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Our Lady of the Pillar College – San Manuel, Inc.

District 3, San Manuel, Isabela

COLLEGE OF ACCOUNTANCY

COURSE SYLLABUS
(Acc 6a – Strategic Cost Management)

INSTITUTIONAL VISION-MISSION

OLPC-SMI VISION
OLPC-SMI, a Catholic educational institution, envisions the formation of a Christ-centered community for social transformation through the evangelical mission of the local
church.

OLPC-SMI MISSION
Thus, OLPC-SMI commits to:
a. Provide equal access to holistic Catholic Education integrating Gospel and Filipino ethical values.
b. Create in the school community opportunities that foster individual transformation where peace, justice, equality and culture of excellence are observed and practiced.
c. Provide opportunities or avenues for stakeholders to become stewards of creation.
d. Reach out to people enriching their faith-life experience needed in building a just and humane society.
e. Equip learners with life-long learning skills needed in building a globally competitive world.

PILLARICAN PHILOSOPHY OF EDUCATION

Pillarican education is a lifelong journey toward total human transformation through integral evangelization so that everyone will become a pillar of peace, justice and love of
humanity with a preferential option for the poor and deep concern for the environment.

OLPC-SMI CORE VALUES

People oriented with preferential option for the poor

Insistent passion for excellence
Loyal to the school and teamwork-oriented
Life-long learners
Accountable and Christ-oriented and
Responsible Filipino citizen with social concern for gender equality and environmental consciousness
PHILOSOPHY, VISION AND MISSION OF COLLEGE OF ACCOUNTANCY

PHILOSOPHY

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Guided by the School’s Philosophy, the College of Accountancy believes that the totality of a person is manifested on how he makes use of his free will and intellect in his
interaction as stewards of the environment.

VISION
Anchored from the Vision of the School, the College of Accountancy envisions itself as a premiere college in accounting education, transforming students into competent,
innovative and proficient business professionals imbued with Pillarican core values.

MISSION
Thus, the College of Accountancy commits to:
a. Provide relevant and responsive quality accounting education in order to produce committed, skilled and active agents of social transformation.
b. Create and maintain a positive public presence by actively responding to the needs of the industry, government and society in order to prepare the playing field for
employment and to become productive members of society.
c. Provide opportunities for practical application in auditing, taxation and accounting through extension services to the business community.

COURSE IDENTIFICATION

Course Name : Strategic Cost Management

Course Credit : Three (3) units
Course Description : This course is designed to expose the students to different management decision making techniques. It includes various concepts such as
classifications of costs; analysis of behavior of costs; relationships between costs, changes in the volume of units sold, and profit. It presents a
distinction between the preparation and presentation of income statement for external reporting (absorption costing or full costing approach) and
the preparation and presentation of income statement for internal reporting (variable costing or direct costing approach). It also covers cost
accounting techniques that support strategic management principles and practices in an organization like activity-based costing, total life cycle costing
and the use of standard costs for production and the corresponding analysis of variances.
Contact Hours/Week : 3 Hours
Pre-requisite : Acc 4
Course Outcomes :

Upon completion of the course the students will be able to

1. Integrate and apply the acquired knowledge to specific and realistic problem solutions.
2. Familiarize the students with financial accounting and reporting terms essential to their profession.
3. Communicate effectively using standard business and legal terminology
4. Develop the value of honesty, objectivity and perseverance in understanding various business situations to achieve good decision making.
5. Teach the importance and encourage the application of ethics in business.
6. Develop Christian values and patriotism.

Detailed Course Outline:

