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The University of the West Indies

Management accounting—ACCT2017
Semester 2: 2010/2011

Welcome to the Semester 2 session of teaching and learning in Management Accounting—

ACCT2017. I am Ravi Taklalsingh, your Course Coordinator.

As you know, open and constant communication is critical to success in the online learning
environment. I therefore urge you to ensure that you play your part to develop and maintain a
very interactive relationship with your e-tutor.

I can be reached via email at ravi.taklalsingh@dec.uwi.edu.

Thank you for your commitment as your tutors and I work together to make ACCT2017 a
meaningful learning experience.

Ravi Taklalsingh
January 2011

Introduction 2
Course Outline 4
Course Topics 10
Course delivery schedule 12
Grading guide 16
Course Code: ACCT2017
Course Title: Management Accounting
Course Discipline: Management Studies
Credits: 3
Prerequisite/s: ACCT1003
Academic Year: 2010/2011 (Semester 2)
Course Coordinator:Ravi Taklalsingh (ravi.taklalsingh@dec.uwi.edu)


General Information
Some important information to keep in mind:
1. Your picture uploaded on the Learning Exchange must conform to the following – a profile of just
your face, a close up image that allows you to be recognized.
2. The Department in the Open Campus (OC) ultimately responsible for the delivery of this course is:
The Undergraduate Programmes Department. View the OC Web Site for information on your
Programme: http://www.open.uwi.edu/
3. There are different avenues available to you as a student to receive support. The avenue you take is
dependent on your particular need. View the QUICK LINK in your course for Frequently Asked
Questions (FAQs.)

Purpose of this Guide

This Course Guide is invaluable since it contains relevant information, in one document on
ACCT 2017. It is prerequisite reading prior to the commencement of sessions and reference
during the course. Please ensure that you are familiar with its contents. The course delivery
schedule contained in this guide will help you to better manage your time, as working adults, so
that you maximise the time you have available for revision, practice, studying, and completing
Course Coordinator’s Expectations
Management Accounting can be quite challenging for students. It is therefore essential that you
develop adequate time management skills and a methodical, consistent approach to your studies.
Approximately 6 to 8 hours per week application is needed during which you are required to read
and engage with the material, attempt and practice any questions or activities provided,
participate in discussions and complete assignments. I am aware that you have other
commitments in terms of family, work and other courses but please make every effort to keep
pace with the course delivery schedule so that you do not get left behind and need to “catch up”;
having to do this will add to your challenges.

The online educational experience is unique and its potential is achieved through participation in
discussions, projects, case analyses and any other interactive strategies developed for the course,
which will certainly be monitored.

The content of this course is quite practical and applicable to business; it is my expectation that
you will seek opportunities to apply management accounting theory to your work/business
environment in a critical and analytical way.
“At The University of the West Indies all forms of cheating, including plagiarism, are forbidden.
Plagiarism has very serious consequences, such as failing to obtain your qualification or being
stripped of your qualification.” This is a direct extract from the University’s rules regarding
plagiarism, which are found in the Quick Link labelled “Plagiarism” on the left of your course
page in The Learning Exchange. It is your responsibility to become familiar with the contents of
this document.


Conduct in any facet of life is guided by certain rules of etiquette. The Quick Link labelled
“Netiquette” on the left of the course page of The Learning Exchange gives a
comprehensive guide to what is the accepted manner of communication for postings in the
different forums and emails, and posts to anyone in the online community. Always be
guided by the underlying rule of netiquette – if in doubt – do not post it. It is your
responsibility to become familiar with the contents of that document regarding all issues of

Course Description
This course is designed to expose students to management accounting techniques, analysis and
reporting. It reviews, reinforces and expands on the introductory cost and management
accounting course, ACCT1003. It commences with a review of the basics in management
accounting and then gets more detailed in the areas of costing methods, cost-volume- profit
relationships, budgetary planning, variance analysis, relevant costs and decision making. It
ends with quality management in the organisation together with contemporary issues
affecting business. Each unit is comprised of detailed theory, worked examples and
reinforcement questions designed for ease of learning and the increased facility that comes
with practice.

