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ACCOUNTING 6347 COST ACCOUNTING THEORY AND PRACTICE Spring 2008 Professor : Prof. Zhanel Mailibayeva 126 Barry Kaye Hall [email protected] (561) 297-1463 Class meeting times : W 7:10-10:00pm, BU 307 Office hours : TW 5:00-6:00 pm in my office And by appointment Course Materials : Required : Charles Horngren, Srikant Datar and George Foster Cost Accounting: A Managerial emphasis, 12 th Edition, Prentice Hall Course Website : http://bb.fau.edu This course is supported by Blackboard. It is important that you have access to it as I will post announcements, homework problems solutions and other material on the website. Warning : You will not be given any credit for this course if you had taken Cost Accounting course as an undergraduate student! Please check with your Academic Advisor if you are eligible to take this course. Course Description This is a foundation graduate course of theory and practical applications of cost accounting. In the past, cost accounting was limited to computing the manufacturing cost of the products a company produced. A firm needed to know the cost of its products to value its inventories and determine its cost of goods sold for financial reporting. With time the focus shifted from computing the cost of products to using the cost information to improve the firm's performance. Techniques and theories were developed to aid managers make better decisions, improve planning procedures, and evaluate and reward employees' performances. The recent increase in global competition has made firms aware that their product cost information may be crude and not very reliable. Thus the focus has shifted to more accurately determining the manufacturing costs of a firm’s products. In this course we will look at multiple facets of managerial/cost accounting. First, we will study traditional and innovative product costing procedures. Second, we will examine some of the standard techniques and theories for using costing information in the decision making. And finally, we will learn tools for planning, control and performance evaluation processes.

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ACCOUNTING 6347

COST ACCOUNTING THEORY AND PRACTICE

Spring 2008

Professor: Prof. Zhanel Mailibayeva

126 Barry Kaye Hall [email protected] (561) 297-1463

Class meeting times: W 7:10-10:00pm, BU 307

Office hours: TW 5:00-6:00 pm in my office And by appointment

Course Materials: Required: Charles Horngren, Srikant Datar and George Foster Cost Accounting: A Managerial emphasis, 12th Edition, Prentice Hall

Course Website: http://bb.fau.edu

This course is supported by Blackboard. It is important that you have access to it as I will post announcements, homework problems solutions and other material on the website.

Warning: You will not be given any credit for this course if you had taken Cost Accounting course as an undergraduate student! Please check with your Academic Advisor if you are eligible to take this course.

Course Description

This is a foundation graduate course of theory and practical applications of cost accounting. In the past, cost accounting was limited to computing the manufacturing cost of the products a company produced. A firm needed to know the cost of its products to value its inventories and determine its cost of goods sold for financial reporting. With time the focus shifted from computing the cost of products to using the cost information to improve the firm's performance. Techniques and theories were developed to aid managers make better decisions, improve planning procedures, and evaluate and reward employees' performances. The recent increase in global competition has made firms aware that their product cost information may be crude and not very reliable. Thus the focus has shifted to more accurately determining the manufacturing costs of a firm’s products. In this course we will look at multiple facets of managerial/cost accounting. First, we will study traditional and innovative product costing procedures. Second, we will examine some of the standard techniques and theories for using costing information in the decision making. And finally, we will learn tools for planning, control and performance evaluation processes.

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Grading:

Points in ACG 6347 will be awarded as follows:

5 Quizzes @ 15 points each (drop the lowest score) 60

11 Homework problems @ 5 points each (drop the lowest scores) 50

Required Comprehensive Problems 20

Class Participation 40

Midterm Examination 100

Final Examination 150

TOTAL POINTS 420

There will be no extra credit assignments. The total number of points required to receive an A, B, etc. is different each semester and is not determined until after the final exam. As a guideline—but not a firm rule—the cutoffs for grades are as follows:

Grade Letter A A- B+ B B- C+ C C-

Percentage of total points 94% 89% 84% 79% 74% 69% 64% 60%

Points earned in the course will be regularly posted on the web site for each student. If there is an error in the information posted, it is important to report the problem to me promptly. The last date to report errors in the scores listed on the web is the last day of classes, Friday, April 25.

Quizzes (60 points, 15 points each quiz)

Approximately once every three weeks a quiz will be given in class. Quizzes may or may not be announced. No make-ups are given for quizzes missed by a student under any circumstances. A total of 5 quizzes will be given; the lowest score will be dropped.

Homework Problems (50 points, 5 points each homework)

Almost every class, one problem out of the homework assigned will be collected and graded. Which problem will be collected and graded will not be announced. A total of 11 homework problem(s) will be collected; the lowest score will be dropped.

If a student must miss a class for a legitimate reason (e.g. family emergency, military obligations, university-approved event), he/she can submit his/her entire homework assignment prior to the date of

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his/her absence along with written documentation indicating the reason for the absence. Homework will not be accepted if it is submitted after the absence has occurred.

If a student is ill, he/she may submit his/her entire homework late if it is accompanied by written documentation of the illness from a health official. Since the answers to the regularly assigned homework problems will have been posted on the web, I reserve the right to assign alternative problems.

