COST ACCOUNTING 1

COURSE DESCRIPTION:

The purpose of this course is to introduce you to the concepts and procedures of estimating cost of producing products or rendering services, allocating the costs over units of products and controlling the costs after setting the standards. The course also concentrates on, how the cost accounting information is generated and how that information is to be used under different managerial situations. Cost accounting courses typically cover two primary issues; (1) cost accumulation and determination and (2) cost controlling. We will cover each in this course; however the majority of our time will be spent on accumulation and determination of cost.

PREREQUISITE (IF ANY):

ACN 202 (Management Accounting)

COURSE POLICY:

It is the student’s responsibility to gather information about the assignments and covered topics during the lectures missed. Regular class attendance is mandatory. Points will be taken off for missing classes. Without 70% of attendance, sitting for final exam is NOT allowed. According to IUB system students must enter the classroom within the first 20 minutes to get the attendance submitted.
The date and syllabus of quiz, midterm and final exam is already given here, however, announcements will be given ahead of time. There is NO provision for make-up quizzes.
The reading materials for each class will be given prior to that class so that student may have a cursory look into the materials.
Class participation is vital for better understanding of sociological issues. Students are invited to raise questions.
Students should take tutorials with the instructor during the office hours. Prior appointment is required.
Students must maintain the IUB code of conduct and ethical guidelines offered by the School of Business.
Students must refrain from any type of cheating and/or plagiarism in a course. Any student acting otherwise will receive an “F” grade in the course. School of Business, IUB, maintains a zero tolerance policy regarding violation of academic integrity.

Students are not allowed to keep bags, handouts, books, mobile phones, smart watches or any other smart electronic devices with them during any exam. Students are advised to keep everything in the front of the class room before the exam starts. Please note that, just carrying any smart electronic devises (even if the devise is turned off or put it in silent mode) during the exam will be considered as “cheating”. Moreover, during the exam, anything written on hand palms (or anywhere else) and carrying paper materials (whatever is written) will be considered as “cheating”. Any sorts of “cheating” will result in an “F” grade with no exception. During the exam, students are only allowed to carry pen, pencil, eraser, sharpener, ruler, highlighter and calculator in a clear plastic bag.

ASSESSMENT AND MARKS DISTRIBUTION:

Type of Evaluation	Nos.	Weight
*Class Attendance and Participation*	100%	5
Quiz (Best two will be counted)	5	15
Project and Presentation	01	10
Midterm Exam	01	30
Final Exam	01	40
Total		100%

GRADE CONVERSION SCHEME:

The following chart will be followed for grading. This has customized form the guideline provided by the school of Business.

A	A-	B+	B	B-	C+	C	C-	D+	D	F
90-100	85-89	80-84	75-79	70-74	65-69	60-64	55-59	50-54	45-49	0-44

* Numbers are inclusive

REQUIRED TEXT:

The course will be based mostly on the following books [some other books and journals may be referred time to time]:

Horngren, Dattar and Foster, “Cost Accounting: A Managerial Emphasis,” 15th edition, Prentice-Hill Pearson

Link to virtual learning system: http://103.254.86.4/sb/ (School of Business – Faculty name- Login as a guest- password is 1234).

CLASS AND EXAM SCHEDULE, TOPIC AND READINGS:

