Course Outline of Record Los Medanos College 2700 East Leland Road Pittsburg CA (925) Course Title: Managerial Accounting

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1 New Course OR Existing Course Instructor(s)/Author(s): Penny Wilkins Subject Area/Course No.: BUS-187 Units: 4 Course Name/Title: Managerial Accounting Discipline(s): Business, Accounting Pre-Requisite(s): BUS-186 Co-Requisite(s): None Advisories: MATH-012 and eligibility for ENGL-100 Catalog Description: This course continues the study of accounting theory with special emphasis on the types of accounting information used by managers, sources of information, and how managers use this information to make business decisions. Topics include cost systems, the analysis and use of cost information, cost-volume-profit analysis, contribution margin, profit planning, standard costs, capital budgeting, and statement analysis. Schedule Description: Business is the most popular major at U.S. four-year colleges and universities. If you are planning to transfer and major in business or accounting, you need this course. The course explores managerial accounting, its importance, and how it is used by managers to make business decisions. Hours/Mode of Instruction: Lecture 72 Lab Composition Activity Total Hours 72 (Total for course) Credit Credit Degree Applicable (DA) Grading Pass/No Pass (P/NP) Repeatability 0 Credit Non-Degree (NDA) Letter (LR) 1 (If Non-Credit desired, contact Dean.) Student Choice (SC) 2 3 Last date of Assessment: Spring 2016 Cohort #: 3 Please apply for: LMC General Education Requirement): None Transfer to: CSU UC IGETC Area CSU GE Area C-ID Number _110 Course is Baccalaureate Level: Yes No Form Revised Page 1 of 9

2 Signatures: Department Chair Librarian Dean Curriculum Committee Chair President/Designee CCCCD Approval (Board or Chancellor's Office) For Curriculum Committee Use only: STAND ALONE COURSE: YES X NO FOR OFFICE OF INSTRUCTION ONLY. DO NOT WRITE IN THE SECTION BELOW. Begin in Semester Catalog year Class Max: 40 Dept. Code/Name: T.O.P.s Code: Crossover course 1/ 2: ESL Class: Yes / (No) DSPS Class: Yes / (No) Coop Work Exp: Yes / (No) Class Code A Liberal Arts & Sciences SAM Code A Apprenticeship Remediation Level B Basic Skills B Developmental Preparatory B Advanced Occupational NBS Not Basic Skills C Adult/Secondary Basic Education C Clearly Occupational D Personal Development/Survival D Possibly Occupational E For Substantially Handicapped E* Non-Occupational F Parenting/Family Support F Transfer, Non-Occupational G Community/Civic Development *Additional criteria needed H General and Cultural 1 One level below transfer I Career/Technical Education 2 Two levels below transfer J Workforce Preparation Enhanced 3 Three levels below transfer K Other non-credit enhanced Not eligible for enhanced Course approved by Curriculum Committee as Baccalaureate Level: _Yes / No_ LMC GE or Competency Requirement Approved by the Curriculum Committee: Distribution: Original: Office of Instruction Copies: Admissions Office, Department Chairperson Form Revised Page 2 of 9

