WACO, TEXAS COURSE SYLLABUS AND INSTRUCTOR PLAN Principle of Managerial Accounting ANNETTE BIGHAM SPRING 2011
Course Description: Emphasizes managerial use of and decision making with accounting data. Topics include financial statement analysis and interpretation, budgeting, product costing, cost control, and management decision techniques. Prerequisite: Completion of ACCT 2401. Students must have passed the math portion of the THEA or approval alternative test or have credit for MATH 0307. Semester Hours 4 (3 lec/2 lab) Prerequisites and/or Corequisites: Completion of ACCT 2401 with a C or better. Students must have passed the math portion of the THEA or approval alternative test or have credit for MATH 0307. Course Notes and Instructor Recommendations: Students are expected to participate in class discussion boards, study course material, complete assignments, study assigned reading, and take tests and quizzes as required. Nonparticipation in the above items will have a detrimental impact on grades and credit. Students are encouraged to do outside reading. Instructor Information: Instructor Name: Annette Bigham MCC E-mail: abigham@mclennan.edu Office Phone Number: (254) 299-8690 Office Location: MAC 221 Office/Teacher Conference Hours: TTH 4:30 5:30 Required Text & Materials: Title: Managerial Accounting Author: Ray H. Garrison and Eric W. Noreen Edition: Thirteenth Edition Publisher: Irwin ISBN: Accountant s tablet, inexpensive calculator 2
Computer storage device. Study Guide for Managerial Accounting - at the option of the instructor MCC Bookstore Website Methods of Teaching and Learning: Lecture Demonstration problems Individualized instruction during lab time Evaluation and review of assignments of exercises and problems In class lab work Course Outline: A. Introduction to managerial accounting. 1. Description of managerial accounting 2. Comparison of financial and managerial accounting 3. Role of managerial accounting B. Cost Terms, Concepts, and Classifications 1. General cost classifications 2. Period costs and product costs 3. Fixed costs and variable costs 4. Direct costs and indirect costs 5. Other cost classifications C. Job-Order Costing 1. An overview 2. The flow of costs 3. Application of overhead 4. Job-order costing in a service entity 3
D. Process costing 1. An overview 2. Flow of costs 3. Computation of equivalent units of product E. Cost Behavior: Analysis and Use 1. Definition and graphical presentation of different cost behaviors a. Variable costs b. Fixed costs c. Mixed costs d. Step costs 2. Analysis of mixed costs by using a. The high-low method b. The scattergraph method c. The least-squares method 3. Presentation of the contribution format income statement F. Cost-Volume-Profit Relationships 1. The basics of cost-volume-profit analysis a. Contribution margin b. Contribution margin ratio c. Importance of contribution margin 2. Break-even analysis a. Break-even computations b. Graphical presentation of break-even c. Contribution margin income statement 3. Margin of safety 4. Operating leverage 5. The concept of the sales mix 4
a. Definition of sales mix b. Sales mix and break-even analysis G. Variable Costing 1. Overview of absorption and variable costing a. Absorption costing b. Variable costing 2. Application of absorption and variable costing a. Unit cost computations b. Preparation of income statements c. Comparison of income data d. Effect of changes in production on net income e. Variable costing used with cost-volume-profit analysis H. Activity-Based Costing (ABC)-General Overview 1. The concept of ABC 2. Numerical example of ABC 3. Benefits and limitations of ABC I. Profit Planning and Budgeting 1. The basics of budgeting a. Definition of budgeting and explanation of key concepts b. Advantages of budgeting c. Budgeting and responsibility accounting d. Choosing a budget period and type of budget e. Introduction to master budget 2. Preparing the master budget a. The sales budget b. The production budget c. The direct materials budget/inventory purchases budget d. The direct labor budget 5
e. The manufacturing overhead budget f. The ending finished goods inventory budget g. The selling and administrative expense budget h. The cash budget i. The budgeted income statement j. The budgeted balance sheet 3. Other considerations of budgeting J. Standard Costs and the Balanced Scorecard 1. Standard Costs 2. Variance Analysis 3. Balanced Scorecard K. Flexible Budgets and Overhead Analysis 1. Flexible Budgets 2. Variable Overhead Variances 3. Overhead Rates and Fixed Overhead Analysis L. Responsibility Accounting 1. Introduction to responsibility accounting 2. Segment reporting and profitability analysis 3. Rate of return for measuring managerial performance 4. Using residual income as an evaluating tool 5. Transfer pricing and its effects M. Using Cost Data in Decision Making 1. Introduction to relevant costs 2. Sunk costs 3. Future costs which are irrelevant 4. Replacement of asset decisions 5. Adding and dropping product lines and other segments 6. The make or buy decisions 6