Required “Comprehensive Problems” (20 points)

A comprehensive set of problems covering the final topics in the course will be assigned at the end of the course.

Participation Policy (40 points)

The purpose of class participation is to help the instructor make sure the students are learning the course material. In order to encourage students to actively participate in the class, students are given points based on their level of preparedness and contribution to the class. Participation points can be earned by:

1) Demonstrating that one is prepared for class. Being prepared means, among other things, that you have read all assigned materials and have completed all assigned homework problems. Evidence that you have not done these things will result in loss of points.

2) Class performance. Volunteering good answers and comments to my questions; the answer need not be correct, but should be thoughtful. Note that it is quality, and not quantity, of responses that will be considered.

Midterm and Final Examinations (250 points)

The midterm and final examinations will contain multiple-choice problems, work out problems and written essays. Final examination will be comprehensive. If a student is unable to attend an examination due to a legitimate reason (e.g., a concurrent examination, or as outlined in the homework submission guidelines above), the student should notify me one week prior to the final exam to schedule a make-up exam.

Academic Honesty

All students are required to adhere to the School of Accounting Course Policies including an academic honesty policy: http://soa.fau.edu/policies.html. Failure to follow these regulations may lead to receiving grade F in the course.

Disabilities

In compliance with the Americans with Disabilities Act (ADA), students who require special accommodations due to a disability to properly execute coursework must register with the Office for Students with Disabilities (OSD) and follow all OSD Procedures.

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SCHEDULE OF ASSIGNMENTS

DATE TOPIC READING PROBLEMS Chapter 1 - Introduction to managerial accounting and Chapter 2 – Basic cost terms and concepts

Wed., Jan. 9 Introduction to the class.

Cost definitions and classifications.

Chapter 1, Skim pp. 2-18 Chapter 2, Read pp. 27-45

None

Chapter 4 and Appendix - Job order costing systems Wed., Jan. 16 Basics of allocating costs.

Actual and normal costing. Chapter 4

2-28, 2-33, 2-39

Chapter 5 – ABC costing and ABC management Wed., Jan. 23 ABC costing. Chapter 5

4-19, 4-21, 4-24, 4-27

Chapter 17 - Process costing Wed., Jan. 30 Equivalent units - Weighted average method

of process costing Chapter 17 Read pp. 595-609, 612-617

5-19, 5-25, 5-35, 5-37

Wed., Feb. 6 More on process costing.

Catch-up and review for exam. Review Chapters 1, 2, 4, 5 and 17

“Process Costing Problems” (to be Distributed)

Wed., Feb. 13

Midterm Examination (regular class time and location)

Chapters 1, 2, 4, 5 and 17

Chapter 9 – Inventory costing Wed., Feb. 20 Variable income versus absorption income.

Manipulating income with absorption costing. Chapter 9 (part I) Read pp. 294-308

9-16, 9-21

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DATE TOPIC READING PROBLEMS

Chapter 3 and Appendix – Cost-volume-profit (CVP) analysis Wed., Feb. 27 CVP, break-even analysis. Multiple products. Chapter 3 and

Appendix 3-17, 3-21, 3-24, 3-35

Fri., Feb. 29 LAST DAY FOR STUDENT WHO IS FAILING THE COURSE TO DROP THE

COURSE WITHOUT GETTING “F” Mon., Mar. 3 – Sun., Mar. 9 - MID-SEMESTER BREAK. Chapter 11 – Decision making about production Wed., Mar. 12 General approach to decision making,

Decision making with scarce resources, joint products.

Chapter 11 and Appendix Chapter 16 (skim)

11-21,11-23, 11-29

Chapter 21 – Capital budgeting and cost analysis Wed., Mar. 19 NPV problems and the internal rate of return.

Accounting rate of return and payback. Chapter 21 Read pp. 724-734

11-37(1, 6-7), 12-17, 12-27

Chapter 6 - Master Budget and responsibility accounting Wed., Mar. 26 Overview of budgets.

Master budgets Chapter 6 and Appendix

21-19, 21-23, 6-17, 6-19

Chapter 7 - Flexible Budgets, Direct-cost variances Chapter 8 - Flexible Budgets, Overhead cost variances

Wed., Apr. 2 Standard costing. Flexible budgets.

Variance analysis Chapters 7 and 8

6-30, 6-35

Chapters 7, 8 and 14- Total Variance Analysis Wed., Apr. 9 Sales Variances.

Total Variance Analysis Chapter 14 Read pp. 508-519

7-17,7-21, 8-20

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Wed., Apr. 16 Catch-up and review for exam. None Work on comprehensive problems

DATE TOPIC READING PROBLEMS

Review Wed., Apr. 23 No class. Self-study for exam. All Chapters Comprehensive

Problems due (worth 20 points)

Friday, Apr. 25 LAST DAY TO REPORT ERRORS IN POINTS EARNED IN COURSE AS

RECORDED ON THE WEB SITE Fri., Apr. 25 – Thu., May 1 - FINAL EXAM WEEK