HARAMAYA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

COURSE OUTLINE

Course code: AcFn. 3142 Pre-requisite: Acct. 3141

Course Title: COST AND MANAGEMENT Contact Hours per Semester: 45
ACCOUNTING-II
Credit Hours: 3
Prepared by: Mohammed A.

COURSE DESCRIPTION AND OBJECTIVE:

This course builds on the knowledge acquired from the course “Cost and Management
Accounting- I”, which was studied in the previous semester. It introduces some new concepts and
the use of Accounting tools and techniques in the analysis, planning and control of business
operations and in Management decision making processes. Topics to be covered in this course are
CVP analysis, Master budgets and Flexible budgets, Pricing decisions, Standard costing ,
variance analysis etc. The central focus of this course is to help key managers/other decision
makers to make better decisions by using different managerial tools in their business strategies.
Thus, this course enables the students to apply in actual practice these managerial tools, in a real
world business environment after their graduation.

COURSE CONTENTS:

Chapter-One: COST-VOLUME-PROFIT ANALYSIS

 Cost-volume –profit assumptions and terminology
 Essentials of CVP analysis
 The break even point
 Using CVP analysis for making decisions
 Sensitivity analysis and uncertainty
 Cost planning and CVP
 Effect of sales mix on income

Chapter-Two: MASTER BUDGETS AND RESPONSIBILITY ACCOUNTING

 Budgets and the budget cycles
 Advantages of budgets
 Types of budgets
 Steps in developing operating budgets
 Budgets and responsibility accounting
 Responsibility and controllability

Chapter-Three: FLEXIBLE BUDGETS AND VARIANCE ANALYSIS

 Static budget and variance
 Flexible budget and Variance
 Efficiency variance and price variance for input
Chapter-Four : RELEVANT PRICING AND THE DECISION-MAKING
 The concept of relevance
 Special order
 Sell or process further
 Deletion or addition of product, service or department
 Make or Buy decision
 Product mix under capacity constraint
 Pricing decision

Chapter-Five: STANDARD COSTING AND VARIANCE ANALYSIS

 Material variance
 Labor Variance
 Overhead Variance
 Net manufacturing variance
 Sales Variance

Assessment/ The evaluation scheme will be as follows:

Evaluation Test Test Test Case Analysis Assign Fina Total
1 2 3 ment 1 l
10 10 10 10% 10% 50% 100
% % % %
Ch. 1 Ch. Ch. 4 Ch. 5-7 Ch. 1-4 All Ch.
3

REFERENCES:
1. Hongreen,Foster,Datar, Cost Accounting a managerial Emphasis; 10th Ed.
2. Edmonds,Thay, Managerial accounting concepts, 2000
3. Dminiak,Louderbrack , Managerial Accounting, 8th Edition
4. Hilton, Maher, Selto, Cost Management, 2000