Managerial Accounting
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ACC150: Managerial Accounting
Managerial Accounting
Course Text
● Wild, John J., and Ken W. Shaw. Managerial Accounting, 5th edition, McGraw-Hill/Irwin, 2016, ISBN: 9781259176494
Course Description
This course focuses on the identification, gathering, and interpretation of information for
planning, controlling, and evaluating the performance of a business. This course studies the
measurement of the costs of producing goods or services and how to analyze and control
these costs.
This course analyzes managerial accounting principles and systems through both process
and job order costing. Additional managerial accounting topics include the following: cost
behavior, cost-volume-profit analysis, budgeting and standard cost systems, decentralized
operations, and product pricing.
Course Objectives
After completing this course, students will be able to:
● Compare and contrast between managerial accounting and financial accounting and assess how managerial accounting affects various management functions.
● Discuss ethical standards in an organization and assess their role in the field of managerial accounting.
● Define cost and distinguish between product costs and period costs. ● Analyze the fundamental manufacturing cost categories and diagram the flow of
product costs in a manufacturing operation.
● Describe job-order costing system and evaluate its suitability in manufacturing and nonmanufacturing firms.
● Describe process costing and evaluate the suitability of process costing in manufacturing and nonmanufacturing firms.
● Compare and contrast traditional volume-based costing system and activity-based costing system.
● Interpret cost behavior patterns to estimate costs and assess the need for contribution approach to income statements.
● Graph CVP relationships and compute the break-even point using the contribution-margin and equation approach.
● Determine the criteria that decide the relevance of a cost or a benefit and explain the concepts of sunk costs, opportunity costs, and unit costs.
● Describe the key decision areas in capital budgeting and explain the concept of time value of money.
● Describe the elements of a budgeting framework and assess the need for a budgeting framework in an organization.
● Describe the various ways to set performance standards and assess the role of performance standards in cost management
● Explain the role of responsibility accounting in achieving set goals and list the responsibility centers.
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ACC150: Managerial Accounting
● Describe the key decision areas in capital budgeting and explain the concept of time value of money.
● Determine the criteria that are used in determining and making pricing decisions.
Course Prerequisites
StraighterLine suggests, though does not require, that students take Accounting I and
Accounting II or its equivalent before enrolling in Managerial Accounting.
Important Terms
In this course, different terms are used to designate tasks:
● Proctoring: all final exams require proctoring which can be completed conveniently from your home. A webcam is required.
● Tutoring: memberships include online tutoring for students to access with any content/subject related questions in the place of faculty. If your tutor is not able to
answer your questions please contact a student advisor.
● Practice Exercise: Non-graded assignments from your text. These activities will assist you in practicing the skills discussed in a topic.
● Exam: A graded online test.
Course Evaluation Criteria
StraighterLine provides a percentage score and letter grade for each course. See Academic Questions section in FAQ for further details on percentage scores and grading scale. A passing percentage is 70% or higher.
If you have chosen a Partner College to award credit for this course, your final grade will be
based upon that college's grading scale. Only passing scores will be considered by Partner
Colleges for an award of credit.
There are a total of 1000 points in the course.
Topic Assessment Points Available
4 Graded Exam #1 (topics 1-4) 125
8 Graded Exam #2 (topics 5-8) 125
8 Midterm Exam (topics 1-8) 200
12 Graded Exam #3 (topics 9-12) 125
16 Graded Exam #4 (topics 13-16) 125
17 Final Graded Exam (topics 1-16) 300
Total 1000
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Course Topics and Objectives
Topic
Topics Subtopics Objectives
1 Managerial
Accounting and
the Business
Environment
● What Is Managerial Accounting?
● Managerial Accountants in an
Organization
● Ethics in Managerial
Accounting
● Changing Role of Managerial
Accounting
● Discuss ethical standards in an organization and assess
their role in the field of
managerial accounting.
● Analyze how the changing business environment has led
to innovations in managerial
accounting.
● Compare and contrast between managerial
accounting and financial
accounting and assess how
managerial accounting affects
various management
functions.
● Outline the roles and responsibilities of a
managerial accountant and
describe the fundamental
tools and practices used in
managerial accounting.
2 Concepts of
Cost
Management
Accounting for
Custom
Operations
● Cost Concepts: An Overview
● General Cost Classifications
● Cost Classifications on Financial
Statements
● Cost Classifications for Different
Purposes
● Define cost and distinguish between product costs and
period costs.
● Analyze the fundamental manufacturing cost categories
and diagram the flow of
product costs in a
manufacturing operation.
● Analyze the cost components on financial statements and
prepare an income statement
and a schedule of cost of
goods manufactured for a
manufacturer.
● Compare direct and indirect costs and distinguish between
variable and fixed costs.