Course Aims
The aim of this course is to facilitate students’ application of management accounting
information for purposes of management decision making.

Course Objectives

At the end of this course, the student should be able to:

1. Distinguish between Financial and Management Accounting

2. Apply the elements of costing to job and process environments
3. Apply cost-volume -profit relationships in business
4. Prepare budgets
5. Analyse variances through standard setting
6. Utilise relevant costs in decision making
7. Calculate and evaluate the measures of quality and apply to the organisation
8. Relate to contemporary issues in business such as transfer pricing and environmental
Course Units
The units to be covered in this course are as follows:
Unit No. Main topics, themes, concepts
Fundamental Concepts:
1  Management Accounting: A Review of the Basics
 Cost Terminologies
 Allocation of Overheads
Job Costing and Process Costing (To be covered over 2 weeks)
2  Job-Order Costing
 Process Costing
Cost-Volume-Profit Relationships
3  Review of the Basic Concepts
 Application of CPV Analysis
 Contribution Margin
Budgetary Planning and Responsibility Accounting
4  Budgets
 Responsibility Accounting
Standard Costing, Variance Analysis and Flexible Budgets
5  Standard Costing
 Variance Analysis
 Flexible Budgeting
Relevant Cost and Decision Making
6  Relevance and the Decision making Process
 Product and Services Pricing Decisions
Achieving Quality in the Organisation
7  Total Quality Management
 Calculating the Costs of Quality
 Financial and Non-Financial Measures of Quality
Transfer Pricing and Environmental Accounting
8  Transfer Pricing
 Environmental Accounting

Course Delivery:
This course will be delivered over 13 weeks using the following strategies:
Online material:
All units will be posted online. Additional material and presentations on content covered in the
units will be made by tutors in the online forum.
Included in this Course Guide is a delivery schedule for guidance on particular topics on which
to focus, but you must also be prepared to independently work through all of your course
With the exception of the course material, there are no specific assigned readings. However
tutors will be posting additional notes, PowerPoint presentations and useful links to solidify the
course content.
There will be 2 teleconferences scheduled for this course, to be moderated by your Course Co-
During the teleconferences the Course Coordinator will address queries on key concepts, course
assessment or any other issues pertaining to the course. These teleconferences are NOT lectures.
Interaction and feedback are encouraged so that burning issues and concerns may be addressed.
Case Studies:
Mini case studies have been included to help you apply the concepts you will encounter in the
Problem Sets/ Tutorial questions:
These will be posted on the course page. They are provided to help reinforce the concepts and
techniques presented; you should therefore use them use them to help you gain confidence in
applying the concepts and techniques presented. You are expected to submit your workings for
feedback from your tutor as directed by the Tutor or Course Coordinator.
Online interaction:
All discussion on the various units is facilitated through the forums on the course page.
Additionally, e-mail and messaging within The Learning Exchange will also be acceptable forms
of communication towards achieving full understanding of the topics. However, you are
encouraged to minimize use of email as the ethos of your learning environment supports sharing
of information and knowledge and community building.
You will be expected to log in regularly to participate in your online groups with your e-tutor and
peers. I want to urge you to actively take part in these discussions as they will enhance your
understanding of the material and its practical applicability as well as contribute to 5% of your
The course will be assessed using a variety of strategies designed to bring the practical aspects of
the course to the forefront. The core assessment structure will be:

Final Exam - 60%

This exam will be comprised of 5 questions out of which you must
attempt 4. Each of these questions will be worth 25% of the final

Coursework - 40%

The coursework will comprise the following:

(1) An online multiple-choice exercise - 5%
A total of 20 questions to be done in 30 minutes.
This multiple choice quiz will be open for 48 hours
and you will have one attempt.

