Lifelong Learning for a Brighter World

Jing Zhou, McMaster University Continuing Education Accounting graduate Jing Zhou, McMaster University Continuing Education Accounting graduate

Accounting

Cheques and balances. It all adds up.

Work towards your CPA designation!

ACC 928 - Introductory Management Accounting C32

Academic Credit Value:
3 units
Course Delivery Mode:
Online Self-Study (OSS)
Hours of Study:
42 hours
Course Prerequisite(s):
ACC 925 Introductory Financial Accounting or equivalent. Be advised: Students who do not meet the pre-requisites will be required to withdraw. In such cases, CCE’s withdrawal/refund policies will apply.
Course Anti-requisite(s):
N/A
Instructor Name:
Michael Michalski
Course Dates:
07/15/2019 - 12/14/2019



Required Course Materials:
Horngren's Cost Accounting: A Managerial Emphasis, Eighth Canadian Edition Plus MyLab Accounting, Pearson Canada.
Optional Course Materials:
N/A
Course Description:
Course ACC 928 is part of a sequence of several courses in the Accounting Diploma Program offered by McMaster University. As an introductory course, it is designed to help you build a foundation of knowledge and skills in preparation for other courses in management accounting.

Since ACC 928 is an introductory course, it is expected that you will begin to appreciate the decision-making and conceptual issues that will be introduced. Your understanding of these issues will develop as you pursue your study and career in accounting.

Learning Outcomes:
The broad aims of the course are to provide you with a sound introduction to the field of Management Accounting.

At the end of this course, students will have been exposed to and demonstrated the ability to:

  • Produce cost information; product costs and business function costs
  • Develop cost reports in a reasonable format
  • Confidence in interpretation use of cost information for management purposes
  • Identify the advantages and disadvantages of the various methods used to determine product and business function costs and suggest possible alternatives in specific situations
Course Evaluation
Assignments (5 @ 8%) 40%
Final Examination 60%

NOTE:  A passing grade on the final examination is required to pass the course.

The final exam must be written on or before your course end date/final exam date. Students who have submitted all assignments ahead of schedule may opt to write their final examination prior to the posted examination/course end date. Although students are permitted to accelerate through course material, no student will be permitted to schedule/sit the final examination earlier than two (2) months post course start date. After the final exam is written no further assignment submissions will be accepted. 

Course Format:
This course is designed to present the fundamental concepts and theories in introductory management accounting and promote the application to the workplace and professional practice. Course activities will include instructor presentations, required readings and experiential learning activities (i.e. case studies, group discussions, projects, etc.).
Assignment Submission:
Course assignments are submitted to the appropriate A2L Assignment folder by the specified due date
Late Coursework:
Late assignments will be subject to a 2% per day late penalty (includes weekends and holidays) for up to seven (7) days. After this date, no assignments will be accepted and a grade of zero (0) will be applied.  Extensions for course work must be approved by the instructor before the due date (see Academic Regulations below), and will be granted for illness or emergencies only. Students may be asked to submit supporting documentation for an extension request.   NOTE:  This policy applies to assignments and other hand in type coursework only.  This policy does not apply to discussion board topics/postings which do not allow for late postings/contributions.

Policy & Procedures:

Academic Regulations (Attendance, Coursework, Tests/Exams):
In accordance with McMaster University’s General Academic Regulations, “it is imperative that students make every effort to meet the originally scheduled course requirements and it is a student’s responsibility to write examinations as scheduled.” Therefore, all students are expected to attend and complete the specific course requirements (i.e. attendance, assignments, and tests/exams) listed in the course outline on or by the date specified.  Students who need to arrange for coursework accommodation, as a result of medical, personal or family reasons, must contact the course instructor within 48 hours of the originally scheduled due date. It is the student’s responsibility to contact the Program Manager/Program Associate to discuss accommodations and procedures related to deferred tests and/or examinations within 48 hours of the originally scheduled test/exam, as per policy.  Failure to contact the course instructor, in the case of missed coursework, or the Program Manager/Program Associate, in the case of a missed test/examination, within the specified 48 hour window will result in a grade of zero (0) on the coursework/exam and no further consideration will be granted.  

*Note: Supporting documentation will be required but will not ensure approval of accommodation(s).

Academic Integrity
You are expected to exhibit honesty and use ethical behaviour in all aspects of the learning process. Academic credentials you earn are rooted in principles of honesty and academic integrity. Academic dishonesty is to knowingly act or fail to act in a way that results or could result in unearned academic credit or advantage. This behaviour can result in serious consequences, e.g. the grade of zero on an assignment, loss of credit with a notation on the transcript (notation reads: “Grade of F assigned for academic dishonesty”), and/or suspension or expulsion from the university.

