ACCT 1110 Syllabus

Subject Code

ACCT

Course Number

1110

Course Title

Managerial Accounting

Prerequisites

ACCT 1100

Corequisites

Terms Offered

Credit Hours

Course Description

This course emphasizes the interpretation of data by management in planning and controlling business activities. Topics include managerial accounting concepts, manufacturing accounting using a job order cost system, manufacturing accounting using a process cost system, cost behavior and cost-volume-profit, budgeting and standard cost accounting, flexible budgets, standard costs and variances, and capital investment analysis and budgeting. Laboratory work demonstrates theory presented in class.

Course Outcomes

Managerial Accounting Concepts

  • Discuss managerial accounting terminology.
  • Define differences between managerial and financial accounting.
  • Define management accountability.
  • Define planning used by management.
  • Discuss managerial directing, controlling, improving, and decision making.

Manufacturing Accounting Using a Job Order Cost System

  • Illustrate similarities between manufacturing and merchandising.
  • Distinguish between cost of merchandise sold and cost of goods sold
  • Differentiate between job order and process accounting and give examples of items produced under each system.
  • Summarize the process of accounting for materials, including appropriate documentation, determination of material cost, and the journal entry to record the flow of materials into production.
  • Define factory overhead, explain the use of the factory overhead ledger, and list the major sources of charges to this account.
  • Identify and connect the controlling accounts and subsidiary ledgers normally used in job order cost accounting.
  • Record journal entries for the issuance of materials, factory labor, and factory overhead.
  • Prepare journal entries for goods completed and transferred to finished goods.
  • Prepare journal entries for the cost of goods sold.

Manufacturing Accounting Using a process Cost System

  • Establish major areas of similarities between job order and process cost accounting.
  • Break down service departments and explain the allocation of service department costs to departmental factory overhead accounts.
  • List the elements which comprise processing costs.
  • Explain the calculation of the unit processing cost.
  • Summarize the concept of equivalent units.
  • Demonstrate the computation of equivalent units of production for the month.
  • Apply the above results to the calculation of the cost of goods finished for an accounting period.
  • Show the computation of the cost of units in process at the end of the month.
  • Summarize the data on the cost of production report.
  • Record journal entries for the allocation of service department cost.
  • Record journal entries for the flow of factory costs between departments.
  • Record journal entries for the application of factory overhead and determine the amount and nature of the balances in departmental factory overhead accounts.
  • Record journal entries for routine business transactions related to manufacturing operations.

Cost Behavior and Cost-Volume-Profit Analysis

  • Define cost behavior.
  • Define cost-volume-profit analysis.
  • Explain variable costs.
  • Identify fixed costs.
  • Determine mixed costs.
  • Compute contribution margin and contribution margin ratio.
  • Determine unit contribution margin.
  • Compute break-even point.
  • Assess sales mix considerations.
  • Explain operating leverage.
  • Define margin of safety.
  • Identify the costs used in the variable costing method.
  • Compute product cost using the variable costing method.

Budgeting and Standard Cost Accounting

  • Define a budget and its major objectives.
  • Illustrate budget periods.
  • Describe in general terms the budgeting process.
  • Critique the master budget and its components.
  • Prepare a sales budget.
  • Prepare an inventory, purchases, and cost of goods sold budget.
  • Prepare a production budget.
  • Prepare a direct materials and direct labor budget.
  • Prepare a factory overhead budget.
  • Prepare an operating expenses budget.
  • Prepare a budgeted income statement.
  • Prepare a cash budget and explain its preparation.
  • Prepare a capital expenditures budget.
  • Prepare a budgeted balance sheet.
  • Illustrate budget performance report use.
  • State the primary reasons for using flexible budgets.
  • Distinguish between fixed and variable overhead costs.
  • Establish a flexible budget for several levels of productive activity.
  • Discuss standard cost accounting.
  • Describe the flow of costs in a standard cost accounting system.
  • Prepare variance analysis.
  • Demonstrate the standard cost accounting cycle.

Flexible Budgets, Standard Costs and Variances

  • Explain flexible budgets.
  • Compute flexible budget variances.
  • Examine flexible budget variances.
  • Compute direct material, direct labor, and overhead variances.
  • Explain standard costs.
  • Illustrate the process of determining and setting standard costs.
  • Define standard cost variances for a variety of applications.
  • Prepare journal entries for standard cost application.

Performance Evaluation for Decentralized Operations

  • Define responsibility accounting.
  • Discuss the advantages and disadvantages of decentralization.
  • Prepare a responsibility accounting report for a cost center and a profit center.
  • Compute the rate of return on investment, the residual income and the balanced scorecard for an investment center.

Differential Analysis, Product Pricing, and Activity-Based Costing

  • Identify steps in the differential analysis process.
  • Define and give examples of differential revenues.
  • Define and give examples of differential costs.
  • Prepare differential analysis reports that support decisions to: discontinue a segment or product, make or buy, process or sell and accept business at a special price.
  • Explain the concept of the time value of money as it relates to choosing between alternate courses of action with regard decision making.
  • Explain opportunity costs as they relate to alternative uses of assets.
  • Use the product cost concept to determine the selling price of a product.
  • Describe the activity-based costing method.
  • Allocate product cost by computing activity rates using estimated activity costs and estimated activity base usage and assigning factory overhead.
  • Describe the use of the total cost concept to find product normal selling price.
  • Describe the use of the variable cost concept to find product normal selling price.

Capital Investment Analysis and Budgeting

  • Establish the nature of capital investment analysis.
  • Establish how managers make decisions about capital investments.
  • Assess the relevant data in capital investment decisions.
  • Discuss special sales orders, dropping a business segment, product mix, outsourcing, and sell as-is or process further.
  • Describe how short-term and long-term decisions differ.
  • Use payback and rate of return to make capital budgeting decisions.
  • Compute present value, net present value, and internal rate of return.
  • Adapt the factors that complicate capital investment such as income tax, lease verses buy, changes in the price levels, and uncertainty.