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Time
Table
Program Outcomes Performance Indicators Course Outcomes Course Topics Teaching/Learning Activities
(54
hours)
 Resolve business  Conduct a planning and problem Strategic Cost Management and  Discussion of theories will be through lecture W1
issues and solving meeting to resolve issues The student shall be able to: Management Accounting method while for topics with problem analysis,
problems, with a related to a planned business  Define management and the 1. Strategic cost management defined it will be discussed through illustrational
global and event. objectives of management. 2. Management accounting defined examples. Textbook will be provided to
strategic  Pass licensure examinations or  Define strategic cost management 3. Objectives of management accounting students and online consultation will also be
perspective using qualify for professional  Define management accounting and 4. The relationship of management done.
knowledge and accreditations/certifications. identify the objectives of accounting with financial and cost  Seatwork/Activity/Assignment/Quiz
technical  Promote adherence to legitimate management accounting. accounting as provider of information
proficiency in and acceptable ethical objectives  Know the relationship of financial 5. The need for accounting information
the areas of of an organization. accounting and management 6. Organizational structure
financial  Perform accounting-related work accounting. 7. The changing role of a traditional
accounting and in actual workplace based on  Know the relationship of accountant’s function to a financial
reporting, cost preset standards. management accounting with cost manager’s function
accounting and  Prepare financial reports accounting. 8. Financial management responsibilities
management, containing information needed by  Understand the need for accounting 9. Basic duties of controller
accounting and users of financial statements. information by the management. 10. Basic duties of treasurer
control, taxation 11. Professional ethics for management
 Understand the changing role of
and accounting accountants
traditional accountant to financial
information 12. Ethical conduct
managers.
system. 13. Resolution of ethical conflict
 Understand the role of management
 Work effectively 14. Management accounting information
accountant in controlling and
with other system
evaluating performance and decision
stakeholders and 15. Designing a management accounting
making.
mange conflict in system
 Understand the organizational 16. Essential characteristics and qualities of
the workplace.
structure and the role of accounting information
 Confidently in the organization.
maintain a 17. Components of information systems
 Understand Financial Management (computer-based system)
commitment to
Responsibilities. 18. Purpose of accounting information and
good corporate
 Differentiate the functions of a need for accounting systems
citizenship,
financial officer (controller) and a 19. Uses of accounting system
social
treasurer. 20. Components of an accounting system
responsibility
and ethical  Understand different management 21. General guidelines in setting good
practice in terms accounting system design
performing  Understand the need for an 22. Elements of good internal control
functions as an information system. 23. Sources of accounting data
accountant.  Know the definition, nature and 24. Elements of a computerized accounting
 Apply objectives of management system
accounting systems.

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Time
Table
Program Outcomes Performance Indicators Course Outcomes Course Topics Teaching/Learning Activities
(54
hours)
knowledge and  Know the qualities and essential
skills to components of an accounting system.
successfully  Procedures and steps in setting up
respond to management accounting systems and
various types of design.
assessments; and  Know the essential characteristics
(including and qualities of good management
professional information system.
licensure and  Know the different sources of
certification) accounting information, and
 Express clearly elements of good internal
and control.
communicate  Set up Management Information and
effectively with Control System.
stakeholders both Cost Concepts, Classifications and Behavior  Discussion of theories will be through lecture W2
in oral or written The student shall be able to: 1. Cost classified by the functional areas of method while for topics with problem analysis,
forms.  Define and identify the key cost the organization to which the costs relate it will be discussed through illustrational
concepts. - Manufacturing cost examples. Textbook will be provided to
 Identify how are costs be classified - Nonmanufacturing cost students and online consultation will also be
to its appropriate use and why are 2. Cost classified as to timing of charges to done.
such classifications useful. revenue in an accounting period  Seatwork/Activity/Assignment/Quiz
 Distinguish between manufacturing - Product cost
and non-manufacturing costs. - Period cost
 Distinguish between product costs 3. Cost classified in relation to management
and period costs. controlling functions, particularly in
 Distinguish between direct and managing cost
indirect costs. - Cost classified as to traceability (direct
 Distinguish between controllable and cost and indirect cost)
non-controllable costs. - Cost classified as to controllability
(Controllable cost and uncontrollable
 Understand how cost behavior
cost)
affects planning and controlling
4. Cost classified in relation to decision
functions of management and
making
distinguish the three major kinds of
- Opportunity cost
cost behavior - variable, fixed and
- Differential cost
mixed.
- Relevant cost
 Define the relevant range and explain
- Marginal cost
its significance in cost behavior
- Average cost per unit
analysis.

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Time
Table
Program Outcomes Performance Indicators Course Outcomes Course Topics Teaching/Learning Activities
(54
hours)
 Formulate cost function and know its - Sunk cost
purpose. - Out-of-pocket cost
 Identify costs relevant to decision 5. Cost classified in relation to organization’s
making. activity and its behavior
- Variable cost
- Fixed cost
- Mixed cost or semi-variable cost
6. Other terms commonly used in the study of
management accounting
Product Costing  Discussion of theories will be through lecture W3 –
The student shall be able to: 1. Variable (Direct) costing method method while for topics with problem analysis, W4
 Know what is variable costing as 2. Absorption costing method it will be discussed through illustrational
against absorption costing. 3. Income statement presentation using examples. Textbook will be provided to
 Understand the rationale of using standard costing students and online consultation will also be
variable costing internally for 4. Reconciliation of variable costing and done.
management planning and control. absorption costing  Seatwork/Activity/Assignment/Quiz
 Differentiate inventory valuation
under variable (direct) costing as
against absorption (full) costing.
 Identify costs included in the product
cost under variable costing.
 Know how fixed overhead costs are
deferred in inventory under
absorption costing.
 Know why fixed overhead costs are
charged to period costs when
incurred and not part of product
costs.
 Prepare an income statement under
variable costing (Contribution
Margin approach).
 Prepare an income statement under
absorption costing or full costing
approach.
 Learn how to reconcile the net
income under variable costing and
absorption costing methods.
 Know the proper treatment of