(2) Graded online discussion - 10%

You will be given a discussion topic and your
contributions will be monitored for grading. There
will be no word limit on the discussion. At least
three (3) postings are required; (1) initial response
and (2) commenting on the posting of one or more
of your peers. (See grading criteria on page17.)

(3) Structured short answer questions - 5%

5 short answer questions will be presented. There
will be elements of computation, definition and
limited analysis. You will be required to submit this
assignment online.

(4) Individual Case Analysis - Project 15%

You will be given a topic on which a comprehensive
review will be required and initiative in terms of
research, analysis and presentation is expected.

Participation - 5%
Students will be awarded marks for participation
based on the quality and frequency of their online
postings in the Discussion Forum.
Requirement: Students are required to submit a Coursework Accountability Statement which
must be appended to each assignment uploaded.
Prescribed Text - None.
Essential Readings
Course readings will be outlined as the Units progress. Your course package has been
designed to provide you with ample practice so you can apply what you learn in the
course. To get a better understanding of the topics you should attempt all the activities in
the course material. If you need further practice, you can refer to the following text,
which is available at your distance education site:

Horngren, C., Foster, G., and Datar, S. Cost Accounting: A Managerial Emphasis. New
Jersey: Prentice Hall.

The Internet also has a lot of information available and we have provided a link to some
useful management accounting videos that can be accessed from YouTube. Feel free to
use them and provide your comments.

This includes journal articles, website links or websites, all of which will be posted on the course
page and included in your course material where necessary. The link below points to an online
resource at YouTube which features Susan Crosson, covering several topics pertaining to our
course. These are all delivered in a flip chart lecture style:
 PowerPoint Slides 2010
These will be made available on your course page.
The following calendar dates are relevant:



Semester Begins January 23, 2011

Registration January 10 - 23, 2011

Teaching Begins January 24, 2011

Application to carry forward
February 7, 2011

Application for Leave of Absence

February 11, 2011
Change in Registration
(ADD/DROP) without financial February 11, 2011

Withdrawal February 11, 2011

Application for Credit and

February 11, 2011
Exemptions for Academic Year

Teaching Ends April 21, 2011

Examinations Begin April 27, 2011

Examinations End May 13, 2011

Semester Ends May 13, 2011

WEEK 1: Unit 1 - Fundamental Concepts
o What is management accounting?
o Management accounting and the value chain
o Distinguishing between management accounting and financial accounting
o Cost terminologies
o Overhead allocation
o Activity based costing

WEEKS 2 & 3: Unit 2 - Job Costing and Process Costing

o Overview
o Manufacturing cost flow
o Job order costing
o Non-manufacturing costs
o Job order costing in service organisations
o End of period adjustments
o Cost drivers
o Process costing
o Averaging of costs
o Equivalent units
o Effects of weighted-average and FIFO on work-in-progress

WEEKS 4 & 5: Unit 3 – Cost-Volume-Profit Relationships

o Basic concepts
o Break-even
o Cost-volume-profit graph
o Target income and income tax
o Contribution ratio and C-V-P analysis
o Effects of changes
o Interpreting the data
o C-V-P analysis for multi-product businesses
o Safety margin
o Operating leverage
o C-V-P analysis in service and non-profit organisations

WEEK 6: Unit 4 – Budgetary Planning and Responsibility Accounting

o Budgeting defined
o Purpose of budgets
o The master budget:
o Revenue budget
o Production budget
o Direct materials usage budget
o Direct materials purchases budget
o Direct labour budget
o Manufacturing overhead budget
o Cost of goods sold budget
o Selling and administrative expense budget
o Cash budget
o Responsibility accounting
o Performance reports
o Benefits of responsibility accounting
o Human aspects of budgeting
o Budgeting in multinationals

