ACT305: Principles of Managerial accounting Credit Hours: 3

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1 ACT305: Principles of Managerial accounting Credit Hours: 3 Contact Hours: This is a 3-credit course, offered in accelerated format. This means that 16 weeks of material is covered in 8 weeks. The exact number of hours per week that you can expect to spend on each course will vary based upon the weekly coursework, as well as your study style and preferences. You should plan to spend hours per week in each course reading material, interacting on the discussion boards, writing papers, completing projects, and doing research. Faculty Information Name: Phone: CSU-GC Virtual Office Hours: Course Description and Outcomes This course provides a thorough understanding of basic accounting principles for managerial purposes. Topics covered include managerial uses of accounting information, including product costing, decision making, differential accounting and responsibility accounting. This is a basic course that aids in building a foundation for financial analysis and decision-making. Course Learning Outcomes: 1. Identify and explain the role of managerial accounting in an organization. 2. Identify the different costs and prepare a schedule of cost of goods manufactured. 3. Compute predetermined overhead rates and apply overhead based on this rate. 4. Identify the flow of costs in a job-order costing system and prepare the appropriate journal entries to record costs. Include the calculation and disposal of over or under-applied overhead. 5. Record the flow of materials, labor, and overhead through a process costing system. 6. Assign costs to ending inventory and inventory transferred out using the weighted average method. 7. Describe and explain the behavior of fixed and variable costs behave and use them to predict costs. 8. Calculate the contribution margin and use that to calculate the break-even point and desired level of sales needed to achieve a desired target profit. 9. Explain how variable costing differs from absorption costing and compute unit product costs under each method. 10. Prepare income statements using both variable and absorption costing. 11. Evaluate why organizations budget and explain the processes they use to create budgets.

2 12. Prepare several key budgets including the sales, production, direct materials, direct labor, manufacturing overhead and cash budgets as well as budgeted financial statements. 13. Compute several variances including the direct materials price and quantity variances, direct labor rate and efficiency variances and variable manufacturing overhead rate and efficiency variances and explain their significance. 14. Compute return on investment (ROI) and show how changes affect this as well as residual income and its strengths and weaknesses. 15. Prepare an analysis showing whether we should drop or retain a product line, make or buy an item and whether a special order should be accepted. 16. Evaluate the acceptability of an investment project using the net present value method and internal rate of return method. Also, use the payback period for an investment and the simple rate of return for an investment. Participation & Attendance Prompt and consistent attendance in your online courses is essential for your success at CSU-Global Campus. Failure to verify your attendance within the first 7 days of this course may result in your withdrawal. If for some reason you would like to drop a course, please contact your advisor. Online classes have deadlines, assignments, and participation requirements just like on-campus classes. Budget your time carefully and keep an open line of communication with your instructor. If you are having technical problems, problems with your assignments, or other problems that are impeding your progress, let your instructor know as soon as possible. Course Materials Required: Garrison, H., Noreen, E., & Brewer, P. (2012). Managerial accounting (14th ed.). New York, NY: McGraw-Hill. ISBN **All non-textbook required readings and materials necessary to complete assignments, discussions, and/or supplemental or required exercises will be provided within the course itself. Please read through each course module carefully. Course Schedule Due Dates The Academic Week at CSU-Global begins on Monday and ends the following Sunday. Discussion Boards: The original post must be completed by Thursday at 12 midnight MT and Peer Responses posted by Sunday 12 midnight MT. Late posts may not be awarded points. Mastery Exercises: Students may access and retake mastery exercises through the last day of class until they achieve the scores they desire. Critical Thinking Activities: Assignments are due Sunday at 12 midnight MT.

3 Week # Readings Assignments Chapters 1 & 2 in Managerial accounting Discussion Board (25) Mastery Exercises (10) Chapter 3 in Managerial accounting Discussion Board (25) Mastery Exercises (10) Chapter 4 in Managerial accounting Discussion Board (25) Mastery Exercises (10) Chapter 5 in Managerial accounting Discussion Board (25) Mastery Exercises (20) Chapter 6 in Managerial accounting Discussion Board (25) Mastery Exercises (10) Chapter 9 in Managerial accounting Discussion Board (25) Mastery Exercises (10) Chapters 10 & 11 in Managerial accounting Discussion Board (25) Mastery Exercises (10) Chapter 13 in Managerial accounting Discussion Board (25) Mastery Exercises (20) Portfolio Assignment (350) Assignment Details This course includes the following assignments/projects: Week 1 Critical Thinking: Cost of Goods Manufactured Statement (50 points) Denny Corporation, a manufacturing company, produces a single product. The following information has been taken from the company s production, sales, and cost records for the year just completed: Production in units 51,000 Direct labor $120,325 Raw materials purchased $325,019 Manufacturing overhead $250,265 Selling and administrative expenses $422,100