It is your responsibility to understand what constitutes academic dishonesty. For information on the various types of academic dishonesty please refer to the Academic Integrity Policy, located at http://www.mcmaster.ca/academicintegrity/

The following illustrates only three forms of academic dishonesty:
Plagiarism, e.g. the submission of work that is not one’s own or for which other credit has been obtained.
Improper collaboration in-group work.
Copying or using unauthorized aids in tests and examinations.
Academic Accommodations:
Students with disabilities who require academic accommodations must contact the Student Accessibility Centre (SAS) to meet with an appropriate Disability Services Coordinator. To contact SAS, phone 905-525-9140 ext. 28652, or email sas@mcmaster.ca. For further information, consult McMaster University’s Policy for Academic Accommodation for Students with Disabilities.
On-line Elements:
In this course, we will be using on-line elements, which may include email, Avenue to Learn, WebEX, and external web sites.  Students should be aware that, when they access the electronic components of this course, private information such as first and last names, user names for the McMaster e-mail accounts, and program affiliation may become apparent to all other students in the same course. The available information is dependent on the technology used. Continuation in this course will be deemed consent to this disclosure. If you have any questions or concerns about such disclosure please discuss this with the course instructor. 
Turnitin.com:
In this course, we will be using a web-based service (Turnitin.com) to reveal plagiarism.  Students will be expected to submit their work electronically to Turnitin.com so that it can be checked for academic dishonesty.  Students who do not wish to submit their work to Turnitin.com must still submit a copy to the assigned Assignment folder and add a note in the comment section that they do not wish to have the paper scanned by Turnitin.  Those files will not be selected for submission.  No penalty will be assigned to a student who does not submit work to Turnitin.com.  All submitted work is subject to normal verification that standards of academic integrity have been upheld (e.g., on-line search, etc.).  To see the Turnitin.com Policy, please go to www.mcmaster.ca/academicintegrity.
Course Changes:
The instructor reserves the right to modify elements of the course and will notify students accordingly.
Course Withdrawal Policy:
Policies related to dropping a course and course withdrawals are posted to the Centre for Continuing Education’s program webpage, FAQs & Policies (https://www.mcmastercce.ca/cce-policies#Dropping). 
Storm Closure Policy:
In the event of inclement weather, the Centre for Continuing Education will abide by the University’s Storm Closure Policy: https://www.mcmaster.ca/policy/Employee/storm_emergency_policy.pdf, and will only close if the University is closed. All in-class courses, exams and room bookings by internal and external clients will be cancelled if the Centre for Continuing Education is closed. On-line courses will take place as scheduled.
Grading Scale:
 Grade Equivalent
Grade Point
Equivalent Percentages
A+ 12 90-100
A 11 85-89
A- 10 80-84
B+ 9 77-79
B 8 73-76
B- 7 70-72
C+ 6 67-69
C 5 63-66
C- 4 60-62
D+ 3 57-59
D 2 53-56
D- 1 50-52
F 0 0-49
Course Schedule:
Unit I - Management Accounting – Role, Terms and Purpose
Unit I introduces some key concepts that underlay the field of management accounting and the work of management accountants. The fundamental concept of why indirect costs should be allocated to cost objects is introduced.  The other tools and principles that are covered include:

  • major purposes of management accounting,
  • role of the Management Accountant as a contributor to strategic decisions and their place in the management team,
  • functions of the management accountant,
  • professional ethical standards to which management accountants are held.
  • Distinguishing between cost tracing and cost allocation as it pertains to direct and indirect costs,
  • Examining cost behaviour and the concepts of cost drivers, fixed costs and variable costs are introduced,
  • The introduction of unit cost concepts,
  • The distinction between inventoriable costs and period costs is examined,
  • The three different types of inventories are introduced,
  • The three different general types of business organizations are reviewed.
  • Unit 1 Resource Materials:
    ∙ Text: Chapters 1 & 2 (See Module for specific pages)
    ∙ Course Guide (or A2L): Module notes for Unit I
    ∙ Practice Exercises for Chapters 1 & 2
    ∙ Optional Resource: Publisher’s Website  (MyAccountingLab)
    ∙ Assignment One: Posted on our Avenue to Learn site.