WEEKS 7 & 8: Unit 5 Standard Costing, Variance Analysis and Flexible Budgets
o Setting standards
o Standard costs
o Variance analysis
o Direct material quantity variance
o Direct labour variance
o Overhead cost variances
o Fixed-overhead variances
o Planning overhead costs

WEEK 9: Unit 6 – Relevant Cost and Decision-Making

o Decision-making process
o Qualitative and quantitative factors
o Cost/revenue types in decision making
o Specific decision making situations
o Major influences in pricing decisions
o Varied approaches to pricing
o Choosing a pricing method

WEEK 10: Unit 7 – Achieving Quality in the Organisation

o Total quality management
o Costs of quality
o Calculating the cost of quality
o Financial and non-financial measures
o The balanced scorecard
o The learning and growth process
o Quality for not-for-profit organisations

WEEK 11: Unit 8 – Contemporary Issues: Transfer Pricing and

Environmental Accounting
o The key principles in transfer pricing
o Guidelines for transfer pricing
o Transfer pricing and multinational corporations
o Environmental accounting – what is it and why is it needed?
o Environmental costs
o Benefits of environmental management accounting

WEEK 13: Review



24/1-30/1 Online Orientation Discussion Forum Discussion # 1
0  Establishing the type of “Post an introduction
climate/environment for of yourself” .
learning Include your
expectations of
 Introduction to each the course.
other Your initial thoughts on
accounting is.
Open for posting

All postings combined

over the
duration of
the course,
contribute to
5% of the

Unit 1: Fundamental Presentation Discussion #2

1 31/1-6/2 Concepts  Define Management Discussion To be assigned by Tutor
Accounting; Open for posting
 Compare management 31/1/11
accounting and financial All postings combined,
accounting; over the
 Explain the functions of duration of
management; the course,
 Distinguish between and contribute to
classify various types of 5% of the
costs incurred by coursework
organizations; mark
 Apply the techniques of
overhead allocation.
Unit 2: Job Costing  Differentiate between job- PowerPoint Discussion #3
2 7/2-13/2 and Process order costing and process- Presentation To be assigned by Tutor
Costing costing systems; Open for posting on
 Explain the use of Discussion 7/2/11
overhead rate in job-order All postings combined,
costing; over the
 Describe the process of duration of
job costing used in service the course,
industry firms and non- contribute to
profit organisations; 5% of the
 Explain the concept of coursework
equivalent units; mark
 Prepare process cost

3 14/2-20/2 Unit 2: Job Costing  Differentiate between job- PowerPoint Discussion #4