3 Institutional Student Learning Outcomes Check the institutional student learning outcomes (or category of outcomes) below that are reflected in your course: General Education SLOs (Recommended by GE Committee) At the completion of the LMC general education program, a student will: 1. read critically and communicate effectively as a writer and speaker. 2. understand connections among disciplines and apply interdisciplinary approaches to problem solving. 3. think critically and creatively 4. consider the ethical implications inherent in knowledge, decision-making and action. 5. possess a worldview informed by diverse social, multicultural and global perspectives. (Each of the above student learning outcomes for the general education program has a written explanation with illustrations and examples of its application within courses, as well as specific assessment criteria. Consult the GE program information pages.) None Program-Level Student Learning Outcomes (PSLOs) AS-T in Business Administration Student Learning Outcomes at completion of the program are: 1. Analyze practical business problems and utilize research and critical thinking to evaluate and recommend alternative solutions. 2. Demonstrate strong oral and written skills necessary to effectively collaborate and communicate from a global perspective with diverse groups of people. 3. Apply accounting concepts and principles in making decisions about business operations. 4. Identify and explain the major functional areas of the business organizations including management, marketing, finance, and accounting. 5. Apply commonly used computer application programs to create relevant business documents. Course-Level Student Learning Outcomes (CSLOs): Upon successful completion of the course, students will be able to: 1. Define and use managerial accounting and business terminology. PSLO 3, PSLO 4 2. Analyze financial information and construct various managerial accounting statements and reports using cost-volume-profit relationships, incremental analysis techniques, activity-based costing, and capital budgeting methods. PSLO 1, PSLO 2, PSLO 3, PSLO 4 3. Prepare the master budget, flexible budgets, and responsibility accounting reports. PSLO 2, PSLO 4 4. Construct accounting records and reports for job-order and process product costing systems. PSLO 2, PSLO 4 Assessments Instruments: Exams: All homework assignments are completed at the publisher s website. Textbooks and other materials are available to students when completing the homework assignments. Additionally, they are given multiple attempts at each homework problem. The homework assignments are designed to give the student an opportunity to apply the concepts learned in class and to help them master the material for the exams. Therefore, the exams are the only true measures of what the students have learned. All the CSLOs are assessed with questions from the four exams. Form Revised Page 3 of 9

4 Exam 1 Exam 2 Exam 3 Final Exam CSLO 1 X X X X CSLO 2 X X X X CSLO 3 X CSLO 4 X CSLO 1 - Define and use managerial accounting and business terminology. PSLO 3, PSLO 4 CSLO 1 is assessed by the three unit exams and the final exam. Students may be asked to either provide definitions of the terms or match the terms with their definitions. Use of the terms are also assessed indirectly through exam questions which directly assess CSLO 2, CSLO 3, and CSLO 4. Students cannot record financial transactions or construct financial statements and/or reports without using managerial accounting and business terms. Example exam question for CSLO 1: Yates Manufacturing Company incurs the following manufacturing items during the month of May. 1. Assembly line wages 2. Raw materials used directly in product 3. Depreciation on office equipment 4. Property taxes on factory building 5. Rent on factory building 6. Sales commissions 7. Depreciation on factory equipment 8. Factory utilities 9. Wages for factory maintenance workers 10. Advertising Instructions: Define each item and indicated if it is a cost item, direct materials, direct labor, manufacturing overhead, or period cost. CSLO 2 - Analyze financial information and construct various managerial accounting statements and reports using cost-volume-profit relationships, incremental analysis techniques, activitybased costing, and capital budgeting methods. PSLO 1, PSLO 2, PSLO 3, PSLO 4 CSLO 2 is assessed through the three unit exams and the final exam. Each exam includes questions/exercises where the student may be asked to use cost-volume-profit relationships, incremental analysis techniques, activity-based costing, and/or capital budgeting methods to analyze financial information and construct various managerial accounting statements and reports. However, not all items are always present in every exam. Example exam Question for CSLO 2: The information below relates to Rush Company s developed product: Per Unit Sales price 90 Variable cost 54 Total fixed costs 432,000 Instructions: Answer the following independent questions and show computations to support your answers for all items (a, b, and c). Form Revised Page 4 of 9

5 a. How many units must be sold to break even? b. What is the total sales, in dollars, that must be generated for the company to earn a profit of 50,400? c. If the company is presently selling 14,000 units, but plans to spend an additional 135,000 on an advertising program, how many additional units must the company sell to earn the same net income it is now making? CSLO 3 - Prepare the master budget, flexible budgets, and responsibility accounting reports. PSLO 2, PSLO 4 CSLO 3 is assessed through exam 3. Several of the exam problems, approximately 50%, are devoted to the preparation of various budgets, budget reports, and responsibility reports. Example exam question for CSLO 3: Garver Industries has budgeted the following unit sales: 2016 Units January 10,000 February 8,000 March 9,000 April 11,000 May 15,000 The finished goods units on hand on December 31, 2015, was 2,000 units. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales. Additional information includes: Indirect labor 5.00 Indirect materials 2.50 Maintenance.80 Utilities.30 Fixed overhead costs per month are: Supervision 800 Insurance 200 Property taxes 300 Depreciation 900 Instructions: a- For the first quarter of 2016, prepare a production budget. b- Prepare a flexible manufacturing overhead budget for 3000 machine hours. CSLO 4 - Construct accounting records and reports for job-order and process product costing systems. PSLO 2, PSLO 4 CSLO 4 is assessed through exam 1. Several of the exam problems, approximately 40%, are devoted to describing, illustrating, and constructing reports for various job-order and/or process product costing accounting systems. Example exam question for CSLO 4: Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K. Form Revised Page 5 of 9