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Time
Table
Program Outcomes Performance Indicators Course Outcomes Course Topics Teaching/Learning Activities
(54
hours)
volume.
Cost-Volume-Profit (CVP) Analysis  Discussion of theories will be through lecture W5 –
The student shall be able to: 1. Breakeven point in CCVP analysis method while for topics with problem analysis, W6
 Define what is cost volume profit 2. Basic CVP terms it will be discussed through illustrational
analysis. 3. Basic CVP equation examples. Textbook will be provided to
 Explain how changes in volume or 4. Uses of CVP analysis students and online consultation will also be
activity affect net income. 5. Basic formulas of breakeven point done.
 Understand cost-volume-profit 6. Breakeven point for multiple product line  Seatwork/Activity/Assignment/Quiz
(CVP) analysis and its uses (break- 7. Some limitations of breakeven analysis
even point in volume and in 8. Cost structure
revenues). 9. Operating leverage
 List and discuss the key assumptions
of CVP analysis.
 Compute a break-even point using
the contribution-margin approach
and the equation approach.
 Prepare and diagram a Break -even
point and Profit volume graphs and
explain how it is used.
 Apply CVP analysis to determine the
effect on profit of changes in fixed
expenses, variable expenses, sales
prices, and sales volume.
 Compute margin of safety and
understand its significance.
 Compute the break-even point for a
multiple product line and sales mix.
 Understand the limitations of
breakeven point.
 Understand the effects of shifts in the
sales mix on contribution margin and
breakeven point.
 Explain the role of cost structure and
operating leverage in CVP
relationships.
Activity-Based Costing and Service Costs  Discussion of theories will be through lecture W7
The student shall be able to: 1. Activity-based costing (ABC) system method while for topics with problem analysis,
 Define what is activity based costing. defined it will be discussed through illustrational

Acc 6a – Strategic Cost Management


Program Outcomes Performance Indicators Course Outcomes
 Understand its concept and purpose.
 Describe the major components in
activity based costing and their
interrelationships.
 Identify the steps in the development
of an activity-based costing system.
 Understand the cost accumulation
procedures of activity based costing
method.
 Determine the costs to be charged to
the product using the activity based
costing system.
 Know the advantages of ABC
Costing method and recognize its
difference to traditional costing
method.
 Identify what is a service department
cost.
 Understand why it is necessary to
allocate service department cost to
operating
departments.
 Allocate service department costs,
using the direct method and step
method.
The student shall be able to:
 Define standard costs.
 Know the functions of standard
costing system.
 Explain how standard costing is used
to help control costs, its advantages
and disadvantages.
 Know different kinds of standard
bases.
 Explain several methods for
determining the significance of cost
variances.
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Time
Table
Course Topics Teaching/Learning Activities
(54
hours)
2. Activity-based management examples. Textbook will be provided to
3. Purpose of ABC students and online consultation will also be
4. Major components of ABC and their done.
relationships  Seatwork/Activity/Assignment/Quiz
5. Reasons or factors affecting the use of
ABC
6. Steps in developing ABC system
7. Comparing ABC to the traditional volume-
based costing
8. Advantages of ABC system
9. Limitations of ABC system
10. Service or support departments’ cost
allocation to operating departments
Standard Costing for Cost Control  Discussion of theories will be through lecture W8 –
1. Setting standard costs method while for topics with problem analysis, W9
2. Accounting and disposition of standard it will be discussed through illustrational
costs examples. Textbook will be provided to
3. Functions of standard costing system students and online consultation will also be
4. Variance analysis and accounting for done.
standard costs  Seatwork/Activity/Assignment/Quiz
- Material variances
- Labor variances
- Overhead variance
5. Kind of capacities
6. Four variance method
- Variable overhead (VOH) spending
Acc 6a – Strategic Cost Management