    Unit I is divided into the following two (2) modules:
    Module 1 – The Accountant’s Vital Role in Decision-Making
    Module 2 – An Introduction to Cost Terms and Purposes

    Learning Outcomes
  • Following the completion of Unit I the student will:
  • Explain how management accounting data are essential to the process of rational operating and strategic decision-making;
  • Explain how business functions help management accountants organize accounting information;
  • Identify the five steps of decision-making and the role of relevant accounting information;
  • Describe key guidelines management accountants follow and roles they assume to support management decisions;
  • Distinguish among corporate governance, professional codes of conduct, ethics and corporate social responsibility.
  • Identify and distinguish between two manufacturing cost classification systems: direct and indirect, prime and conversion;
  • Differentiate fixed from variable cost behavior and explain the relationship of cost behavior to direct and indirect cost classifications;
  • Interpret unitized fixed costs appropriately when making cost management decisions;
  • Apply cost information to produce a GAAP-compliant income statement showing proper cost of goods sold and a balance sheet showing proper inventory valuation;
  • Explain cost identification, classification, and management systems and their use within the decision framework.

  • Unit II – Job Costing & Spoilage
    Unit II builds on the concepts previously introduced, that distinguish which types of costs can be traced and which require allocation. The basics behind traditional job costing models are introduced in this unit and the concept of spoilage, as it relates to job costing, is covered.  The key concepts students can expect to cover are as follows:

  • The concepts of cost pools and cost allocation are described,
  • The seven-step general approach to job costing is shown,
  • Business records as source documents for costing purposes are introduced,
  • The differences between normal costing and actual costing are shown,
  • End of period adjustments to reconcile the Manufacturing Overhead Control account with Manufacturing Overhead allocated.
  • Distinguishing between normal spoilage and abnormal spoilage,
  • Noting the impact of calculating unit cost by both including or excluding normal spoilage.
  • Reworked units and scrap.
  • Unit II Resource Materials:
    ∙ Text: Chapters 4 and 18 (as it pertains to job costing)  - See Module notes for specific pages
    ∙ Practice Exercises for Chapters 4 and 18 (as related to job costing)
    ∙ Optional Resource: Publisher’s Website  (MyAccountingLab)
    ∙ Assignment Two:  Posted on our Avenue to Learn site.

    Unit II is divided into the following two (2) modules:
    Module 1 – Job Costing
    Module 2 – Spoilage (as it relates to job costing)

    Learning Outcomes
  • Following the completion of Unit II the student will:
  • Identify and explain the elements of an effective job costing system;
  • Apply the decision framework in a seven-step method and assign total actual costs to a distinct service;
  • Apply the decision framework in a seven-step method and assign total actual costs to a distinct product;
  • Distinguish among three methods – actual, budgeted, and normal – to calculate job-cost allocation rates and assign indirect costs to a distinct job;
  • Analyze the flow of costs form direct and indirect cost pools to inventory accounts, including adjustments for over- and under-allocated costs.
  • Distinguish among spoilage, rework, and scrap and apply the appropriate methods to account for the costs of normal and abnormal spoilage;
  • Apply job cost allocation procedures to account for spoilage in job costing;
  • Apply cost allocation procedures to account for reworked units and scrap.

  • Unit III – Activity Based Costing and Management

    Activity-Based costing is introduced as a refinement of job costing principles.  It suggests methods to review indirect costs with a view to reordering those costs as they relate to the various activities or steps that might be part of any operational process.  The limitations of using a single indirect cost pools are illustrated.  Related concepts include:

  • Describing the implications of inaccurate cost information as it relates to the over-costing and under costing of specific products,
  • The steps in refining a costing system,
  • Characteristics of job costing systems that may indicate the need for the implementation of activity- based costing principles.​

  • Unit III Resource Materials:
    ∙ Text: Chapter 5
    ∙ Course Guide (A2L): Module notes for Unit III
    ∙ Practice Exercises for Chapters 5
    ∙ Optional Resource: Publisher’s Website  (MyAccountingLab)
    ∙ Assignment Three:  Posted on our Avenue to Learn site.

    Unit III is divided into the following module:
    Module 1 – Activity Based Costing and Management

    Learning Outcomes
    Following the completion of Unit III the student will:
  • Identify the basic elements of activity-based costing systems as distinguished from traditional systems, and explain how preventable under-costing and over-costing of products and services affects profitability;
  • Identify and explain the problem of preventable over- and under-costing;
  • Apply the cost hierarchy to develop an activity-based costing (ABC) system;
  • Assign costs using activity-based costing (ABC);
  • Explain the benefits of activity-based costing (ABC) systems for activity-based management (ABM)

  • Unit IV - Period Cost Application & Income Effects of Denominator Level on Inventory Valuation

    Unit IV continues to develop the concepts associated with allocating indirect costs.  It adds to the reasons why accurate cost allocation is important, while difficult to achieve.  It describes some reasons why achieving cost allocation decisions that are acceptable to all parties can be difficult. 