6 In establishing the predetermined overhead rates for 2016, the following estimates were made for the year. Department D E K Manufacturing overhead 1,050,000 1,500, ,000 Direct labor costs Direct labor hours Machine hours 1,500,000 1,550, , , ,000 49, , , ,000 During January, the job cost sheets showed the following costs and production data. Department D E K Direct materials used 173, ,240 96,720 Direct labor costs 148, ,400 46,500 Manufacturing overhead 122, ,760 97,960 incurred Direct labor hours 9,920 13,640 4,340 Machine hours 42,160 55,800 10,400 Instructions: a-compute the predetermined overhead rate for each department. b-compute the total manufacturing costs assigned to jobs in January in each department. b- Compute the under- or overapplied overhead for each department at January 31. Method of Evaluation/Grading: Homework assignments 25% Exams (including final) 75% CSLO 1 - Define and use managerial accounting and business terminology. PSLO 3, PSLO 4 A-level student work: Definitions are coherent and consistent with managerial accounting principles and/or the textbook glossary for at least 90% of the terms. If terms are assessed using matching questions, at least 90% of terms are matched with the proper definition. Managerial accounting statements and reports and budgets are prepared using proper managerial accounting and business terms at least 90% of the time. Minor errors in the use of terms could be present. C-level student work: Definitions are coherent and consistent with managerial accounting principles and/or the textbook glossary with 70% accuracy. If terms are assessed using matching questions, 70% of the terms are matched with the proper definition. Managerial accounting statements and reports and budgets are prepared using proper managerial accounting and business terms 70% of the time. Significant errors in the use of managerial accounting and business terms are often present. Form Revised Page 6 of 9

7 CSLO 2 - Analyze financial information and construct various managerial accounting statements and reports using cost-volume-profit relationships, incremental analysis techniques, activitybased costing, and capital budgeting methods. PSLO 1, PSLO 2, PSLO 3, PSLO 4 A-level student work: The breakeven point and target profit point are correctly computed in at least 90% of the situations (1); special order, make or buy, sell or process further, retain or replace equipment, eliminate an unprofitable business segment, and the allocation of limited resources situations are analyzed using the appropriate incremental analysis techniques at least 90% of the time and the correct decision is reached and communicated at least 90% of the time (2); manufacturing overhead is correctly allocated to products for at least 90% of the activity cost pools (3); the payback period, annual rate of return, and the net present value are correctly computed at least 90% of the time and the appropriate capital budgeting decision is reached and communicated at least 90% of the time (4). C-level student work: The breakeven point and target profit point are correctly computed in 70% of the situations (1) special order, make or buy, sell or process further, retain or replace equipment, eliminate an unprofitable business segment, and the allocation of limited resources situations are analyzed using the appropriate incremental analysis techniques 70% of the time and the correct decision is reached and communicated 70% of the time (2); manufacturing overhead is correctly allocated to products for 70% of the activity cost pools (3); the payback period, annual rate of return, and the net present value are correctly computed 70% of the time and the appropriate capital budgeting decision is reached and communicated between 70% of the time (4). CSLO 3 - Prepare the master budget, flexible budgets, and responsibility accounting reports. PSLO 2, PSLO 4 A-level student work: The components of the master budget, the flexible budgets, and the responsibility accounting reports are prepared in proper form with correct titles, subtotals, and totals. The ten components of the master budget are properly integrated and ordered (i.e. the production budget is based on the sales budget and provides input for the direct materials, direct labor, and manufacturing overhead budgets). Flexible budgets are prepared for an appropriate relevant range of activity and flex for the variable cost while presenting the same fixed costs at each level of activity. Responsibility accounting reports include only those revenues and costs that are controllable at either the cost center, profit center, or investment center for which the report was prepared for. The controllable margin is correctly computed. Investment center reports include the correct computation of the return on investment. Minor errors in titles or labels and minor computation errors could be present. C-level student work: The master budget components, the flexible budgets, and the responsibility accounting reports are prepared but include two or three significant errors or omissions. Two or three of the components of the master budget have incorrect labels, subtotals, or totals and two or three of the components are not properly integrated. The flexible budgets include a two - three errors in labeling and/or in the computation of subtotals and totals. Responsibility accounting reports include two three errors in determining controllable costs and/or revenues or in the computation of return on investment. CSLO 4 - Construct accounting records and reports for job-order and process product costing systems. PSLO 2, PSLO 4 A-level student work: The accumulation and assignment of product costs in a job-order cost accounting system and a process cost accounting system are properly accounted for by the appropriate journal entries. The job-order cost sheets (job-order cost accounting system) and the production cost reports (process cost accounting system) are properly computed, prepared, and presented. Minor errors in Form Revised Page 7 of 9