4 Raw Materials, Beginning $62,900 Raw Materials, Ending $45,345 Work in Process, Beginning $52,984 Work in Process, Ending $58,777 Prepare the cost of goods manufactured statement. Provide your answers in an Excel spreadsheet, clearly organized. Check spelling and formatting for readability. All responses must comply with CSU-Global APA guidelines. Be sure to review the Module 1 Critical Thinking grading rubric, which may be accessed through the Course Information page. Week 2 Critical Thinking: Job Costing Problem (50 points) Hoover Inc. uses a job-order coding system. The company s inventory balances on February 1, the start of its fiscal year, were as follows: Raw Materials Inventory $69,325 Work in Process Inventory $55,100 Finished Goods Inventory $81,256 During the year, the following transactions were completed: a. Raw materials were purchased on account, $215,221. b. Raw materials were issued from the storeroom for use in production, $198,000 (70% direct and 30% indirect). c. Employee salaries and wages were accrued as follows: direct labor, $243,300; indirect labor, $98,750; and selling and administrative salaries, $72,340. d. Utility costs were incurred in the factory, $79,233. e. Advertising costs were incurred. $110,600. f. Prepaid insurance expired during the year, $35,000 (80% related to factory operations, and 20% related to selling and administrative activities). g. Depreciation was recorded, $192,100 (75% related to factory assets, and 25% related to selling and administrative assets). h. Manufacturing overhead was applied to jobs at the rate of 160% of direct labor cost. i. Goods that cost $720,200 to manufacture according to their job cost sheets were transferred to the finished goods warehouse. j. Sales for the year totaled $1,293,300 and were all on account. The total cost to manufacture these goods according to their job cost sheets was $725,825. Submit your assignment as an Excel spreadsheet with each tab labeled by item number. Demonstrate the following: 1. Prepare the journal entries to record the transactions for the year. 2. Prepare the T-accounts for raw materials inventory, work in process inventory, finished goods inventory, manufacturing overhead, and cost of goods sold. Don t forget to enter the beginning balances in the inventory accounts. 3. Is manufacturing overhead underapplied or overapplied for the year? Prepare a journal entry to close this balance to cost of goods sold.

5 Provide your answers in an Excel spreadsheet, clearly organized. Check spelling and formatting for readability. Where applicable, written comments must be in correct CSU-GC APA formatting. Be sure to review the Module 2 Critical Thinking grading rubric, which may be accessed through the Course Information page. Week 3 Critical Thinking: Production Cost Accounting (50 points) Maple, Inc. manufactures syrup that goes through three processing stages prior to completion. Information on work in the first department, blending, is given below for August: Production data: Pounds in process, August 1; materials 100% complete; conversion 70% complete 3,000 Pounds started into production during August 85,000 Pounds completed and transferred out? Pounds in process, August 31; materials 80% complete; conversion 30% complete 6,000 Cost data: Work in process inventory, August 1: Materials cost $900 Conversion cost $5,900 Cost added during May: Materials cost $151,000 Conversion cost $161,700 The company uses the weighted-average method. Submit an Excel document which each tab labeled by item number that demonstrates the following: 1. Compute the equivalent units of production. 2. Compute the costs per equivalent unit for the month. 3. Determine the cost of ending work in process inventory and of the units transferred out to the next department. 4. Prepare a cost reconciliation schedule for the month. Provide your answers in an Excel spreadsheet, clearly organized. Check spelling and formatting for readability. Where applicable, written comments must be in correct CSU-GC APA formatting. Be sure to review the Module 3 Critical Thinking grading rubric, which may be accessed through the Course Information page. Week 4 Critical Thinking: Cost of Operation Exercise (50 points) Stock (50 points)

6 Toy Box Inc. is contemplating expanding sales of their children s toys. The have an opportunity to stock and sell the X toy that has been a big hit with children everywhere. They need to order the X toys from the manufacturer in a minimum order of 100 at a cost of $12 each. They could resell the X toy in their store for $22 each. Due to anticipated demand, Toy Box Inc. will need to hire an additional part-time cashier at $600 a month which will be classified as a fixed-cost attributable to the X toy. Also, they have offered a $1 sales commission per toy to their floor sales representative. They will also include a package of trading cards with every purchase of an X toy, which will cost them an additional $2 each. Required: 1. To make the project worthwhile, Toy Box Inc. would require a $5,000 profit per month. What level of sales, in units and in dollars, would be required to reach this target profit? Show all computations completely, in a table inserted into your document. 2. Assume that the venture is undertaken and an order is placed for 100 X toys. What would be Toy Box s breakeven point in units and in sales dollars? Show computations completely in an inserted table, and explain the reasoning behind your answer. You can ignore the fixed cost of $600 for this part. Your paper must be in a Word document, showing all calculations in a table inserted in the document. Written remarks will be in CSU-Global APA-format. Be sure to review the Module 4 Critical Thinking grading rubric, which may be accessed through the Course Information page. Week 5 Critical Thinking: Cost of Production (50 points) Paint More LLC has organized a new division to manufacture and sell specialty paint. The division s monthly costs are shown below: Manufacturing costs: Variable costs per unit: Direct materials $12 Variable manufacturing overhead $1 Fixed manufacturing overhead costs (total) $100,000 Selling and administrative costs: Variable 7% of sales Fixed (total) $31,000 Because the production is highly automated, the company includes its labor costs in its fixed manufacturing overhead. The gallons of paint sell for $68 each. During September, the first month of operations, the following activity was recorded: Units produced 5,000 Units sold 4,000 Submit an Excel document which each tab labeled by item number that demonstrates the following:

7 1. Compute the unit product cost under: a. Absorption costing b. Variable costing 2. Prepare an absorption costing income statement for September 3. Prepare a contribution format income statement for September using variable costing Provide your answers in an Excel spreadsheet, clearly organized. Check spelling and formatting for readability. Where applicable, written comments must be in correct CSU-GC APA formatting. Be sure to review the Module 5 Critical Thinking grading rubric, which may be accessed through the Course Information page. Week 6 Critical Thinking: Cost of Production (50 points) Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter: a. As of December 31, (the end of the prior quarter), the company s general ledger showed the following account balances: Cash $48,000 (debit) Accounts receivable $224,000 (debit) Inventory $60,000 (debit) Buildings and equipment, net $370,000 (debit) Accounts payable $93,000 (credit) Capital stock $500,000 (credit) Retained earnings $109,000 (credit) b. Actual sales for December and budgeted sales for the next four months are as follows: December $280,000, January $400,000, February $600,000, March $300,000 and April $200,000. c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. d. The company s gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.) e. Monthly expenses are budgeted as follows: salaries and wages, $27,000 per month; advertising, $70,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $42,000 per quarter. f. Each month s ending inventory should equal 25% of the following month s cost of goods sold. g. One half of the month s inventory purchases is paid for in the month of purchase; the other half is paid in the following month. h. During February, the company will purchase a new copy machine for $1,700 cash. During March, other equipment will be purchased for cash at a cost of $84,500. i. During January, the company will declare and pay $45,000 in cash dividends. j. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. Required: Using the data above, complete the following statements and schedules for the first quarter. Submit your responses in an Excel spreadsheet: 1. Schedule of expected cash collections Schedule of Expected Cash Collections

8 January February March Quarter Cash sales $80,000 Credit sales $224,000 Total Collections $304, Merchandise purchases budget Merchandise Purchases Budget Budgeted Cost of Goods Sold $240,000* $360,000 Add desired ending inventory $90,000** Total needs $330,000 Less beginning inventory $60,000 Required purchases $270,000 *$400,000 sales x 60% cost ratio = $240,000 ** $360,000 x 25% = $90,000 January February March Quarter 3. Schedule of expected cash disbursements-merchandise purchases Schedule of Expected Cash Disbursements-Merchandise Purchases January February March Quarter December purchases $93,000 $93,000 January purchases $135,000 $135,000 $270,000 February purchases March purchases Total disbursements $228, Schedule of expected cash disbursements-selling and administrative expenses Schedule of Expected Cash Disbursements-Selling and Administrative Expenses January February March Quarter Salaries and wages $27,000 Advertising $70,000 Shipping $20,000 Other expenses $12,000 Total disbursements $129, Cash budget: Cash Budget January February March Quarter

9 Cash balance, beginning $48,000 Add cash collections $304,000 Total cash available $352,000 Less cash disbursements For inventory $228,000 For selling and admin expenses $129,000 For purchase of equipment For cash dividends $45,000 Total cash disbursements $402,000 Excess (deficiency) of cash ($50,000) Financing needed Cash balance, ending Provide your answers in an Excel spreadsheet, clearly organized. Check spelling and formatting for readability. Be sure to review the Module 6 Critical Thinking grading rubric, which may be accessed through the Course Information page. Week 7 Critical Thinking: Castle Company (50 points) Castle Company produces throw blankets that are popular holiday gifts. Standard variable costs relating to a single blanket are given below Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.62 yards $5 per yard $? Direct labor 1.35 DLH $6.80 per DLH $? Variable manufacturing overhead 1.35 DLH $2 per direct labor-hour $? Total standard cost $? Overhead is applied to production on the basis of direct labor hours. During March, 924 blankets were manufactured and sold. Selected information related to the month s production is given below: Materials Used Direct Labor Variable Manufacturing Overhead Actual costs incurred $11,500 $8,408 $3,100 Direct materials price variance? Actual 2,620 yards 1400 hours