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3 Product Costing
and Cost
Accumulation in
the Production
Environment
● Product and Service Costing
● Flow of Costs in Manufacturing
Firms
● Types of Product-Costing
Systems
● Job-Order Cost Accumulation
● Overhead Application
● Extended Illustration of
Job-Order Costing:
Calculations and
Journal Entries
● Financial Schedules ● Further Aspects of
Overhead
Application
● Discuss the role of product and service costing in
manufacturing and nonmanufacturing firms.
● Diagram and explain the flow of costs through the
manufacturing accounts used
in product costing.
● Distinguish between job-order costing and process costing.
● Compute a predetermined overhead rate, and explain its
use in job-order costing for
job-shop and
batch-production
environments.
● Prepare journal entries to record the costs of direct
material, direct labor, and
manufacturing overhead in a
job-order costing system.
● Prepare a schedule of cost of goods manufactured, a
schedule of cost of goods
sold, and an income
statement for a manufacturer. ● Describe the two-stage
allocation process used to
compute departmental
overhead rates.
● Describe the process of project costing used in service
industry firms and nonprofit
organizations.
4 Product and
Hybrid Product
Costing
Systems
● Comparison of Job-Order Costing
and Process
Costing
● Purpose of product-costing
systems
● Differences in manufacturing
environments
● Differences in cost accumulation
● Similarities in cost flows
● Equivalent Units in
● List and explain the similarities and important
differences between job-order
and process costing.
● Prepare journal entries to record the flow of costs in a
process-costing system with
sequential production
departments.
● Prepare a table of equivalent units under weighted-average
process costing.
● Compute the cost per equivalent unit under the
weighted-average method of
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Process-Costing
Systems
● Stage of completion of the
work-in-process
ending inventory
● Equivalent-unit calculations
● Illustration of Reporting in a
Process-Cost
System
● The departmental production report
● Weighted-average method
● Steps in preparing the departmental
production report
● Other Issues in Process Costing
● Actual versus normal costing
● Using a cost driver other than direct
labor
● A Hybrid Product-Costing
System: Operation
Costing for Batch
Manufacturing
process costing.
● Analyze the total production costs for a department under
the weighted-average method
of process costing.
● Prepare a departmental production report under
weighted-average process
costing.
● Describe how an operation costing system accumulates
and assigns the costs of
direct-material and
conversion activity in a batch
manufacturing process.
5 Activity Based
Costing and
Management
● Traditional Cost Management
● ABC Management ● Activity-Based
Costing and
Traditional Costing
● Activity-Based Costing: Key
Issues
● Describe traditional volume-based costing system
and compute product costs
under a traditional
volume-based costing
system.
● Describe activity-based costing system and compute
product costs under an
activity-based costing system.
● Analyze how cost drivers and data collection help in
addressing issues such as
need for a new costing
system in activity-based
costing.
6 Analysis of ● Cost Behavior ● Interpret cost behavior
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Activity, Cost
Behavior and
Cost Estimation
Patterns
● Analyzing Mixed Costs
● Applying Cost Behavior
patterns using a scattergraph
plot.
● Analyze a mixed cost using high-low method and least
squares regression method.
● Estimate costs after studying cost behavior patterns.
● Assess the need for contribution approach to
income statements and
prepare an income statement
using the contribution format.
7 Cost-Volume-Pr
ofit (CVP)
Analysis
● Approaches to CVP Analysis
● Cost-Volume-Profit (CVP) Relationship
● CVP Analysis and Cost Management
● CVP Analysis and Cost Structure
● Graph CVP relationships. ● Compute the break-even
point using the
contribution-margin and
equation approach.
● Apply CVP analysis to demonstrate the effect of
changes in variable cost, fixed
cost, and sales volume on
profit.
● Analyze the impact of cost structure on profit stability
and compute the degree of
operating leverage at a
specific sales level.
8 Absorption and
Variable Costing
● Product Cost and Fixed
Manufacturing
Overhead
● Absorption-costing income statements
● Variable-costing income statements
● Reconciliation of Absorption- and
Variable-Costing
Income
● No change in inventory levels
● Increase in inventory levels
● Decrease in inventory levels
● Overall Evaluation of Absorption and
Variable Costing
● Explain the accounting treatment of fixed
manufacturing overhead
under absorption and variable
costing.
● Prepare an income statement under absorption costing.
● Prepare an income statement under variable costing.
● Reconcile reported income under absorption and variable
costing.
● Explain the implications of absorption and variable
costing for cost-volume-profit
analysis.
● Evaluate absorption and variable costing.
● Explain the rationale behind throughput costing.
● Prepare an income statement
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● Throughput Costing
under throughput costing.