Program Outcomes Performance Indicators Course Outcomes
 Describe some behavioral effects of
standard costing.
 Explain how standard costs are used
in product costing.
 Compute and interpret the different
variances for
- materials price and volume
variances
- labor rate and efficiency variances
- factory overhead variances under
the
- price, mix and yield variances for
materials and labor costs
 Prepare journal entries to record and
close out cost variances.
The student shall be able to:
 List and explain purposes of
budgeting systems.
 Identify the components of a master
budget.
 Identify the components of an
operating budget.
 Define budgeting and describe the
concept of budgetary systems.
 Enumerate the major advantages of
budgeting.
 Know the behavioral implications of
budgetary systems.
 Know the role of the budget
committee.
 Learn the contents of the budget
manual.
 Know the basic factors to consider in
preparing the budget.
 Know the factors to consider in a
sales forecast.
 Understand the basic limitations of
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Time
Table
Course Topics Teaching/Learning Activities
(54
hours)
variance
- Variable overhead (VOH) efficiency
variance
- Fixed overhead (FOH) spending
variance
- Fixed overhead (FOH) volume variance
7.
Business Planning and Short-term  Discussion of theories will be through lecture W10
Budgetary System method while for topics with problem analysis,
1. Objectives of budgeting it will be discussed through illustrational
2. Definition and components of a master examples. Textbook will be provided to
budget students and online consultation will also be
3. Budgeting process done.
4. Major benefits of budgeting  Seatwork/Activity/Assignment/Quiz
5. Behavioral implications of the budgetary
system
6. Budget Committee
7. Contents of budget manual
8. Basic factors to consider in preparing the
budget
9. Basic factors to consider in preparing the
budget
10. Basic factor to consider in preparing a
sales forecast
11. Limitations of budgeting
12. Basic terms and procedures to remember in
budgeting
Acc 6a – Strategic Cost Management

Program Outcomes Performance Indicators Course Outcomes
budgeting.
The student shall be able to:
 Describe the different steps in
decision making process and the
managerial accountant's role in that
process.
 Understand the concept of
incremental analysis (differential
costing).
 Understand the concept of relevance
in differential costing analysis.
 Identify relevant costs for specific
(non-routine) decisions and their
respective benefits, giving proper
treatment to other type of costs such
as irrelevant costs (sunk costs),
opportunity costs and unit costs.
 List and explain the different criteria
that must be satisfied by relevant
information in different decision
making areas.
 Explain the relationship between
quantitative and qualitative analyses
in decision making.
The student shall be able to:
 Define responsibility accounting.
 Understand its concepts and
objectives.
 Differentiate cost, profit and
investment centers.
 Identify costs in relation to
performance evaluation by a center
and by a responsible officer. de
Know the forms organization and
management styles, (centralized and
decentralized) and their differences.
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Time
Table
Course Topics Teaching/Learning Activities
(54
hours)
Differential Cost Analysis  Discussion of theories will be through lecture W11 –
1. Decision-making process method while for topics with problem analysis, W12
2. Quantitative versus qualitative analysis it will be discussed through illustrational
3. Concept of incremental analysis examples. Textbook will be provided to
4. Concept of relevance in incremental students and online consultation will also be
analysis done.
5. Make or buy a product or service decision  Seatwork/Activity/Assignment/Quiz
6. Accept or reject an order at a special price
decision
7. Drop/ Eliminate, retain or add a service,
product or departmental decision
8. Shut-down (temporary closing operation)
or continue firm’s operational decision
9. Sell as is or process further the firm’s
products being produced
10. Profit maximization by utilizing limited or
scarce resources (product mic or
combination)
11. Continue using the present equipment or
replace it with a new one
Responsibility Accounting & Performance  Discussion of theories will be through lecture W13 –
Measures method while for topics with problem analysis, W14
1. Centralization versus decentralization it will be discussed through illustrational
2. Advantage of decentralization examples. Textbook will be provided to
3. Disadvantage of decentralization students and online consultation will also be
4. Basic concepts of responsibility accounting done.
5. Objective of responsibility accounting  Seatwork/Activity/Assignment/Quiz
6. Advantages of responsibility accounting
7. Prerequisites to the initiation and
maintenance of an effective responsibility
accounting system
8. Behavioral effects of responsibility
accounting
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Program Outcomes Performance Indicators Course Outcomes
 Know the advantages and
disadvantages of a decentralized
form of organization and
management style.
 Know the requisites of a good
responsibility accounting system.
 Identify the characteristics of a good
performance report.
 Know different performance
evaluation approaches and its
applicability.
 Understand the need of a flexible
budget in variance analysis.
 Understand the behavioral effects of
responsibility accounting.
The student shall be able to:
 Define the meaning of transfer
pricing.
 Know and understand objectives of
transfer pricing.
 Use the general economic rule to set
an optimal transfer price.
 Know the different bases of transfer
pricing:
- Market-based
- Cost-based
- Negotiated-based
The student shall be able to:
 Define balance scorecards and
understand its objectives.
 Know the different non-financial
performance measures in
performance evaluation.
 Know how these non-financial
measures should be used in
evaluating the performance of the
Course Topics
9. Characteristics of good performance
reports
10. Responsibility centers and their evaluation
(performance reports)
- Cost center
- Profit/ revenue center
- Investment center
11. Responsibility accounting performance
evaluation techniques
12. Other issues in segment performance
evaluation
Transfer Pricing
1. Definition of transfer pricing
2. Objectives of transfer pricing
3. Related issues on transfer pricing
4. Terminologies to remember in transfer
pricing
Balance Scorecards & Non-Financial
Measures in Performance
Evaluation
1. Definition of balanced scorecard
2. Objectives of balanced scorecard
3. Basic issued about non-financial measures
in performance evaluation
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Time
Table
Teaching/Learning Activities
(54
hours)
 Discussion of theories will be through lecture W15 –
method while for topics with problem analysis, W16
it will be discussed through illustrational
examples. Textbook will be provided to
students and online consultation will also be
done.
 Seatwork/Activity/Assignment/Quiz
 Discussion of theories will be through lecture W17
method while for topics with problem analysis,
it will be discussed through illustrational
examples. Textbook will be provided to
students and online consultation will also be
done.
 Seatwork/Activity/Assignment/Quiz
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Program Outcomes Performance Indicators Course Outcomes
organization and its employees.
 Understand the need for mission,
vision, and strategy statements in
developing balanced scorecards.
The student shall be able to:
 List and describe the major
influences on pricing decisions.
 Set prices using the different cost
bases of cost-plus pricing formulas.
 Compute the percentage of markup
based on the different kinds of costs.
Course Topics
Pricing Decisions
1. Major factors affecting pricing decisions
2. List of products and their normal price-
setting bases
3. Political, legal and image-related issues in
setting selling prices
4. Normal pricing computations and their
normal formula
5. Important issues and terminologies to
remember in pricing decisions
Time
Table
Teaching/Learning Activities
(54
hours)
 Discussion of theories will be through lecture W18
method while for topics with problem analysis,
it will be discussed through illustrational
examples. Textbook will be provided to
students and online consultation will also be
done.
Seatwork/Activity/Assignment/Quiz