8 account titles (journal entries) and report line item descriptions (cost sheets and production cost reports) may be present. C-level student work: The journal entries to account for the accumulation and assignment of product costs include two - four significant errors in either account title or amount. The job-order costs sheets and the production cost reports include two four significant errors in their computation, preparation and/or presentation. Course Content: Introduction to Managerial Accounting comparison of financial and managerial accounting; functions of management; manufacturing costs; product vs. period costs; cost of goods manufactured; overview of managerial accounting trends; just-in-time inventory. Job Order Costing flow of cost in job order cost system; accumulating manufacturing costs; assigning manufacturing costs to work-in-process inventory; assigning costs to finished goods inventory; assigning costs to cost of goods sold; job cost sheets; predetermined overhead rate; overapplied and underapplied overhead. Process Costing similarities and differences between job order cost and process cost system; process cost flow; computation of equivalent units; preparation of the production cost report. Activity-Based Costing traditional costing vs. activity-based costing (ABC); benefits of ABC; limitations of ABC; when to use ABC; value added vs. non-value added activities; classification of activity levels; ABC in service industries. Cost-Volume-Profit Analysis variable costs; fixed costs; mixed costs; relevant range; CVP income statement; break-even analysis; target net income; margin of safety. Variable Costing comparison of adsorption costing and variable costing; potential advantages of variable costing; decision-making concerns; break-even sales in units with sales mix; break-even sales in dollars with sales mix; cost structure and operating leverage. Budgetary Planning benefits of budgeting; essentials of effective budgeting; budgeting and human behavior; master budget; operating budgets; financial budgets; budgeting for non-manufacturing companies. Budgetary Control and Responsibility Accounting static budget reports; flexible budgets; flexible budget reports; responsibility accounting for cost centers; responsibility accounting for profit centers; responsibility accounting for investment centers. Standard Costs need for standard costs; variances from standards; financial statement presentation of variances; balanced scorecard. Time Value of Money nature of interest; future value concepts; future value of single amount; future value of annuity; present value concepts; present value of a single amount; present value of annuity; computing present value of a long-term note or bond. Incremental Analysis the incremental analysis approach; accept an order at a special price; make or buy; sell or process further; retain or replace equipment; eliminate an unprofitable segment; allocate limited resources. Form Revised Page 8 of 9

9 Capital Budgeting process for evaluation; annual rate of return; cash payback; net present value method; internal rate of return method; comparison of discounted cash flow methods. Instructional Methods: Textbooks: Lecture Lab Activity Problem-based Learning/Case Studies Collaborative Learning/Peer Review Demonstration/Modeling Role-Playing Discussion Computer Assisted Instruction Other (explain) Kimmel, Weygandt, & Kieso. (2016). Accounting: Tools for business decision making. 6 th Ed. New York: Wiley & Sons Publishing. Form Revised Page 9 of 9