The University of North Carolina at Greensboro Bryan School of Business and Economics Department of Accounting Spring, 2007

Save this PDF as:

Size: px
Start display at page:

Download "The University of North Carolina at Greensboro Bryan School of Business and Economics Department of Accounting Spring, 2007"


1 The University of North Carolina at Greensboro Bryan School of Business and Economics Department of Accounting Spring, 2007 MBA Cost Management Systems Instructor: David Upton Office: 421 Bryan Telephone: Course Website: The course will use Blackboard for electronic communications and postings Office Hours: T/W 4.00pm-6:00pm. Anytime I am in my office you may call or stop by to ask questions. I ask that you make an appointment for longer discussions. You may leave messages on my door, or in my mailbox in the Department Office, Room 418. My home phone number is 336/ , and you can call me at home if you have trouble reaching me elsewhere, or if you have an emergency. Course Prerequisite: MBA 602 Course Objective. Managerial Accounting is a discipline that involves developing and using financial and non-financial information to help managers in planning, controlling, and decision-making. The following are the objectives of this course: To help you understand the role of accounting in the planning, controlling and decision- making functions of the management process. To help you understand the major theoretical and practical issues impacting on management s use of accounting information for planning, controlling and decision-making. To help you utilize analytical and problem solving skills, through the application of managerial accounting concepts to the solution of practical problems and case studies. To help you understand the limitations of traditional managerial accounting systems and the benefits of contemporary systems in sustaining competitive advantage and spurring innovation. To achieve these objectives, the course will (1) cover the basics of many of the standard managerial accounting methods used in organizations; (2) provide the skills necessary to use managerial accounting information to make business decisions; (3) illustrate how managerial accounting information can be used to formulate and implement strategy in a variety of organizational environments; and (4) demonstrate how the design of managerial accounting systems affect innovation and human behavior in organizations. Textbook: Managerial Accounting: An Introduction to Concepts, Methods, and Uses by M.W. Maher, C.P. Stickney, and R.L. Weil, Thomson Publishing (South-Western), (ninth edition) ISBN for the text is

2 Required cases: John Deere Component Works (A) (Harvard case #: ) Chemical Bank: Implementing the Balanced Scorecard (Harvard case #: ) These can be purchased directly from Harvard Business Online. Grades: Final grades will be assigned based on the grade scale presented below. The basis for grades is as follows: A A B B B C C F Assignment Grade Percentage Participation 10% Case write-ups 10% Homework 20% Midterm Exam 25% Final Exam 35% Participating in Classroom Discussion Participating in class provides you with the opportunity to gain from the diverse experiences and talents of your colleagues. To facilitate class discussion, I will sometimes call on volunteers in class, but I will also call on you even if you have not volunteered. I will do this for two reasons. First, it is necessary for your future success that you be able to articulate your views and defend them when others in your organization request your opinion. Second, it increases the level of preparation for class. When I call on you, I do not expect you to necessarily have "The" answer, even if there is one. I expect you to indicate a familiarity with the issues of the case, problem or chapter under discussion and be willing to share your opinion with your colleagues. Class participation is evaluated subjectively and graded on the basis of my discretion and observations of individual performance. You will be evaluated by "how much you contribute," not by "how much you speak." That is, your addition to everyone's understanding will enhance your class participation grade. Talking merely to accumulate minutes of debate time will not increase your class performance grade. Those of you who do not contribute can expect a lower class participation grade. Cases and Write-ups