7. Special order decisions 8. Sell or process further decisions N. Capital Budgeting Decisions 1. Concept and calculation of present value 2. Introduction to capital budgeting decisions 3. Discounted cash flows - the net present value method 4. Discounted cash flows - the internal rate of return method 5. Other approaches to capital budgeting decisions a. The payback method b. The simple rate of return method 6. Income taxes and capital budgeting 7. Preference decisions - the ranking of investment projects O. Financial Statement Analysis 1. Comparative financial statements 2. Analysis of financial statements using horizontal analysis 3. Analysis of financial statements using vertical analysis 4. Ratio analysis 7
Course Outline or Schedule: Any changes to the schedule will be announced in an announcement in class. Day Chapter In class Outside of class Week 1 1 Discuss syllabus and explain chapter 1 Exercises 1-1, 1-2 and read chapter 2 Week 2 2 exercises 2-2, 2-3, 2-11 Problems 2-15, 2-18, 2-19 3 exercises 3-1, 3-3, 3-4, 3-5, 3-14, 3-16 Problems 3-23, 3-32 Week 3 4 exercises 4-1, 4-2, 4-9, 4-10 Problems 4-14, 4-16 Week 4 5 Exam I and exercises 5-1, 5-2, 5-3, 5-6 Problem 5-13 Week 5 5 exercises 5-4, 5-7 Problems 5-11, 5-14,and exercise 5A-1 Week 6 6 exercises 6-1, 6-4, 6-5, 6-7, 6-8, 6-9, 6-10, 6-11, 6-15 Problems 6-19, 6-22, 6-27, 6-29 Week 7 7 exercises 7-3, 7-5, 7-6, 7-7 Problems 7-12, 7-14, 7-15 8 exercise 8B-2 Problem 8B-4 Exam II and begin chapter 9 - exercise 9-1 and problem 9-17 Read chapter 9 carefully Week 8 9 9 problem 9-19 and problem 9-28 Case 9-30 Week 9 10 exercises 10-1, 10-8, 10-9, 10-10 Problems 10-23 Week 10 11 exercises 11-2, 11-3, 11-4, 11-7, 11-8 Problems 11-14, 11B-3 Week 11 12 exercises 12-1, 12-2, 12-3, 12-8 12-12, and problems 12-17, 12-27 problems 12-20, 12-24 Week 12 13 Exam III and begin chapter 13 - exercise 13-2, 13-3, 13-4, 13-5, 13-6 read chapter 13 carefully Week 13 13 various problems TBA 14 exercises 14-1, 14-4, 14-5, 14-6, 14-8, 14-9, 14-10, 14-11, 14A-1 problems 14-17, 14-18, 14-19, 14-25 Problem 14C-4 and read chapter 16 Week 14 14 problem 14-26 and exercises 14C-2, 14C-3 Week 15 16 problems 16-12 and 16-13 Problems 16-14, 16-15 Week 16 Final Exam
Course Grading Information: 3 unit exams 45% Final exam 20% Other 35% TOTAL 100% Grades in the course will be based upon a grading system that includes objective tests, homework problems, computer problems, classwork (participation, attitude and preparedness), and a comprehensive final exam. The specific method of grade determination will vary from one instructor to another. The following percentages relate to demonstrated proficiencies in the objectives and course content: Proficiency Grade 90-100% A 80-89% B 70-79% C 60-69% D Less than 60% F Late Work, Attendance, and Make Up Work Policies:
Any assignment not turned in by the due date will be considered late and is subject to a penalty of 25%. Student Behavioral Expectations or Conduct Policy: Students are expected to maintain classroom decorum that includes respect for other students and the instructor, prompt and regular attendance, and an attitude that seeks to take full advantage of the education opportunity. MCC Academic Integrity Statement: The Center for Academic Integrity, of which McLennan Community College is a member, defines academic integrity as a commitment, even in the face of adversity, to five fundamental values: honesty, trust, fairness, respect, and responsibility. From these values flow principles of behavior that enable academic communities to translate ideals into action. Individual faculty members determine their class policies and behavioral expectations for students. Students who commit violations of academic integrity should expect serious consequences. For further information about student responsibilities and rights, please consult the McLennan website and your Highlander Student Guide. MCC Attendance Policy: Regular and punctual attendance is expected of all students, and each instructor will maintain a complete record of attendance for the entire length of each course, including online and hybrid courses. Students will be counted absent from class meetings missed, beginning with the first official day of classes. Students, whether present or absent, are responsible for all material presented or assigned for a course and will be held accountable for such materials in the determination of course grades. Please refer to the Highlander Guide for the complete policy. ADA Statement: In accordance with the requirements of the Americans with Disabilities Act (ADA), and the regulations published by the United States Department of Justice 28 C.F.R. 35.107(a), MCC s designated ADA co-coordinators, Mr. Gene Gooch - Vice President, Finance and Administration and Dr. Santos Martinez Vice President, Student Services shall be 10