and Process order costing and process- Presentation To be assigned by Tutor
Costing costing systems; ( including worksheet Open for posting from
continues  Explain the use of preparation) 14/2/11
overhead rate in job-order All postings combined,
costing; Discussion
contribute to
 Describe the process of 5% of the
job costing used in service coursework
industry firms and non- mark
profit organisations;
 Explain the concept of
equivalent units;
 Prepare process cost
4 21/2-27/2 Unit 3: Cost-Volume-  Describe the nature of PowerPoint Discussion #5
Profit CVP relationships; Presentation To be assigned by
Relationships  Explain the effects of Tutor
income tax on the Discussion Open for posting:
breakeven point; 21/2/11
 Identify how increases All postings combined,
and decreases in cost, over the
revenue and volume affect duration of
income; the course,
 Apply CVP analysis to contribute to
multi-product businesses; 5% of the
 Compare the marginal coursework
costing income statement
with the absorption 1st Graded Activity (5
costing income statement. %):
Multiple-choice quiz
open for
48hrs. only
from 12:10
a.m. 26th to
11:50 pm 27th
Teleconference #1 at
5:30-7:30 pm
(EC) on 21/2/11
5 28/2-6/3 Unit 3: Cost-Volume-  Describe the nature of PowerPoint 2nd Graded Activity
Profit CVP relationships; Presentation (10 %):
Relationships  Explain the effects of Discussion Graded discussion
income tax on the open from
breakeven point; February28th
 Identify how increases to March 13th
and decreases in cost,
revenue and volume affect
 Apply CVP analysis to
multi-product businesses;
 Compare the marginal
costing income statement
with the absorption
costing income statement.
6 7/3-13/3 Unit 4: Budgetary  Define the term budget PowerPoint 4th Graded Activity
Planning and and describe its use in the Presentation (15 %) Case/Project
Responsibility organization; to be uploaded
Accounting  Prepare the various Discussion by 20/3
schedules of a master
budget; Group work
 Explain the concept of
responsibility accounting.
7 14/3-20/3 Unit 5: Standard  Explain how standard PowerPoint Discussion
Costing, costing is used to help Presentation To be assigned by Tutor
Variance control cost; All postings combined,
Analysis and  Compute overhead cost Discussion over the
Flexible variances and describe duration of
Budgets how this information is the course,
used to control costs; contribute to
 Distinguish between static 5% of the
and flexible budgets and coursework
describe how flexible mark
budgets can be used in Case/Project due 20/3
management accounting.
8 21/3-27/3 Unit 5: Standard  Explain how standard PowerPoint 3rd Graded Activity
Costing, costing is used to help Presentation (5 %):
Variance control cost;
Analysis and  Compute overhead cost Discussion
Structured short
Flexible variances and describe answer
Budgets how this information is questions online
used to control costs;
 Distinguish between static Open from March 21-
and flexible budgets and 27
describe how flexible
budgets can be used in
management accounting.
9 28/3-3/4 Unit 6: Relevant Cost  Describe the concept of PowerPoint
and Decision- relevant cost; Presentation Discussion
Making  Analyse various decision- To be assigned by Tutor
making situations and Discussion
All postings combined,
apply the concepts of over the
relevant costs and sunk duration of
costs; the course,
 Describe the role of contribute to
product costs in pricing 5% of the
decisions; coursework
 Identify factors which mark
affect pricing decisions;
 Use various approaches to
set prices in an

10 4/4-10/4 Unit 7: Achieving  Analyse the concept of PowerPoint Discussion Topic # 7

Quality in the quality in profit and non- Presentation To be assigned by Tutor
Organisation profit organizations; Postings begin on 4/4
 Calculate costs of quality Discussion All postings combined,
using financial and non- over the
financial methods; duration of
 Assess non-financial the course,
measures of quality contribute to
including quality in not- 5% of the
for-profit organizations. coursework

11 11/4-17/4 Unit 8: Contemporary  Describe transfer pricing PowerPoint Discussion Topic # 8

Issues: and use various Presentation To be assigned by Tutor
Transfer approaches to determine Postings begin on 11/4
Pricing and transfer prices; Discussion All postings combined,
Environmental  Apply transfer pricing over the
Accounting principles to decision duration of
making situation; the course,
 Explain the concept of contribute to
environmental accounting; 5% of the
 Apply the principles and coursework
practices of environmental mark
cost accounting to
management decision
12 18/4-21/4 Review Discussion Teaching ends April
Teleconference #2 on
18/4/11 at
5:30-7:30 pm

The marks for the graded activities are being developed and will be placed on the course site.


These will be included on the course page.


Forum Discussion
Grading Criteria
0- 1 point 2-3 points 4-5 points

Quality of posting Post includes some Post reflects most Post reflects the
information of the information information and
requested but not and evaluation evaluation required and
focused on the required but relevant information
questions posed. outside source (reading/examples) with
material not cited. proper source
material citation.
Quality of reply Response includes Response is Response is relevant to
some relevant relevant to original original post and
information and is post; demonstrates demonstrates
relevant to the some understanding of the
original post but understanding of topic; supports position
omits aspects of the topic; provides with reference to
observation, some evidence of observation, similarities,
comparison and critical analysis differences and feelings
analysis of feelings. that includes in relation to factual
reference to information
observations and