    Students will examine manufacturing fixed costs and how their treatment as either an inventoriable cost or a period cost, impacts on operating income for a specific period.  The concept of plant capacity specifically in relation to absorption costing is also explored.

    Specific areas of study include:
  • Criteria for guiding cost allocation decisions,
  • Allocation of indirect costs using the single rate and the dual rate methods,
  • Allocating the costs from support departments to operating departments using one of:
    1. Direct allocation method
    2. Step-Down allocation method
    3. Reciprocal method,
  • Allocating common costs using the stand-alone and incremental cost method.
  • Deriving operating income using the absorption costing versus the variable costing methods.
  • Reconciling the different operating income reported between these two methods.
  • Describing the care needed to ensure that inventories are not unnecessarily built up by virtue of using the absorption costing method.
  • Outlining the differences between the four alternative capacity concepts:
  • Theoretical capacity
  • Practical capacity
  • Normal capacity
  • Master-budget capacity.

  • Unit IV Resource Materials:

    ∙ Text: Chapters 14 & 9
    ∙ Course Guide (A2L): Module notes for Unit IV
    ∙ Practice Exercises for Chapters 9 & 14
    ∙ Optional Resource: Publisher’s Website (MyAccountingLab)
    ∙ Assignment Four:  Posted on our Avenue to Learn site.

    Unit IV is divided into the following two (2) modules:
    Module 1 – Period Cost Application
    Module 2 - Income Effects of Denominator Level on Inventory Valuation

    Learning Outcomes
  • Following the completion of Unit IV the student will:
  • Apply relevance as a criterion to decide how to allocate non-manufacturing (period) costs;
  • Evaluate and select between a single-rate and dual-rate cost method to apply period costs of IT services;
  • Analyze how the selection of the simple or dual-cost allocation rate affects the calculation of efficiency variance;
  • Evaluate and select among three cost allocation methods for the product-sustaining inventoriable period cost and a facilities-sustaining period cost;
  • Analyze cost allocation procedures to apply common costs and justify contractual reimbursement terms.
  • Identify the factors important to choosing the denominator level used to calculate fixed overhead allocation rates;
  • Explain how the choice of denominator affects capacity management, costing, pricing, and performance evaluation;
  • Distinguish absorption from variable costing; prepare and explain the differences in operating income under each costing policy;
  • Distinguish throughput costing from variable costing and absorption costing and explain differences in operating income under each costing policy;
  • Explain productivity measurement under each of the three costing policies.

  •  Unit 5:  Fundamentals of Process Costing Systems
    The fundamentals of process costing systems is the focus of Unit 5.  Process costing is placed at one end of the costing spectrum, with job costing at the other end. Included in this unit is a study of the types of products that lend themselves to process costing systems.  We also revisit the concept of spoilage, this time as it relates to process costing.  Specific areas of study include the following:

  • Five step model describing how to calculate the costs of completed units with those that are partially completed,
  • Concept of equivalent units,
  • Preparation of journal entries for process costing systems,
  • Weighted Average process costing method,
  • First-In, First-Out process costing method.
  • Refreshing the difference between normal spoilage and abnormal spoilage,
  • The five-step procedure for process costing with spoilage,
  • The differences in calculating unit costs when considering the impact of spoilage using both the Weighted Average Method and the FIFO method.
  • Unit V Resource Materials:
    ∙ Text: Chapters 17 & 18 (as it relates to Process Costing)
    ∙ Course Guide (A2L): Module notes for Unit V
    ∙ Practice Exercises for Chapters 17 & 18
    ∙ Optional Resource: Publisher’s Website (MyAccountingLab)
    ∙ Assignment Five: Posted on our Avenue to Learn site.

    Unit V is divided into the following two (2) modules:
    Module 1 - Process Costing
    Module 2 - Spoilage, Rework and Scrap (as it relates to Process Costing)

    Learning Outcomes
  • Following the completion of Unit V the student will:
  • Distinguish process- from job-costing allocation methods, within the decision framework, and apply the weighted average method of inventory valuation when the beginning work-in-process is zero;
  • Contrast the journal entries for a process costing system when there is and when there is not ending work-in-process inventory using the weighted-average method of inventory valuation;
  • Apply the weighted-average method of process costing to calculate the cost of goods manufactured and transferred out when there is both beginning and ending work-in-process inventory;
  • Analyze weighted-average, FIFO, and standard costing methods of inventory valuation of costs of goods manufactured and transferred out;
  • Apply process costing methods to report transferred-n costs and operations costing.
  • Distinguish among spoilage, rework, and scrap and apply the appropriate methods to account for the costs of normal and abnormal spoilage;
  • Apply process costing methods to account for the spoilage using weighted average and first-in-first- out (FIFO) methods;