TUNKU PUTERI INTAN SAFINAZ SCHOOL OF ACCOUNTANCY

COLLEGE OF BUSINESS
UNIVERSITI UTARA MALAYSIA
FIRST SEMESTER 2018/2019 (A181)

COURSE CODE : BKAM 3023

COURSE : MANAGEMENT ACCOUNTING II
PRE-REQUISITE : BKAM2013 MANAGEMENT
ACCOUNTING I

1.0 SYNOPSIS

This course applies the management accounting techniques in planning,

control, and decision-making. The topics covered include cost-volume profit
analysis, budgeting and budgetary control, standard costing and variance
analysis, and short-term and long-term decision-making analysis.

2.0 COURSE OBJECTIVES

To provide an understanding on how organizations use management

accounting information in planning, control and decision making and to enable
students to apply management accounting techniques in providing information
according to the managerial needs. The emphasis is on the concept of relevant
information and critical thinking in decision making. The course also promotes
teamwork in problem solving.

3.0 LEARNING OUTCOMES

At the end of the course, students should be able to:

1. Apply CVP analysis in decision making.
2. Apply various techniques of budgeting and standard costing for planning
and control purpose using spread sheet.
3. Analyse critically the business performance using appropriate performance
measures within the responsibility accounting framework.
4. Evaluate relevant information for business opportunities and short-term
decision-making.
5. Evaluate various techniques in capital investment decisions.

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 4.0 COURSE CONTENT

NO TOPIC REFERENCE HOURS

1.0 COST-VOLUME PROFIT (CVP) ANALYSIS

1.1 Basic concepts in CVP analysis DR (3)

-Assumptions 5
-Cost behaviour MHH (4)
1.2 Break-even analysis
- Equation method WLP (6)
- Contribution margin method
- CVP Graph GNBCY(4)
1.3 Sensitivity analysis and CVP application
- Cost structure decision
- Target profit
- Sales commission
1.4 Margin of safety
1.5 CVP for a multiple product company

2.0 BUDGET
DR (6,7)
2.1 Budget roles and function 6
2.2 Types and characteristics of traditional and MHH(9,11)
contemporary budget
2.3 Structure and process of creating a Master WLP (8)
Budget
2.4 Flexible budget GNBCY (11)
- Characteristics of a flexible budget
- Preparing a flexible budget
- Activity based budget
2.5 Preparing a performance report

3.0 STANDARD COST AND VARIANCE

ANALYSIS
3.1 Types of standard 6
3.2 Setting standard costs DR (7, 8)
- Direct materials standard
- Direct labor standard MHH (10)
- Variable manufacturing overhead standard
3.3 Advantages and disadvantages of standard WLP (9)
costs
3.4 Variances analysis for materials, labor and GNBCY(12)
overhead
3.5 Advance variance analysis
- Mix and yield variance
- Mix and quantity variance
3.6 Planning and operational variance analysis
3.7 Investigating variance
3.8 Limitations of standard costing

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4.0 PERFORMANCE MEASUREMENT

4.1 Decentralized organizations 8

- Centralization versus decentralization
- Reasons for decentralization DR (22,23)
4.2 Responsibility accounting and responsibility
centres MHH (12)
- Cost centre
- Revenue centre WLP (10)
- Profit centre
- Investment centre GNBCY(13)
4.3 Performance measures
- Return on Investment (ROI)
- Residual Income (RI)
- Economic Value Added (EVA)
4.4 Transfer Pricing
4.4.1 Concept and context of transfer pricing
- Definition of Transfer pricing
- General transfer pricing rule
4.4.2 Types of transfer pricing
- Market-based transfer pricing
- Cost-based transfer pricing
- Negotiated transfer pricing
4.4.3 International transfer pricing

5.0 SHORT TERM DECISION MAKING

5.1 The concept of Relevance DR (11,16) 9

5.2 Information and Decision Process
- Cost information for decision making MHH (13)
5.3 Decisions based on limiting factors
- optimum product mix decision WLP (7)
- theory of constraint
- throughput accounting GNBCY (14)
5.4 Decisions based on relevancy concept
- make or buy
- special order
- keep or drop
- further processing (including joint costs
allocation)
5.5 Qualitative factors in decision making
5.6 Pricing & bidding decisions and strategies

6.0 LONG TERM DECISION MAKING DR (21)

6.1 Risk and uncertainty and sensitivity analysis MHH (14) 8

6.2 Capital investment appraisal techniques
- accounting rate of return WLP (11)
- payback
- discounted payback GNBCY( 15)

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 - net present value
- internal rate of return
- profitability index
6.3 Effect of inflation and taxation
6.4Challenges and issues in capital expenditure
decision

5.0 REFERENCES

Main reference:

Datar, S.M. & Rajan, M.WV. (2018). Hongren’s Cost Accounting: A

Managerial Emphasis, Golbal Edition, 16th Edition.

Other suggested references:

Mowen, M.M., Hensen, D.R. and Heitger, D.L., (2014). Cornerstone of

Managerial Accounting (5th Ed.). Cengage Learning.

Whitecotton, S., Libby, R. and Phillips, F. (2014). Managerial Accounting.

McGraw Hill Education (Asia).

Garrison, R.H., Noreen, E.W. and Brewer, P.C., Cheng, N.S.,and Yuen, K.C.K.
(2012). Managerial Accounting: An Asian Perspective, McGraw Hill
Education (Asia).

Horngren, C.T, Datar, S.M., and Rajan, M.V. (2012). Cost Accounting: A
Managerial Emphasis (14th Ed.) Pearson Education International.

(Note: Students are advised to refer to books other than those listed above and to read related
journals in order to be well informed on the latest development in the area of management
accounting)

6. 0 TEACHING METHODS

This course is conducted for fourteen (14) weeks, comprising three (3) hours
of lecture and one (1) hour of tutorial class per week. During this period,
tutorial assignments and discussion will be held on a continuous basis.
Materials for lectures, cases, announcements, assignments, and exercises are
available on the online learning website or lecturer’s personal website.

Students are expected to be prepared with materials that are going to be

discussed in lectures and tutorials. Students are encouraged to actively
participate during discussions.

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7.0 ASSESSMENT

Coursework 40%

Final examination 60%

100%

8.0 ATTENDANCE

Students are required to fulfill at least 80% of class attendance in order to sit
for the mid and final examination as governed by the Universiti Utara
Malaysia regulations. Students who do not meet the above requirements for
whatsoever reasons will be barred from taking the final examination. The 20%
absenteeism from lectures will include all excuses including medical
certificate (MC), death, and others.

9.0 ACADEMIC DISHONESTY

Students are reminded that academic dishonesty is the most serious academic
offence. Examples of academic dishonesty are cheating and plagiarism,
bringing in notes during examination, and taking the examination on behalf of
another student. Once the student is convicted of the above offence, the
examination result will be withheld and annulled and/or other serious penalties
may be taken against the student.