Sessions	Topic	Learning Outcomes	Readings
Session -1	Introduction	Introduction to Cost Accounting, Explanation of Course Outline	Course Outline
Session -2	The Manager and Management Accounting	Distinguish financial accounting from management accounting Understand how management accountants help firms make strategic decisions Describe the set of business functions in the value chain and identify the dimensions of performance that customers are expecting of companies	Horngren, Chapter1 Pages 24-39 Handout available on virtual learning system
Session -3	The Manager and Management Accounting	Explain the five-step decision-making process and its role in management accounting Describe three guidelines management accountants follow in supporting managers Understand how management accounting fits into an organization’s structure Understand what professional ethics mean to management accountants	Horngren, Chapter 1 Pages 24-39 Handout available on virtual learning system
Session -4	Cost Terms, Concepts, Purpose, and Behavior	Define and illustrate a cost object Distinguish between direct costs and indirect costs Explain variable costs and fixed costs Interpret unit costs cautiously	Horngren, Chapter 2 Pages 50-87 Handout available on virtual learning system
Session -5	Cost Terms, Concepts, Purpose, and Behavior	Distinguish inventoriable costs period costs Illustrate the flow of inventoriable and period costs Explain why product costs are computed in different ways for different purposes Describe a framework for cost accounting and cost management Relevant Problem Solving from Text	Horngren, Chapter 2 Pages 50-87 Handout available on virtual learning system
Session -6	Cost-Volume-Profit (CVP) Analysis	Explain the features of cost-volume-profit (CVP) analysis Determine the breakeven point and output level needed to achieve a target operating income Understand how income taxes affect CVP analysis Explain how managers use CVP analysis to make decisions Relevant Problem Solving from Text	Horngren, Chapter 3 Pages 88-127 Handout available on virtual learning system
Session-7	Cost-Volume-Profit (CVP) Analysis Quiz 1	Explain how sensitivity analysis helps managers cope with uncertainty Use CVP analysis to plan variable and fixed costs Apply CVP analysis to a company producing multiple products Apply CVP analysis in service and not-for-profit organizations Distinguish contribution margin from gross margin Relevant Problem Solving from Text Knowledge of CVP Analysis	Horngren, Chapter 3 Pages 88-127 Handout available on virtual learning system
Session -8	Job Order Costing	Describe the building-blocks concepts of costing systems Distinguish job costing from process costing Describe the approaches to evaluating and implementing job-costing systems Outline the seven-step approach to normal costing Relevant Problem Solving from Text	Horngren, Chapter 4 Pages 128-171 Handout available on virtual learning system
Session -9	Job Order Costing Quiz 2	Distinguish actual costing from normal costing Track the flow of costs in a job-costing system Dispose of under- or over-allocated manufacturing overhead costs at the end of the fiscal year using alternative methods Understand variations from normal costing Relevant Problem Solving from Text Knowledge of Job Costing	Horngren, Chapter 4 Pages 128-171 Handout available on virtual learning system
Session -10	Activity Based Costing (ABC) and Activity Based Management	Explain how broad averaging undercosts and overcosts products or services Present three guidelines for refining a costing system Distinguish between simple and activity-based costing systems Describe a four-part cost hierarchy Relevant Problem Solving from Text	Horngren, Chapter 5 Pages 172-217 Handout available on virtual learning system
Session -11	Activity Based Costing (ABC) and Activity Based Management Project	Evaluate the costs and benefits of implementing activity-based costing systems Explain how managers use activity-based costing systems in activity-based management Compare activity-based costing systems and department costing systems Relevant Problem Solving from Text Distribution and explanation of Term Case	Horngren, Chapter 5 Pages 172-217 Handout available on virtual learning system Case Handout and Questions
Session -12	Standard Costing and Variance Analysis Issue Quiz 3	Understand static budgets and static-budget variances Examine the concept of a flexible budget and learn how to develop it Calculate flexible-budget variances and sales-volume variances Explain why standard costs are often used in variance analysis Relevant Problem Solving from Text Knowledge of ABC Costing	Horngren, Chapter 7 Pages 270-309 Handout available on virtual learning system
Session -13	Standard Costing and Variance Analysis Issue	Compute price variances and efficiency variances for direct-cost categories. Understand how managers use variances Describe benchmarking and explain its role in cost management Relevant Problem Solving from Text	Horngren, Chapter 7 Pages 270-309 Handout available on virtual learning system
Session -14	Review for Midterm	CHAPTERS 1-5	Horngren, Chapter 1-5
Session -15	Midterm Exam	CHAPTERS 1-5	Horngren, Chapter 1-5
Session -16	Allocation of Support Department Cost	Discuss why a company’s revenues and costs differ across customers Identify the importance of customer-profitability profiles Understand the cost-hierarchy-based operating income statement Relevant Problem Solving from Text	Horngren, Chapter 14 Pages 572-613 Handout available on virtual learning system
Session -17	Allocation of Support Department Cost	Understand criteria to guide cost-allocation decisions Discuss decisions faced when collecting and allocating indirect costs to customers Relevant Problem Solving from Text	Horngren, Chapter 14 Pages 572-613 Handout available on virtual learning system
Session -18	Allocation of Support Department Cost	Subdivide the sales-volume variance into the sales-mix variance and the sales-quantity variance and the sales-quantity variance into the market-share variance and the market-size variance Relevant Problem Solving from Text	Horngren, Chapter 14 Pages 572-613 Handout available on virtual learning system
Session -19	Cost allocation – Joint Products and Byproducts	Identify the split-off point in a joint-cost situation and distinguish joint products from byproducts Explain why joint costs are allocated to individual products Allocate joint costs using four methods Relevant Problem Solving from Text	Horngren, Chapter 16 Pages 654-687 Handout available on virtual learning system
Session -20	Cost allocation – Joint Products and Byproducts	Identify situations where the sales value at split off method is preferred when allocating joint costs Explain why joint costs are irrelevant in a sell-or-process further decision Account for byproducts using two methods Relevant Problem Solving from Text	Horngren, Chapter 16 Pages 654-687 Handout available on virtual learning system
Session -21	Process Costing Quiz 4	Identify the situation in which process-costing systems are appropriate Understand the basic concepts of process-costing and compute average unit costs Describe the five steps in process costing and calculate equivalent units Relevant Problem Solving from Text Knowkedge of Departmental Costing, Cost Allocation Joint Products and BY Products	Horngren, Chapter 17 Pages 686-727 Handout available on virtual learning system
Session -22	Process Costing	Use the weighted-average method and first-in, first-out (FIFO) method of process costing Relevant Problem Solving from Text	Horngren, Chapter 17 Pages 686-727 Handout available on virtual learning system
Session -23	Process Costing	Apply process-costing methods to situations with transferred-in costs Understand the need for hybrid-costing systems such as operation-costing Relevant Problem Solving from Text	Horngren, Chapter 17 Pages 686-727 Handout available on virtual learning system
Session -24	Inventory Management	Identify six categories of costs associated with goods for sale Balance ordering costs with carrying costs using the economic-order-quantity (EOQ) decision model Identify the effect of errors that can arise when using the EOQ decision model and ways to reduce conflicts between the EOQ model and models used for performance evaluation Relevant Problem Solving from Text	Horngren, Chapter 20 Pages 786-823 Handout available on virtual learning system
Session -25	Inventory Management Quiz 5	Describe why companies are using just-in-time (JIT) purchasing Distinguish materials requirements planning (MRP) systems from just-in-time (JIT) systems for manufacturing Identify the features and benefits of a just-in-time production system Relevant Problem Solving from Text Knowledge of Process Costing	Horngren, Chapter 20 Pages 786-823 Handout available on virtual learning system
Session -26	Project Presentation	Case Presentation
Session -27	Project Presentation	Case Presentation
Session -28	Project Presentation	Case Presentation
Session -29	Final Exam	Chapter 7,14,16,17 and 20	Horngren, Chapter 7,14,16,17 and 20
Session 30	Final Exam	Chapter 7,14,16,17 and 20	Horngren, Chapter 7,14,16,17 and 20