3 The cases assigned (see course schedule) are mainly Harvard bestsellers and will serve as a basis for class discussions illustrating the strengths and weaknesses of cost management systems. While these cases do not contain all the information to be found in real-world decisions, they are useful in developing skills in analyzing common accounting-related business problems by applying theoretical concepts and techniques learned in class to business practice in the broader context. You are required to read all cases, identify the main issues, conduct a thorough analysis, answer the assigned questions (for submission), and be ready for case discussions in class. The questions I assign on the cases are given to guide your analysis; merely answering these questions will not suffice for discussions in class where we will discuss a broader range of issues concerning the case. You may be called upon to answer any question pertaining to the case in class. You may also be called upon to question, challenge, or critique another individual s answers or comments, and you should be able to defend your own arguments. I also expect you to contribute to discussions even without being invited to do so. Your contribution to case discussion will influence your class participation grade. I require submission of written notes for the assigned cases. The notes should address the assigned questions at the end of the cases. Case questions are generally quantitative and should help prepare you for the class discussions. Keep your written responses brief there is a two (2) page limit. Clearly presented note form submissions are acceptable. Homework Accounting is not a great books discipline. Real understanding is developed through working with accounting problems. Homework problems are assigned to enhance your understanding of accounting concepts, rules, and techniques, and to understand how accounting information is used in business settings. You are required to turn in assigned problems on the due dates as given below. In total, five homework sets should be turned in during this course. Solutions to homework problems will be posted on Blackboard soon after the due dates for the problems. You should submit hard copies of your assignments to me in class. If you are unable to attend class, you should your assignment to me before the start of the missed class. NO LATE HOMEWORK WILL BE ACCEPTED. Homework grading will be based in part on effort basis and not solely on the correctness of your answers. You can discuss your assignments with others, and you may ask the instructor for assistance (via , in person, or by phone), but the work you turn in should be entirely your own. Copying other students work is viewed as academic misconduct and will be responded to accordingly. NOTE: Failure to diligently work through homework problems is usually a recipe for failure in the course. Working diligently on the problems will significantly enhance your understanding of the course material and take you much further toward passing and obtaining a good grade in the course. Class format I will begin each class with a lecture on major theoretical concepts and techniques, practical applications, and innovative approaches, as appropriate. Following the lecture, you will work on preassigned problems to test your understanding of the concepts and techniques learned in the lecture. This will reinforce your understanding of the course material and prepare you for the challenging problems in the homework and the exams. These problems typically do not have as much background information or detail as the conventional cases do and so enable us to get to the issue quickly. I will post the questions on Blackboard well in advance of the scheduled class. I encourage you to attempt to answer these questions to the best of your ability before class and come prepared to discuss possible solutions. You can then have another attempt at answering the questions in class after the concepts and techniques

4 have been presented in the lecture. You are permitted to work on these assignments with other students. In class, you are permitted to use any resource to answer the questions like lecture notes, book, calculators, etc. I will also assist you if you encounter difficulties in answering these questions. You are not required to turn in your answers to these in-class assignments. We will discuss the solutions in class. This discussion will enable you to fill in any gaps in your understanding of the basic concepts and tools in the course. The solutions to these problems/mini-cases will be posted on Blackboard after class. Your participation in the discussion of the problems/mini-cases will influence your class participation grade. I am not simply looking for correct answers but a willingness to participate in the class discussions and, more importantly, a good articulation of your thought processes. Harvard Business Review Articles The Harvard Business Review articles posted on Blackboard provide you with additional practicerelated information on the topics taught in this course. These articles are written by leading management thinkers and will encourage you to think of innovative ways of applying the topic in your organization. I encourage you to read the relevant article before the scheduled class. Academic Integrity Policy Each student is expected to complete all requirements of this course in all respects in conformity with UNCG s Academic Integrity Policy. The paragraph below, which was taken from this policy, highlights students responsibilities regarding academic integrity. Students should recognize their responsibility to uphold the Academic Integrity Policy and to report apparent violations to the appropriate persons. Students who do not understand the policy or its application to a particular assignment are responsible for raising such questions with their faculty member. You may want to examine the Academic Integrity Policy yourself at: ( Other Comments While it is understood that graduate students have busy schedules that include business conflicts, please exercise good judgment in missing class only when necessary. Part of this responsibility is to understand that assignments will be accepted early, but no assignment will be accepted late. In the event that you must miss class, assignments due at the beginning of class can be sent electronically, but must be received prior to the start of the class. You may make arrangements with me to take tests early; no tests will be given late. Keep in mind, in a class meeting for only 7 weeks absences can quickly become a problem. Thus, excessive absences can and will result in direct and indirect grade reductions. There are no opportunities for extra credit in this course. The material in this course may be difficult for some. However, it is vital to your professional success. If you are having problems understanding the topics presented, see me. Don t wait until it is too late. Since this course builds on cumulative knowledge, problems in the early portion of the class will only compound as the semester progresses.

