget.
Prepareabudgetedincomestatement.
Prepareabudgetedbalancesheet.
Explainhowdirectmaterialsstandardsanddirectlaborstandardsareset.
Computethedirectmaterialspriceandquantityvariancesandexplaintheirsignificance.
Computethedirectlaborrateandefficiencyvariancesandexplaintheirsignificance.
Computethevariablemanufacturingoverheadspendingandefficiencyvariances.
Understandhowabalancedscorecardfitstogetherandhowitsupportsacompanys
strategy.
Computedeliverycycletime,throughputtime,andmanufacturingcycleefficiency(MCE).
Prepareaflexiblebudgetandexplaintheadvantagesoftheflexiblebudgetapproachover
thestaticbudgetapproach.
Prepareaperformancereportforbothvariableandfixedoverheadcostsusingtheflexible
budgetapproach.
Useaflexiblebudgettoprepareavariableoverheadperformancereportcontainingonlya
spendingvariance.
Useaflexiblebudgettoprepareavariableoverheadperformancereportcontainingboth
aspendingandefficiencyvariance.
Computethepredeterminedoverheadrateandapplyoverheadtoproductsinastandard
costsystem.
Computeandinterpretthefixedoverheadbudgetandvolumevariances.
Prepareasegmentedincomestatementusingthecontributionformatandexplainthe
differencebetweentraceablefixedcostsandcommonfixedcosts.
Computereturnoninvestment(ROI)andshowhowchangesinsales,expenses,andassets
affectROI.
Computeresidualincomeandunderstanditsstrengthsandweaknesses.
Determinetherange,ifany,withinwhichnegotiatedtransferriceshouldfall.
Identifyrelevantandirrelevantcostsandbenefitsinadecision.
Prepareananalysisshowingwhetheraproductlineorotherbusinesssegmentshouldbe
droppedonretained.
Prepareamakeorbuyanalysis.
Prepareananalysisshowingwhetheraspecialordershouldbeaccepted.
Determinethemostprofitableuseofaconstrainedresourceandthevalueofobtaining
moreoftheconstrainedresource.
Prepareananalysisshowingwhetherjointproductsshouldbesoldatthesplitoffpointor
processedfurther.
CalculatingEconomicOrderQuantity,ReOrderLevelandSafetyStock
Usingtheaboveinformationinmaterialplanningoftheorganization
LahoreUniversityofManagementSciences
TEXTBOOK(S)/SUPPLEMENTARYREADINGS
ManagerialAccounting,12thedition,Garrison,Noreen,&Brewer,McGrawHill.
Furthersupplementarymaterialwillbeprovidedduringthedurationofthecourse.