Textbook
Strategic Cost Management and Institutions by Luzviminda S. Payongayong, Ryan C. Roque and Maria Luisa U. Oliveros

Course Requirements
1. Attendance
2. Quizzes
3. Preliminary, Midterm and Final Examination
4. Other requirements deemed necessary

Grading System
The minimum requirement for a passing grade is 75% as reflected in the grading system of the institution which is composed of the following:
Quizzes 30%
Class Standing (Includes attendance, recitation and all other requirements) 30%
Examination 40%

The cumulative system of grading is applied which is one-third of the previous and two-thirds of the present.

Classroom Policies:
1. The class starts and ends with a prayer to be led by assigned student. It is expected that the assigned student prepared short personal prayer for the class.
2. Students attend class regularly at the prescribed time. Policy on attendance should be followed.

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3. Active participation in the discussion and other works assigned to the class.
4. Students should attend class ready for examinations, reports, assignments and projects.
5. Students can use their cellphone and gadgets for academic purposed only.
6. Take examination on scheduled dates, Special examination are only given to students who can present excuse letters signed by their parents and with valid reasons. Secure special permits
from the Treasurer’s Office to be given to the subject teacher.
7. Use the prescribed school uniform.

Academic Honesty
Honesty is expected from the students. Unethical behaviours (immorality, lying, undesirable actuations) are discouraged. Any student caught cheating during examinations or engage in
plagiarism in submitting requirements shall be given a grade of “F” which means failing the requirement or course. Asking help from others or cheating during examination, assignment, report
or research; owning works of others, and other works that show scholastic dishonesty.

Absences
Students are only allowed ten (10) absences for classes of three (3) hours (MWF) while seven (7) absences for TTh classes. Students are asked to present an excuse letter before he/she could be
accepted in class. Special exams are only allowed to students with valid reasons (hospitalization, death of immediate family member, illnesses supported by medical certificate, church-related
activities supported by a letter from Parish Priest). It is the responsibility of the student to monitor his/her tardiness and absences which can be a reason for a grade of “FA” or failed due to
absences. It is also the responsibility of the student to consult his/her teacher, Program Coordinator or the Academic Dean for extra-ordinary cases.

Prepared by: Checked and noted by:

EDRALIN L. GARCIA, CPA EVA KATRINA R. LOPEZ, CPA MARISSSA F. PRUDENCIO,

Ph.D.
Instructor Program Coordinator, COA Academic Dean

Acc 6a – Strategic Cost Management