TUNKU PUTERI INTAN SAFINAZ SCHOOL OF ACCOUNTANCY

COLLEGE OF BUSINESS
UNIVERSITI UTARA MALAYSIA
SECOND SEMESTER 2022/2023 (A222)

COURSE CODE : BKAM2013

COURSE NAME : MANAGEMENT ACCOUNTING I
PRE-REQUISITE : BKAR1013 FINANCIAL ACCOUNTING AND
REPORTING 1

1.0 SYNOPSIS

This course introduces the basic concepts, terminologies, principles and methods of cost
accounting at operational level. It includes the introduction of cost elements, basic cost
accumulation techniques and various costing methods, including contemporary
approaches in arriving at the cost of products produced or services rendered.

2.0 COURSE OBJECTIVES

Upon completion of the course, students are expected to:

1. Understand the roles and functions of management accounting in an organization.
2. Highlights the applications of management accounting in the service industry and its
importance in today’s economy.

3.0 LEARNING OUTCOMES

Upon completion of the course, students are able to:

1. Identify the ethical role of management accountants and differentiate cost
classification for different types of business organizations.
2. Analyze traditional costing for different types of business organizations.
3. Explain activity-based costing for different types of business organizations.
4. Analyze the principles of variable costing and absorption costing in the ascertainment
of costs.

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4.0 COURSE CONTENT

NO. TOPIC REFERENCE HOURS

1.0 MANAGEMENT ACCOUNTING OVERVIEW GNB (1) 4
1.1 The need for management accounting information MHH (1)
1.2 Differences between management accounting and
financial accounting
1.3 Historical description of management accounting
1.4 Current focus of management accounting
1.5 The roles of management accountants in
organization
1.6 The importance of ethical behaviour
1.7 Certification for management accountants
2.0 COST TERMS, CONCEPTS AND GNB (2, 3) 6
CLASSIFICATIONS MHH (2, 3)
2.1 General cost classifications
2.2 Product costs vs period costs
2.3 Product cost flows
2.3.1 Calculate the cost of goods manufactured
2.3.2 Calculate the cost of goods sold
2.4 Cost classifications on financial statements
2.5 Cost classifications for predicting cost behaviour
2.6 Cost classifications for assigning costs to cost
objects
2.7 Cost classifications for decision making
3.0 COST ASSIGNMENT GNB (8) 4
3.1 Introduction to product cost assignment MHH (4)
3.2 Assigning direct costs to cost objects
3.3 Assigning indirect costs to cost objects
3.3.1 Plant-wide (blanket) overhead rate
3.3.2 Departmental (multiple) overhead rates
3.4 Problems of overhead allocation (under or
overapplied)
3.4.1 Underapplied and overapplied overhead
3.4.2 Disposition of underapplied or overapplied
overhead
4.0 JOB ORDER COSTING GNB (8) 4
4.1 Introduction to job order costing MHH (4)
4.2 Measuring direct costs
4.3 Application of manufacturing overhead
4.4 Computation of unit costs
4.5 Summary of document flows
4.6 Job cost sheet
5.0 PROCESS COSTING GNB (9) 6
5.1 Comparison of job order and process costing MHH (6)
5.2 Cost flows in process costing
5.3 Equivalent units of production
5.3.1 Weighted average method
5.3.2 First in, first out (FIFO) method
5.4 Computation of unit costs

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 5.4.1 Weighted average method
5.4.2 First in, first out (FIFO) method
5.5 Production report for producing department(s)
5.6 Hybrid costing systems concept
6.0 SERVICE COST ALLOCATION AND GNB (6) 5
APPORTIONMENT MHH (4)
6.1 Concept of cost allocation and cost apportionment
6.1.1 Supporting department
6.1.2 Production department
6.2 The two-stage allocation process
6.3 Cost allocation method
6.3.1 Direct method
6.3.2 Step (sequential) method
6.3.3 Reciprocal method
6.4 Calculation of unit product costs
7.0 ACTIVITY-BASED COSTING GNB (7) 8
7.1 Review of traditional costing system MHH (5)
7.1.1 Plant-wide rate
7.1.2 Departmental rate
7.1.3 Limitation of plant-wide and departmental
rates
7.2 Introduction to the ABC system
7.2.1 Definition of ABC
7.2.2 Unit-based and non-unit based cost drivers
7.3 Designing ABC systems
7.3.1 Identify and classify activities
7.3.2 Estimate the cost of activities
7.3.3 Calculate a cost driver rate
7.3.4 Computation of unit costs
8.0 COST ACCUMULATION SYSTEMS GNB (5) 5
8.1 Types of reporting MHH (3)
8.1.1 External and internal reporting
8.2 Overview of cost accumulation systems
8.2.1 Variable (marginal) costing
8.2.2 Absorption (full) costing
8.3 Preparation of income statement using both costs
accumulation systems
8.4 Reconciliation of the differences in net operating
income
8.5 Advantages and disadvantages of variable and
absorption costing

Note:
GNB = Garrison, R. H., Noreen, E. W., & Brewer, P. C.
MHH = Mowen, M. M., Hansen, D. R., & Heitger, D. L.

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5.0 REFERENCES

MAIN:
Garrison, R. H., Noreen, E. W., Brewer, P. C. (2021). Managerial accounting (17th ed.).
USA: McGraw-Hill.

ADDITIONAL:
Mowen, M. M., Hansen, D. R., & Heitger, D. L. (2018). Managerial Accounting: The
Cornerstone of Business Decision Making (7th ed.). Singapore: Cengage Learning Asia

Datar, S. M., & Rajan, M. (2018). Horngren’s cost accounting: A managerial emphasis
(16th ed.). USA: Pearson Education Limited.

Braun, K. W., & Tietz, W. M. (2013). Managerial accounting (3rd ed.). USA: Pearson.

Whitecotton, S., Libby, R., & Phillips, F. (2014). Managerial accounting (2nd ed.). USA:
McGraw-Hill.

6.0 TEACHING METHODS

This course is conducted for fourteen (14) weeks, comprising three (3) hours of
classroom lectures and one (1) hour of tutorial class per week. Delivery methods include
lectures, class discussions, tutorial assignments, ethic case analyses, and presentations.
Materials for lectures, announcements, assignments, and exercises are available on the
UUM online learning.
Students are expected to be prepared with materials that are going to be discussed in
lectures and tutorials. Students are encouraged to participate actively during discussions.

7.0 ASSESSMENT

Coursework 40%
Final Examination 60%
Total 100%

8.0 ATTENDANCE

Students must fulfill at least 80% of class attendance to sit for the final examination as
governed by the Universiti Utara Malaysia regulations. Students who fail to meet the
above requirements for whatsoever reasons will be barred from taking the final
examination. The 20% absence from lectures includes medical leaves.

9.0 ACADEMIC MISCONDUCT

Students are reminded that academic dishonesty is the most serious academic offence.
Examples of academic dishonesty are cheating and plagiarism, bringing in notes during
the examination, and taking the examination on behalf of another student. Once the
student is convicted of the above offence, the examination result will be withheld and
annulled and/or other serious penalties may be taken against the student.