Course Number: AC325
Course Title: Cost
Accounting

STUDENT LEARNING OUTCOMES

General

This course covers the cost accounting system output relevant to managerial decision-making, planning and control and builds on the foundation already established by the managerial accounting course. The course takes the student beyond determination of cost for financial statement valuation purposes:

1)
The student is expected to develop a deeper understanding of managerial information needs and processes in an organization.
2)
The student will also be able to describe the role of cost accounting in providing planning, controlling, decision-making and
    performance evaluation information needed by the organization.

Specific

Students will be able to:

1. Identify and calculate
    a)
cost accumulation / cost presentation
    b)
absorption / variable costing
    c)
product / period costs
    d)
cost-volume-profit analysis
    e)
contribution margin in units and dollar
    f)
break-even point in unit dollars
    g)
sale, cost of goods sold, gross profit and net income
    h)
profit before and after taxes based on fixed cost
    i)
incremental analysis
    j)
degree of operating leverage

2. Explain the concept of relevance and sunk costs by:
    a)
association with decision
    b)
importance to decision maker
    c)
bearing on the future
    d)
outsourcing, scarce resources, sales mix and product line decisions

3. Describe the Master Budget and prepare the various component budgets.
    a) operating / financial
    b) sales / production
    c) personnel
    d) capital
    e) cash
    f) budgeted financial statements

4. Explain the purpose of capital budgeting and calculate:
    a) cash flow using time-lines and payback period
    b) discounted cash flow using NPV, profitability index, and IRR
    c) the effect of depreciation on after-tax cash flows

5. Identify and describe the various elements of cost control:
    a) cost control systems and cost changes
    b) committed vs. discretionary costs
    c) use of budgets as a cost control tool
         i) activity-based budgeting
         ii) program budgeting
        iii) zero-based budgeting

6. Explain:
    a) the importance if inventory management
    b) the production flow
    c) the use of flexible manufacturing systems and how they relate to computer-integrated manufacturing
    d) the theory of constraints
    e) purchasing costs and carrying costs and how they are computed
    f) push and pull systems of production control work
    g) product life cycles and how they affect product costing and profitability
    h) target costing/just-in-time philosophy and how they affect production

7. Explain the concepts of:
    a) business reengineering and change
    b) competitive force/diversity in the firm
    c) enterprise resources planning and its potential benefits to the firm
    d) open-book management
    e) environmental cost control

8. Explain
    a) the differences among various types of responsibility centers
    b) the allocation of services department costs
    c) transfer pricing and how it is calculated
    d) the advantages and disadvantages of service transfer prices

9. Describe
    a) performance measure and how they are tied to organizational mission and strategies
    b) guidelines or criteria that apply to the design of performance measures
    c) traditional short-term financial performance measure of profit and investment centers
    d) the statement of Cash Flows and its usefulness in performance measurements
    e)
the similarities abd differences of return on investment and residual income
    f)
the use of ROI and how it creates subsidization in investment decision

10. Describe:
    a) the importance of a vision statement to the firm
    b) long-run objectives vis-a-vis short-run objectives
    c) non-financial performance measure
    d) how activity-based costing is used in long-run performance evaluation
    e) performance measurement constraints