Texas MBA at Houston: Managerial Accounting (Part 2 of ACC 381N)

Transcription

1 Texas MBA at Houston: Managerial Accounting (Part 2 of ACC 381N) Syllabus Spring 2011 Professor David E. Platt, Ph.D. Office CBA Office Phone (512) Fax (512) david.platt@mccombs.utexas.edu

2 Course Information Overview Any organization s long-term competitive success is critically dependent on (1) its ability to appropriately organize and analyze high-quality information about its products, services, processes, organizational units, suppliers, and customers that fits its decision needs, (2) its ability to act rationally on that information, and (3) its ability to control its performance consistent with that information. The term managerial accounting refers to the set of information concepts, models and systems that provide this information and control for managers. In this half-semester course, we will concentrate on two sub-topics of this very broad field: Assigning and analyzing product cost information to support decision making. Controlling organizational performance through design of control systems and analysis of operations. Teaching Materials Classroom Procedures Teaching materials include a mix of case studies, articles, and textbook chapters. The text is Managerial Accounting: Creating Value in a Global Business Environment, 9 th Ed, by Hilton and Platt. To prepare for class, you should read all assigned materials text, cases, and articles. You are expected to think about the cases and prepare to discuss the questions provided (if not included in the case itself, they are provided in this syllabus) and share your insights during class. Note that for many case scenarios there are no clear-cut or "correct" solutions. We also will work some problems in class. For appropriate preparation, see the section on Homework Problems below. Assignments and Evaluation This course is administratively one-half of a full course of record. Your grade in the course will be an equally-weighted combination of your grades in the two halves. Your performance in this half of the course will be determined on the following basis: 1. Examination 150 points The exam will be given during the second half of our last class session. 2. Quizzes (3 quizzes, 1 drop, 25 points each) 50 points Quizzes will be given in classes 2, 3 and 4.

3 Homework Problems The Class Schedule below includes two kinds of homework problems. will introduce new material to help you prepare for class. You will get the most out of class if you read the relevant chapter and attempt these problems before coming to class. are additional problems that can be used to master the material. These problems will not be discussed in class, but solutions will be provided and trying to solve them will be a good way to reinforce your knowledge of the material and to prepare for the Quiz in the next class session (see next section). If you need help with a homework problem, please the TA. If further clarification is needed, feel free to me and we can set up a time to talk. Quizzes Examination Attendance Policy on Scholastic Dishonesty QUIZZES ARE INDIVIDUAL WORK; NO COLLABORATION OF ANY KIND IS PERMITTED. Closed-Book/Closed-Notes. Classes 2, 3, and 4 will begin with a quiz lasting approximately 20 minutes. This quiz will cover (1) the cases and readings assigned for the current class session, and (2) the class content and calculations from the previous class session (not the problems assigned for the current session). One quiz may be dropped. See Attendance below for my policy on missed quizzes. THE EXAMINATION IS INDIVIDUAL WORK; NO COLLABORATION OF ANY KIND IS PERMITTED. The course examination will be given during the last two hours of the class. It will be a combination of calculations and discussions (essays), openbook/open-notes. Use of computer will be allowed with internet disabled, however all significant work must be recorded on the exam. We have only five classes together. You can miss one class with no penalty. If there is a quiz that day, it will have to be your dropped quiz. If you miss a second class, you will receive a 0 for that day s quiz (no makeups or alternate arrangements), probably resulting in a reduction in your final course grade. If you miss three or more classes (i.e. over 50% of our time together!), you cannot pass my half of the course. Missing class on the day of the exam will only be accommodated under very exceptional circumstances. IN THIS CLASS, ALL GRADED WORK IS INDIVIDUAL WORK, MEANING THAT IT CANNOT BE SHARED WITH, OR RECEIVED FROM, ANOTHER CLASS MEMBER OR OTHER OUTSIDE SOURCE. ANYONE BREAKING THIS RULE WILL BE PENALIZED SEVERELY, NO EXCEPTIONS. The McCombs School of Business has no tolerance for acts of scholastic dishonesty. The responsibilities of both students and faculty with regard to the Honor System have been described to you by the Texas MBA staff. These standards are essential not only to the maintenance of the academic integrity of the program but also its brand equity, an important part of its value to all graduates. You must clarify any points of confusion or uncertainty with the professor in advance. For more information on the policy for scholastic dishonesty at the University of Texas at Austin, please visit deanofstudents.utexas.edu/sjs.

