Management Accounting

90-725

Units: 6

Description

Information provided by external financial reporting (financial statements) is compiled too late to be actionable to change an organizations performance, it is also too aggregated for managers to use in making strategic decisions.

Managers must make numerous day-to-day decisions to effectively operate their business profitably, they must also adjust to changing external and internal situations.

The purpose of this class is to familiarize students with the language and techniques of managerial accounting and to develop and sharpen their analytic capabilities.

Students will gain insight into cost systems and cost behavior, how to evaluate performance and compare alternatives. This course focuses as much as possible on the practical application of managerial analysis. This course relies heavily on performing calculations and interpreting the results.

Material is presented in a combination of lecture and modeling exercises. It is assumed that participants have a general knowledge of accounting as well as a basic knowledge of Excel.

Learning Outcomes

Objective # 1: Concepts and principles

According to Investopedia “Management accounting is the process of identifying, analyzing, recording and presenting financial information that internal management can make informed business decisions concerning the future.”

Students should be able to describe managerial accounting and its differences with financial accounting, its place in the organization, and it uses.
Students should understand the nature of operations, including different types and classifications of costs.
Students should be able to describe business activities and eco-efficiency measures
Students should be able to describe and illustrate financial statements including balance sheet, statement of cost of goods, and income statement

Objective # 2: Developing information from cost systems and understanding cost behavior

Students should be able to describe cost accounting systems
Students should be able to classify costs into variable, fixed or mixed costs
Students should be able to describe and illustrate a job order cost accounting system for both a manufacturing and service business
Students should be able to describe and illustrate a process cost accounting system for both a manufacturing and service business
Students should be able to illustrate the analysis of cost changes between periods
Students should be able to describe three methods for allocating factory overhead
Students should demonstrate analytical capabilities and cost behavior such as break-even, and cost-volume-profit analysis

Objective # 3: Decision making, evaluating performance & comparing alternatives

Students should understand the objectives of budgeting and forecasting
Students should be able to compute, interpret and evaluate variances from standard costs
Students should be able to prepare responsibility accounting reports for a cost center and a profit center
Students should be able to perform a differential analysis for a variety of managerial decisions
Students should be able to describethe nature and importance of capital investment analysis and diagram the capital rationing process. Including the ability to perform return calculations
Students should be able to understand to implications of costs on cash flow
Students should be able describe and calculate the basic financial statement analytical methods to illustrate how to assess profitability

Prerequisites Description

95715 or 90723