Infolink university College Department 2016 E.

C 2ND semester
Cost and Management Accounting Course outline
Course Title Cost & management Accounting II
Course Number ACfN3032
Contact Hours (per week)3
Course Objectives & Competences to be Acquired
After successfully completing this course, students will be able to:
 Apply managerial accounting and its objectives in a way that demonstrates a clear understanding of ethical
responsibilities.
 Analyze cost-volume-profit techniques to determine optimal managerial decisions.
 Prepare a master budget and demonstrate an understanding of the relationship between the components.
 Perform cost variance analysis and demonstrate the use of standard costs in flexible budgeting.
Prepare analyses of various special decisions, using relevant costing and benefits.

Course Description
Cost accounting course concerns with fundamental cost concepts, behavior, and analysis and the use of cost
information to develop superior decision making process and outputs. This course introduces the production,
communication, and the use of accounting information within the context of business activities.
WEEKS
Course Contents
2WEEKS
{1ST&2ND }
1. Cost-Volume-Profit Analysis, Absorption, and Variable Costing
1.1 Absorption versus Direct Costing
1.2 The concept of profit contribution
1.3 Cost-volume-profit (CVP) analysis: understanding the concepts of break-even and margin of safety
1.4 Cost Volume Profit Analysis under Absorption Costing
1.5 The use of linear, curvilinear and step functions and how their calculations are used to analyze cost
behavior
1.6 The concepts of cost units, cost centers and profit centers
4 WEEKS
{3RD- 6TH }
2. Relevant information and Decision Making
2.1 Relevant and irrelevant information
2.2. Explain the concept of relevant costs and relevant revenues and how this is potentially different from the
notion of fixed and variable costs.
 2.2. Explain ‘sunk costs’ and why they are considered irrelevant to decisions.
2.3. Explain such terms as ‘opportunity costs’, ‘avoidable costs’, ‘differential costs’ and ‘incremental costs’.
2.4. Marketing Decisions
2.5. Production Decisions 5
3. Information for budgeting, planning and control purposes
3.1. Objectives and concepts of budgetary systems
3.2. Budgeting as a multi-purpose activity,
3.3. Budgeting and behavioral influences,
3.4. Quantitative aids in budgeting: learning curve
3.5. 3.5. theory and application; limiting factors and linear programming,
3.6. Activity-based budgeting,
3.7. Control theory and budgeting,
3.8. Uncertainty and budgeting,
3.9. Identification of relevance, strengths and weaknesses of budgeting and budgetary control
3.10. Types of budgetary systems: fixed and flexible budgets, zero-based budgets, and incremental,
periodic and continuous budgeting, Short-term vs. long-term budgets
3.11. Monitoring and controlling performance; the calculation of variances; the determination of the
causes of variances
3.12. Master budgets
3.12.1. Manufacturing Businesses
3.12.2. Merchandising Businesses
WEEKS
{7TH - 11 TH }
Standard Costing, Flexible Budgeting and Variance Analysis
4.1. The uses and limitations of standard costing methods
4.2. The determination of standards
4.3. Flexible budgets and variances
4.4. Identification and calculation of variances: sales variances (including quantity and mix); cost variances
(including mix and yield); absorption and marginal approaches
4.5. Identification of significant variances and their interrelationship
4.6. The uses of planning and operational variances
4.7. Trends, materiality and controllability of variances
4.8. Uncertainty and variance analysis
4.9. Identification of relevance, strengths and weaknesses of standard costing and variance analysis for
performance and control
5. The pricing of goods and services
5.1. Target and minimum pricing.
5.2. Price /demand relationships,
5.3. The pricing of special orders and short-life products,
5.4. Pricing in service industries,
 5.5. Transfer Pricing
5.5.1. Transfer Pricing: General Rule for Optimal Transfer Price
5.5.2 Transfer Pricing: Imperfectly Competitive Intermediate Product Markets
3WEEKs
{12TH - 14tTH}
6. Responsibility Accounting
6.1 Responsibility Accounting
6.2 Responsibility centers
Performance Measurement
Assessment/Evaluation

Assessment method Weight

Assessment and Presentation 30%
Mid Exam 20
Final Exam 50%

Text Book:
 Horngren, Foster, &Datar. Cost Accounting: A Managerial Emphasis. 9th Ed. 1997
 Horngren, Sunden& Stratton. Introduction to Management Accounting. 11th Ed. 1999
Reference Books

 C.T Homgren, Introduction to Management Accounting 4th to 8 th editions, 1999 USA

 C.T. Homgren, Cost Accounting: A Managerial Emphasis 5th to 8th ecitionsprentice Hall Inc. 1982 to 1994

 Homgren, foster, &Datar, Cost Accounting A Managerial Emphasis. 10 thEcition

 L.E. Heitger Managerial Accounting 1th and 2 nd editions, McGraw Hill , 1998, India

 GetuJemaneh, Management Accounting 1996.

 Ray H.Garrison, Managerial Accounting. 6th edition

 Caluinengler, Managerial Accounting 2nd edition

 L. Gayle Rayburn Principles of cost Accounting using a cost Mangement Approach 4th edition Richard DIR
WIN Inc. 1989.

 Robert X. Kaplan Advanced Management Accounting 1st and 2nd edition prentice Haill, Inc, 1982 and 1989
(Chapters 2, 11,12, and 13 only)