Subject Title Code

FUNDAMENTALS OF MANAGERIAL ACCOUNTING ACC 2093 Note: ACC 2 09 3 = Stands for Accounting = The first number indicates year 2 = The second and the third numbers indicate the subject, that is Fundamentals of Managerial Accounting = The fourth number indicates the credit hours

Status Credit Value Semester & Year Prerequisite Method of teaching Assessment

Core 3 Semester 3, Year 2 None Lecture, discussion, project, active learning Quizzes Test Project / Assignment (2) Final Examination 10% 10% 40% 60% 100%

Lecturer Subjects Objective

Ahmad Hafiz bin Zainal Abidin, BAcc (Hons) UiTM, Dip. Ed. (MPPP) Upon completion of this subject, students should be able to: Discuss the function and role of Managerial Accounting Apply knowledge for the collection and presentation of information to management in term of labour and overhead Define the aspects of budgeting and budgetary control and prepare operating, financial, and flexible budgets Instill a critical approach to control costs via standard costing and variance analysis Apply the concepts of cost behaviour and cots-volume-profit analysis to solve problems and to make common short term decisions Understand the concept and role of responsibility accounting List 1. 2. 3. 4. 5. 6. 7. 8. 9. the features of Managerial Accounting: Identify the nature of Management Accounting Categorize the costs into its classification Manage the inventory levels economically Calculate total wages using method of remuneration and the labor turnover Prepare an overhead analysis sheet systematically and calculate the overhead absorption rate using appropriate basis. Calculate the total production costs for a specified job / product Calculate the break-even point using mathematical and graphical approach Apply the relevant cost concept in order to make four types of short term decision making. Prepare the operating and cash budget; and control the costs by preparing the fixed and flexible budget.

Learning Outcomes

Synopsis

Discussion of the roles, objectives and application of cost management accounting in the context of information system and reports, introduction of materials, labour and overheads, cost volume profit analysis, decision making, budgeting and budgetary control

Week 1-2

Title INTRODUCTION TO MANAGERIAL ACCOUNTING Definition of Management Accounting Comparison between Financial and Management Accounting The Importance of Managerial Accounting Introducction to Cost Terms Concepts: Cost Objects Direct and Indirect Costs Period and Product Cost Cost Behavior Segregation of SemiVariable Cost using highLow Method Cost statement

LOD

References

Hours Lecture Tutorial 3 3

Assess ment

L1 L1 L2 L1 L1 L1

Management and Cost Accounting, Colin Drury

2-3

MATERIAL COSTING AND INVENTORY HANDLING L1 Definition of materials, Work-In Progress and Finished Goods Costing of Materials Classification of Materials Cost of purchases Cost of Carriage/Handling Inventory Handling Importance of Proper Inventory Handling Economic Order Quantity formulae method Re-Order Level Maximum / Minimum Stock Level

Cost Acctg 4th Ed, Prabir Das

L2

45

LABOUR Introduction to Labour Classification of Labour Methods of remuneration: Time basis Overtime Premium Wages Output basis - Straight piecework - Differential piecework - Guaranteed Minimum Payment Incentives Gross Wages

L1 L1 L2

Cost Acctg 4th Ed, Prabir Das

Quiz 1 (5%)

L2 L2 L2

5 7

OVERHEADS Nature and classification of Overheads Allocation and apportionment of Overheads to Cost Centers Reapportionment of Overheads from Service Cost centers to Production Cost Centers Direct Method Overhead Absorption Rate (OHAR) Calculation of Overhead Absorbed

L1 L2 L2

Cost Acctg 4th Ed, Prabir Das

Quiz 2 (5%)

L2 L3 L3

7-8

JOB COSTING Nature of Job Costing Calculation of Job Cost Calculation of Profit on markup and margin Calculation of Quoted Price L1 L1 L2

Cost Acctg 4th Ed, Prabir Das

89

COST VOLUME PROFIT ANALYSIS Concepts of CVP Analysis Assumption and limitation Determination of Break Even Point (BEP): Contribution Approach Graphical Approach (BE Chart and Contribution Chart) Projecting Target Net Profit

L2 L1

Cost Acctg 4th Ed, Prabir Das

Assignm ent 1 (20%)

L3

10- 12

DECISION MAKING The Decision Making Process Introduction of Concepts: Relevant and irrelevant Costs Avoidable and unavoidable cost Opportunity Cost Incremental cost Sunk Cost Short term decision Making Make or buy Special Order Drop or continue Key factor L1 L1 L1 L3

Cost Acctg 4th Ed, Prabir Das

Test (10%)

13 -14

BUDGETING AND BUDGETARY CONTROLPurpose of Budgeting Purpose and objective of Preparation of Budget Cash Budget Operational Budget - Sales , Production, Direct Material Cost, Direct Labor Cost Fixed and Flexible Budget Total Hours

L1 L1 L1 L2

Cost Acctg 4th Ed, Prabir Das

Assignm ent 2 (20%)

L2

24

32

References

Prabir Das and Junainah Hanim Ahmad, Cost Accounting 4th Ed (2007), Oxford Fajar Colin Drury, Management and cost accounting (6th edition), Thomson Learning, London (2004) Lucey, T., (1998), Costing, 7th Ed., London: DPP Hongren, C.T., Introduction to Management Accounting, 14th Ed., London PHI (2007) Garrison, R.H., P.E. Noreen, Managerial Accounting 13th Ed, Irwin McGraw Hill, 1999