9
Profit Planning
and
Activity-Based
Budgeting
● Framework of Budgeting
● Budgets as a Planning Tool
● Preparing the Master Budget
● Activity-Based Budgeting
● Create a diagram showing the steps taken to create a
budget and describe the
different types of budgets.
● Prepare different types of budgets and budget
schedules for the master
budget.
● Demonstrate how activity-based budgeting
operates using an example
and assess the need for an
activity-based budgeting
system.
● Describe the elements of a budgeting framework and
assess the importance of
budgeting in an organization.
10 Operational
Performance
Measures:
Standard
Costing and
Balanced
Scorecard
● Setting Performance
Measures
● Cost Variance Analysis
● Using Standard Costs for
Evaluation
● The Balanced Scorecard
● Describe the various ways to set performance standards
and assess the role of
performance standards in cost
management .
● Assess the significance of cost variances in setting
standards.
● Compute the material price and quantity variances and
the labor rate and efficiency
variances and prepare journal
entries to record cost
variances.
● Analyze the role of a balanced scorecard in developing
strategies.
11 Flexible
Budgeting:
Managing
Overhead and
Support Activity
Costs
● Flexible Budgets: An Overview
● Overhead Variance ● Overhead Analysis ● Activity-Based
Flexible Budgets
● Create a diagram showing the components of a flexible
budget and assess the
importance of flexible
budgeting in an organization.
● Diagram variable overhead spending and efficiency
variances using graphs and
compute variable overhead
variances.
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● Interpret variable overhead variances and prepare an
overhead cost performance
report and a flexible overhead
budget.
● Compare and contrast activity-based flexible
budgeting and traditional
flexible budgeting.
12 Responsibility
Accounting:
Quality and
Environmental
Cost Control
● Responsibility Accounting: An
Overview
● Segment Reporting ● Decentralization ● Segment
Performance
Evaluation
● Prepare performance reports for various responsibility
centers and a segmented
income statement.
● Define decentralization and discuss its advantages and
disadvantages.
● Use the return on investment and residual income
approaches to measure an
investment center's
performance.
● Explain how responsibility accounting can achieve set
goals and list the
responsibility centers.
13 Investment
Centers and
Transfer Pricing
● Capital Budgeting Decisions: An
Overview
● Screening Decisions: Net
Present Value
Method
● Screening Decisions: Internal
Rate of Return
Method
● Ranking Decisions ● Screening
Decisions:
Economic Value
Added (EVA)
● Describe the key decision areas in capital budgeting and
explain the concept of time
value of money.
● Explain the net present value method of making capital
budgeting decisions and use it
to evaluate an investment
proposal for acceptability.
● Explain the internal rate of return method of making
capital budgeting decisions
and use it to evaluate an
investment proposal for
acceptability.
● Grade investment proposals using the profitability index.
14 Decision
Making:
Relevant Costs
and Benefits
● The Decision-Making
Model
● Identifying Relevant Costs and
● Determine the criteria that decide the relevance of a cost
or a benefit and explain the
concepts of sunk costs,
opportunity costs, and unit
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Benefits
● Aspects of Decision Making
● Activity-Based Costing and
Relevant Costs
costs.
● Prepare analyses of various decision categories using
relevant costs and benefits.
● Assess the importance of activity-based costing in
relevant-cost analysis.
● Demonstrate the steps in the process of decision making
using an example and
distinguish between
quantitative and qualitative
analyses in decision making.
15 Allocation of
Support and
Joint Costs
● Service Department Cost
Allocation: A
General Overview
● Methods of Service Department Cost
Allocation
● Direct method ● Step-down method ● Reciprocal-services
method (appendix)
● Dual-Cost Allocation
● Today's Advanced Manufacturing
Environment
● Joint Product Cost Allocation
● Allocate service department costs using the direct method
and the step-down method.
● Use the dual approach to service department cost
allocation.
● Explain the difference between two-stage cost
allocation with departmental
overhead rates and
activity-based costing (ABC).
● Allocate joint costs among joint products using each of
the following techniques:
physical-units method,
relative-sales-value method,
and net-realizable-value
method.
● Describe the purposes for which joint cost allocation is
useful and those for which it
is not.
● Allocate service department costs using the
reciprocal-services method
16 Target Costing
and Analysis for
Pricing
Decisions
● Influences on pricing decisions
● The economic, profit-maximizing
pricing model
● Key principles of target costing
● Use cost- plus pricing formulas to set prices
● Use the time and material pricing approach to determine
prices
● Explain the key principles of target costing
● Explain the economic, profit-maximizing pricing
model
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● List the key principles of target costing
● Explain the role of activity-based costing in
setting a target cost
17 Review ● Review ● Complete a review of key content covered in this
course.
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