10 Direct materials quantity variance $1,000 U Direct labor rate variance? Direct labor efficiency variance? Variable overhead rate variance? Variable overhead efficiency variance? *For this month s production of 924 blankets Submit an Excel document with each tab labeled by item number in good form that demonstrates the following through your calculations: 1. What is the standard cost of a single blanket? 2. What was the actual cost per blanket produced during March? 3. What was the direct materials price variance for March? 4. What was the direct labor rate variance for March? The direct labor efficiency variance? 5. What was the variable overhead rate variance for March? The variable overhead efficiency variance? Provide your answers in an Excel spreadsheet, clearly organized. Check spelling and formatting for readability. Where applicable, written comments must be in correct CSU-GC APA formatting. Be sure to review the Module 7 Critical Thinking grading rubric, which may be accessed through the Course Information page. Week 8 Portfolio Assignment (350 points) Choose an item that you would like to manufacture. You do not actually need to manufacture something, but will proceed through the assignment as if you were planning on manufacturing the item you have selected. The product should require materials and labor and be something that you are familiar with in process from start to finish. The product must be useful and marketable. You can choose something as simple as making chocolate chip cookies, a type of craft, or something more complicated. Consider production as if you were making the product from beginning to end, and not as if using a kit. Perform the following steps: 1. Choose a product to manufacture and describe the manufacturing process. 2. Prepare the following budgets for 1 quarter broken down monthly regarding your chosen item: estimated sales budget estimated direct materials budget estimated direct labors budget estimated manufacturing overhead budget estimated selling and administrative expenses estimated income statement. 3. Classify all manufacturing costs and selling and administrative expenses as either variable or fixed. 4. Prepare a contribution margin income statement separating all variable and fixed costs into their own categories. 5. Determine the breakeven point in units and dollars. Also, determine the number of units and dollars that need to be sold to make a target profit of $5,000 a month. 6. Identify what types of trends you should be aware of in the industry and who the primary competitors are. 7. Answer the following question: If you had to improve the bottom line, what would you do and what concerns would you have going forward.

11 8. Choose a piece of equipment that you might consider purchasing to increase production of your item and address the following questions: What types of capital budgeting factors would you look at when deciding whether to do this? What would be the relevant costs that you would consider in this decision? Your final project should be in the form of a paper using Microsoft Word that addresses each of these different areas. Steps #1, 6, 7 and 8 will be in paragraph form and Steps #2, 3, 4 and 5 will involve numerical calculations that should be put into the form of a table in proper format and included as part of the paper. You should show any calculations in a table within Word. Your paper should be 3-6 double-spaced pages (body of the paper) and follow CSU-Global APA formatting. You should also cite at minimum three references other than the course textbook. Include a reference page. For project details, see the Portfolio Project Description, which can be accessed from the Week 8 Assignments page. Be sure to review the Portfolio Project grading rubric, which may be accessed through the Course Information page. Course Policies Course Grading Grading Scale and Policies 20% Discussion Participation 10% Mastery Exercises 35% Critical Thinking Activities 35% Final Portfolio Paper A A B B B C C D F 59.9 or below In-Classroom Policies For information on late work and Incomplete grade policies, please refer to our In-Classroom Student Policies and Guidelines or the Academic Catalog for comprehensive documentation of CSU-Global institutional policies. Academic Integrity Students must assume responsibility for maintaining honesty in all work submitted for credit and in any other work designated by the instructor of the course. Academic dishonesty includes cheating, fabrication, facilitating

12 academic dishonesty, plagiarism, reusing /re-purposing your own work (see CSU-Global Guide to Writing and APA Requirements for percentage of repurposed work that can be used in an assignment), unauthorized possession of academic materials, and unauthorized collaboration. The CSU-Global Library provides information on how students can avoid plagiarism by understanding what it is and how to use the Library and Internet resources. Citing Sources with APA Style All students are expected to follow the CSU-Global Guide to Writing and APA Requirements when citing in APA (based on the APA Style Manual, 6th edition) for all assignments. For details on CSU-Global APA style, please review the APA resources within the CSU-Global Library under the APA Guide & Resources link. A link to this document should also be provided within most assignment descriptions on your course s Assignments page. Netiquette Respect the diversity of opinions among the instructor and classmates and engage with them in a courteous, respectful, and professional manner. All posts and classroom communication must be conducted in accordance with the student code of conduct. Think before you push the Send button. Did you say just what you meant? How will the person on the other end read the words? Maintain an environment free of harassment, stalking, threats, abuse, insults or humiliation toward the instructor and classmates. This includes, but is not limited to, demeaning written or oral comments of an ethnic, religious, age, disability, sexist (or sexual orientation), or racist nature; and the unwanted sexual advances or intimidations by , or on discussion boards and other postings within or connected to the online classroom. If you have concerns about something that has been said, please let your instructor know.