5 TOPICS AND ASSIGNMENTS Weekly Schedule Note: Any clarification or revision in the assignments will be announced in class. Announcements may also be sent via lists maintained by the Bryan School. WEEK ONE Part 1: Overview and Basic Concepts 3/13 (1) Managerial Accounting Framework C1 None Read HBR article: You Need A New Cost System When, by Robin Cooper. Discussion of course objectives, format, schedule, and requirements. Lecture: Introduction to managerial accounting. (2) Product Costing C2, C5, Read HBR article: One Cost System Isn t Enough, by Robert Kaplan. None Lecture: Introduction to product costing basic cost concepts: cost classification, cost assignment, and cost behavior. Lecture: Discussion of cost allocation. Lecture: Discussion of traditional costing techniques.

6 WEEK TWO 3/20 (3) Activity-Based Management C3 1.21, 1.23, 1.26, 2.34, 2.43 Read HBR articles: Measure Costs Right: Make the Right Decisions, by Robin Cooper and Robert Kaplan. Time-Driven Activity-Based Costing, by Robert Kaplan and Steven Anderson. Lecture: Introduction to activity-based costing (ABC). Lecture: Discussion of activity-based management (ABM) and how it benefits management. Lecture: Discussion of the limitations of traditional costing systems and the benefits of contemporary costing systems. (4) Cost-Volume-Profit (CVP) Analysis C6 Read HBR article: Vital Truths About Managing Your Costs, by Charles Ames and James Hlavacek. Lecture: Discussion of CVP techniques and how they aid management in short-term decision-making. WEEK THREE Part 2: Managerial Decision Making 3/27 (5) Tactical Decision Making C7 6.31, 6.42 Lecture: Discussion of differential analysis, pricing, and other strategic short-term decision-making techniques. (6) Case and Mid-Term Exam Review Case Write-up Discussion of John Deere Component Works (A).

7 WEEK FOUR 4/03 (7) EXAM held in class C1, 2, 3, 5, , 7.49, 7.51 Part 3: Motivating Managers to Make Good Decisions (8) Budgeting C9 Read HBR articles: What Kind of Management Control Do You Need?, by Richard Vancil. Conflicting Roles in Budgeting for Operations, by Edgar Barrett and LeRoy Fraser. Corporate Budgeting is Broken Let s Fix It, by Michael Jensen. Lecture: Discussion of budgeting and how it assists management. WEEK FIVE 4/10 (9) Variance Analysis C , 9.25, 9.36, 9.38 Lecture: Discussion of variance analysis techniques and how they assist management. (10) Transfer Pricing C11, Read HBR article: Control with Fairness in Transfer Pricing, by Robert Eccles. Lecture: Discussion of transfer pricing techniques and their use to management.

8 WEEK SIX 4/17 (11) Performance Evaluation C11, ; C12, Read HBR articles: Putting the Balanced Scorecard to Work, by Robert Kaplan and David Norton. Using the Balanced Scorecard as a Strategic Management System, by Robert Kaplan and David Norton , 10.29, 10.45, Lecture: Discussion of return on investment (ROI). Lecture: Discussion of economic value added (EVA ). Lecture: Discussion of the balance scorecard (BSC). In-class exercises and discussion of solutions. (12) Case Discussion, Course Wrap-Up and Exam Review Case Write-up Discussion of Chemical Bank: Implementing the Balanced Scorecard case. Course Review. Final Exam Review. WEEK SEVEN 4/24 EXAM held in class: C7, 9, 10, 11, 12 (All topics are tentative and subject to change)