4 Class Schedule, Spring 2011 March 4/5 Understanding Cost Behavior Reading Hilton & Platt, Chapter 1 (skim for context) and Chapter 2 Cooper and Kaplan, The Design of Cost Management Systems, 1 st ed., Chapter 3: Assigning the Expenses of Capacity Resources Caribbean Internet Café Bridgeton Industries: Automotive Component & Fabrication Plant None 1-29, 1-31, 2-24, 2-28, 2-29, 2-33, 2-38, 2-39 March 18/19 Decision Analysis Using Contribution Margin Reading Hilton & Platt, Chapter 7 (pp and Appendix) and Chapter 14 (pp and Decisions Involving Limited Resources on pp ) Bill French, Accountant Baldwin Bicycles 7-24, 7-29, 7-33, 14-36, 14-37, , 7-28, 7-31, 7-32, 7-42, 14-33, 14-44, 14-46, March 25/26 Cost Assignment Techniques Reading Hilton & Platt, Chapter 3 and Chapter 5 (skip Appendix) Wilson, Why Does This Pair of Pants Cost $550? (NYT) Barboza, Supply Chain for iphone Highlights Costs in China (NYT) Cooper, You Need a New Cost System When (HBR) Seligram, Inc.: Electronic Testing Operations Siemens Electric Motor Works (A): Process-Oriented Costing 3-27, 3-34, 5-26, , 3-32, 3-43, 3-48, 5-27, 5-28, 5-31, 5-47

5 April 8/9 Budgeting, Control and Transfer Pricing Reading Hilton & Platt, Chapter 9 and Chapter 13 Jensen, Paying People to Lie (read sections 1 and 4, skim rest) (EFM) Simons, Control in an Age of Empowerment (HBR) Codman & Shurtleff Automation Consulting Services 9-22, 9-25, 9-28, 13-24, 13-25, 13-26, , 9-35, 9-40, 13-42, 13-43, 13-48, April 22/23 Balanced Scorecard (Hours 1 and 2) Exam (Hours 3 and 4) Reading Hilton & Platt, Chapter 10 (pp ) Kaplan and Norton, The Balanced Scorecard Measures (HBR) Citibank: Performance Evaluation none none

6 Questions for Case Analysis Caribbean Internet Cafe 1. What are the start-up costs in this case? 2. Which costs are fixed and variable? 3. How can we consider the three different scenarios (optimistic, realistic, and pessimistic) presented by the market research firm? 4. What strategic issues impact the decision about whether or not to start the internet café business? 5. Ultimately (and most importantly), what do you recommend: go or no go? Bridgeton Industries: Automotive Component & Fabrication Plant 1. The overhead allocation rate used in the 1987 model-year strategy study at the ACF was 435% of direct labor cost. Calculate the overhead allocation rate using the 1987 model year budget. Why do you get different numbers? 2. Calculate the overhead allocation rate for each of the model years, 1988 through Are the changes since 1987 in overhead allocation rates significant? Why have they occurred? 3. Consider two products in the same product line: Product 1 Product 2 Expected selling price $ 62 $ 54 Standard material cost Standard labor cost 6 3 Calculate the expected gross margins as a percentage of selling price on each product based on the 1988 and 1989 model year budgets assuming selling price and material and labor cost do not change from standard. 4. Assume that the selling prices, volumes, and material costs for the 1991 model year will not change for fuel tanks and doors produced by the ACF of Bridgeton Industries. Assume also that if manifolds are produced, their selling prices, volume, and material costs will not change either. a) Prepare an estimated model year budget for the ACF in 1991, i) if no additional products are dropped; ii) if the manifold line is dropped. Explain any additional assumptions you make in preparing your estimated model-year budgets. b) What will be the overhead allocation rate under the two scenarios? 5. Would you outsource manifolds from the ACF in 1991? Why or why not? What other information would you want before reaching a final decision? Bill French, Accountant See questions in case. Baldwin Bicycles See questions in case.

7 Seligram, Inc.: Electronic Testing Operations 1. What caused the existing system at ETO to fail? 2. Calculate the reported costs of the five components in Exhibit 6 as computed by a. the existing system; b. the system proposed by the accounting manager; c. the system proposed by the consultant. 3. Which system is preferable? Discuss. 4. Would you recommend any changes to the system you prefer? Why or why not? 5. Would you treat the new machine as a separate cost center or as part of the main test room? Discuss. Siemens Electric Motor Works (A): Process-Oriented Costing. 1. Calculate the cost of the five orders in Exhibit 4 under the traditional and new cost systems. (Hint: Calculate the revised cost of processing an order and handling a special component.) 2. Calculate traditional and revised costs for each order if 1 unit, 10 units, 20 units, or 100 units are ordered. Graph the total product cost (for orders of 1, 10, 20, 100) against volume ordered, and then repeat for product cost per unit. 3. Does the new cost system support the strategy of the firm in ways that the traditional system cannot? And based on his closing quote, is Karl-Heinz Lottes overestimating the value of the new cost system? Discuss. Codman & Shurtleff 1. Prepare a diagram showing the flow of the planning and control processes at C&S, as described in the case. 2. Evaluate the planning and control system in use at J&J. What are its strengths and weaknesses? 3. In surveys J&J is consistently ranked as one of the most innovative and well-managed firms in its industry. What role, if any, do you believe that J&J s management planning and control systems play in achieving (or hindering) this innovation? Automation Consulting Services 1. How should the ACS founders deal with the problems that they have identified? Be as specific as possible in making recommendations for each of the four offices. 2. Relate the problems (and your solutions) of this case to the reading by Simons. Citibank: Performance Evalaution Should James McGaran be given an overall rating of below par, par or above par in light of his branch s performance? Why?