NEW YORK UNIVERSITY
MANAGERIAL ACCOUNTING C10.0002.01
Course Outline
Summer 2005 Session I
Instructor: Francois Brochet
Room 10-99 KMEC, x 80024 TA: King C. Wong
Off. Hrs: TR: 5:00-6:00pm and by appointment. E-mail: kcw228@stern.nyu.edu
E-mail: fbrochet@stern.nyu.edu Office Hours: Wednesdays 8-9pm
COURSE OBJECTIVES
An understanding of the evolving role that managerial accounting has played and is expected to play in servicing the informational needs of managers in their planning, organizing, and controlling functions. Planning encompasses short- and long-term operating, tactical, and strategic decision making. The managerial accounting function can be conceived of as serving three somewhat distinct but related purposes:
Two key themes through the course are the following : While "cost accounting" systems were first introduced to serve managerial needs, they were soon also used for computing product costs for inventory valuation for external reporting. The latter purpose then came to dominate the orientation of the single system one commonly found in most organizations. A single reporting system cannot perfectly serve all four needs. However, reflecting organizational inertia and the high information processing costs of an earlier era, one often still finds a single system in place, primarily oriented towards the GAAP requirements for external reporting. With advances in information technology, this is changing and the ability to analyze, aggregate, and report along many dimensions can be expected to improve. The appropriate dimensions will vary with the setting at hand and universal prescriptions are not appropriate. We shall further explore this theme in the context of the new competitive and technological environment.
The cost of alternative in a decision setting is the sacrifice involved in adopting it -- which is context dependent. However detailed the reporting system, not every context can be anticipated and reported upon. Periodic reporting systems can, at best, direct attention and support a preliminary conclusion. Managers will generally need to access more raw data to conduct a sound and definitive analysis.
The key notions here are those of sunk costs, out-of-pocket costs, incremental costs, relevant costs (and benefits), and opportunity costs. These notions will be introduced and examined against the backdrop of the processes of cost accumulation, assignment, allocation, and absorption that underlie traditional cost accounting systems so as to impart a thorough appreciation of the contributions and limitations of historical product costs for decision making.
An ability to think systematically about how the existing reporting systems in any given setting can be improved upon so as to better serve managerial informational needs for planning and control.
TEXT (Required): Managerial Accounting by Garrison and Noreen Tenth Edition (Irwin-McGraw-Hill 2000)
PEDAGOGY & CLASSROOM PROCEDURES:
A mix of Lectures, Problems and Cases will be employed. You should read the assigned readings before class and bring the text to class. Our discussions will supplement the text and often not go over everything in the text. You are nevertheless responsible for all the material assigned from the text. Questions are encouraged at all times. Class participation is essential. You will be invited by name to respond to questions or make comments. Regularly scheduled homework and quizzes are an integral part of your learning experience and also your evaluation.
EVALUATION:
Final Exam 60 %
Quizzes 30 %
Homework Assignments 5 %
Participation 5 %
Revised COURSE SCHEDULE
Overview of managerial functions, managerial informational needs, and management accounting's role in servicing these needs. Differences between the informational needs of managers and outsiders, and between managerial accounting and financial accounting.
Read Chapter 1
Costing objects; Fixed vs. Variable Costs; Direct vs. Indirect Costs Product vs. Period Costs.
Reading : Chapter 2
Homework Assignment: E2-4, P2-11, P2-12
II. PRODUCT COSTING SYSTEMS
Product costing systems as attention directing systems, and product costs as estimates of the long run demands placed on the resources of the firm by individual products. Cost pools and the cost accumulation, assignment, allocation and absorption process for a multidepartmental production organization (including service departments). The use of predetermined overhead rates. Under/Over absorbed overhead. Job order costing (manufacturing and non-manufacturing), introductory service department cost allocation. Process costing (manufacturing and non-manufacturing), introductory service department cost allocation.
Reading : Chapter 3
Homework Assignment: E3-7, E3-16, P-3-17
Reading : Chapter 4
Homework Assignment: E4-2, E4-6, P4-14
Reading : Chapter 8
Homework Assignment: E8-3, E8-10, P8-13
III. COST INFORMATION FOR DECISION MAKING
Reading : Chapter 6
Homework Assignment 5: E6-1, E6-3, P6-9
Reading : Chapter 13
Homework Assignment: P13-15, P13-16, P13-20
Reading : Chapter 14
Homework Assignment: E14-5, E14-9, E14-11
Location: Tisch LC10
Quiz rules:
No make up quizzes
I will give 5 of them throughout the semester, all will count towards your final grade, 6% each. If you miss one quiz, the missing 6% will be split between your quizzes and your final exam. If you miss more than one quiz, too bad, you can only carry forward 4% per quiz to the final exam.
No notes, no communication with other students. Calculators allowed, and you will need one.
For those who come in late (assuming a quiz is given at the beginning of class): you can choose not to take the quiz, but in that case, you immediately tell me so (first thing you do when you step in the classroom). If you do take the quiz, you do not have extra time.
Final rules:
The final exam will be in-class. It is closed-book, but you are allowed to bring a cheat sheet (11x8.5, two sided). Do not forget your calculator. All substantial material covered in class and in your homework assignments is fair game. This means attendance is valuable.
A make up exam will be provided under exceptional circumstances (if you're sick, heartbroken, or have a family emergency) and only if I receive a notice* at least 6 hours before the exam. Valid excuses do not include: hangovers, not enough time to study, your rommate's new girlfriend is loud, etc.
* smoke signals and telepathy do not qualify
Homework rules:
Although we might sometimes go a little faster than what is indicated in the (tentative) course outline above, you can consider the due dates for homework as cast in stone. On the other hand, if we are slightly behind, I will give an extension. It is in your best interest to do the homework without looking at the solutions, but it is all about self-discipline and learning style.