responsible for coordinating the College s efforts to comply with and carry out its responsibilities under ADA. Students with disabilities requiring physical, classroom, or testing accommodations should contact Mr. Marcus Sweatt, Disabilities Specialist, at 299-8122 or msweatt@mclennan.edu. Course Competencies Identify the major differences and similarities between financial and managerial accounting. Identify and assign product costs in a manufacturing environment. Understand and apply costvolume-profits relationships and techniques. Learn to prepare and make decisions with a contribution margin income statement. Learn the basics of an Activity-Based Costing system. Learn the basics of preparing and using budgets. Learn tools and techniques for evaluating the performance of segments of a business. Identify relevant and irrelevant costs and be able to make various business decisions concerning them. Be able to use Statement of Cash Flows and financial statement analysis to evaluate the performance of a business. Identify and analyze different cost behaviors. Workplace Competencies Foundation Skills Informati Technolo Resources Interpersonal Systems Basic Skills Thinking Skills Personal Skills on gy A B C D A B C D E F A B C D A B C A B C A B C D E A B C D E F A B C D E X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X Effective workers can productively use: WORKPLACE COMPETENCIES Resources (R): Identifies, organizes, plans, and allocates resources A. Time--Selects goal-relevant activities, ranks them, allocates time, and prepares and follows schedules. B. Money--Uses or prepares budgets, makes forecasts, keeps records, and makes adjustments to meet objectives. 11
C. Material and Facilities--Acquires, stores, allocates, and uses materials or space efficiently. D. Human Resources--Assesses skills and distributes work accordingly, evaluates performance and provides feedback. Interpersonal (I): Works with others A. Participates as member of a team--contributes to groups effort B. Teaches others new skills C. Serves Clients/customers--works to satisfy customers expectations D. Exercises leadership--communicates ideas to justify position, persuades and convinces others, responsibly challenges existing procedures and policies E. Negotiates--works toward agreements involving exchange of resources, resolves divergent interests F. Works with diversity--works well with men and women from diverse backgrounds Information (If): Acquires and uses information A. Acquires and Evaluates Information B. Organizes and maintains information C. Interprets and communicates information D. Uses computers to process information Systems (S): Understands complex inter-relationships A. Understands systems--knows how social, organizational, and technological systems work and operates effectively with them B. Monitors and corrects performance--distinguishes trends, predicts impacts on system operations, diagnoses deviations in systems performance and corrects malfunctions C. Improves or designs systems--suggests modifications to existing systems and develops new or alternative systems to improve performance Technology (T): Works with a variety of technologies A. Selects technology--chooses procedures, tools or equipment including computers and related technologies 12
B. Applies technology to task--understands overall intent and proper procedures for setup and operation of equipment C. Maintains and troubleshoots equipment--prevents, identifies, or solves problems with equipment, including computers and other technologies FOUNDATIONS SKILLS Competent workers in the high-performance workplace need: Basic Skills (B): Reads, writes, performs arithmetic and mathematical operations, listens and speaks A. Reading--locates, understands, and interprets written information in prose and in documents such as manuals, graphs, and schedules B. Writing--communicates thoughts, ideas, information, and messages in writing; and creates documents such as letters, directions, manuals, reports, graphs, and flow charts C. Arithmetic/Mathematics--performs basic computations and approaches practical problems by choosing appropriately from a variety of mathematical techniques D. Listening--receives, attends to, interprets, and responds to verbal messages and other cues E. Speaking--organizes ideas and communicates orally Thinking Skills (Ts): Thinks creatively, makes decisions, solves problems, visualizes, knows how to learn, and reasons A. Creative thinking--generates new ideas B. Decision Making--specifies goals and constraints, generates alternatives, considers risks, and evaluates and chooses best alternative C. Problem solving--recognizes problems and devises and implements plan of action D. Seeing things in the Mind s Eye--organizes and process symbols, pictures, graphs, objects, and other information E. Knowing how to Learn--uses efficient learning techniques to acquire and apply new knowledge and skills F. Reasoning--discovers a rule or principle underlying the relationship between two or more objects and applies it when solving a problem 13
Personal Qualities (P): Displays responsibility, self-esteem, sociability, self-management, and integrity and honesty A. Responsibility--exerts a high level of effort and perseveres toward goal attainment B. Self-esteem--believes in own self-worth and maintains a positive view of self C. Sociability--demonstrates understanding, friendliness, adaptability, empathy, and politeness in group settings D. Self-Management--assesses self accurately, sets personal goals, monitors progress, and exhibits self-control E. Integrity/honesty--chooses ethical courses of action 14