Faculty
Professor Richard C. Sansing
Objectives
This course provides a comprehensive, graduate level exploration of managerial accounting. The course focuses on the use of accounting data in the management of an organization. Naturally, what accounting data are interesting and how they might be used depend on what the manager is seeking to accomplish and what other information is available.
Requirements
Class preparation
The syllabus provides a set of readings from the textbook, assigned problems, and case discussion questions. The assigned problems illustrate the managerial accounting principles being covered each week; the cases illustrate how these principles are used when addressing a management problem. I expect each student to be prepared to answer each assigned problem and case question. Furthermore, I expect each student to be prepared to present a solution to the class, either using the document camera (which requires a written document) or the computer. If you want to present your solution using an Excel spreadsheet or other document, please place it in the "Students" folder in the course folder before the start of class. After each class, I will place in the course folder a suggested solution to each assigned problem and a discussion of the case questions.
Class attendance
I expect you to attend every class. If you are not able to attend class on a particular day, I expect you notify me in advance. I interpret the absence of your name card as an effort to attract a cold call.
Materials
The textbook for the course is Accounting for Decision Making and Control (6th edition) by Jerry Zimmerman. There is also a course packet that contains some of the cases we will use in this course.
Honor Principle
The Tuck Honor Principle applies to every aspect of this course. Although some of the material is new each term, much of the material carries over from year to year. To guarantee you the full opportunity for maximum learning from the cases, the following ground rules apply:
1. Looking at notes, handouts, problem sets, or exams from prior years all constitute violations of the Honor Code.
2. Discussion of the weekly problem sets and cases with other students in the class is strongly encouraged.
3. After the course is over, you will not provide any materials from the class to next year’s students.
Laptop Policy
Use of laptops to take notes during class is permitted.
Grading
All written work will be graded and returned to you promptly. Grading will be based on three take-home quizzes (30% each) and your class participation (10%). The quizzes are open book and open notes. The distribution of grades will be consistent with the guidelines in the student handbook.
Schedule
Week 1 (January 5 & 6):
Accounting costs:
Fixed and variable costs; cost-volume-profit analysis; product and period costs; cost estimation.
Reading: Chapters 1 and 2B-2F.
Problems for week one. Case: Murfreesboro Sour Mash (course pack).
Week 2 (January 11 & 12):
Opportunity costs:
Opportunity cost of materials, labor, capacity, and capital.
Reading: Chapter 2A and the abstract to "The Effects of Accounting Knowledge and Context on the Omission of Opportunity Costs in Resource Allocation Decisions" by Sandra Vera-Muñoz. The abstract is in the course pack.
Problems for week two. Case: Tashtego (course pack).
Week 3 (January 19 & 20):
Organizational architecture:
Economic and accounting depreciation; opportunity cost of capital; agency costs; organizational architecture.
Reading: Chapters 3 (review) and 4.
Problems for week three. Case: Jones Ironworks (course pack).
Quiz #1:
A take-home quiz will be distributed in class on Wednesday, January 20 and is due in class on Monday, January 25.
Quiz
Week 4 (January 25 & 26):
Responsibility accounting:
Divisional performance measures; EVA®; the controllability principle; transfer pricing.
Reading: Chapter 5.
Problems for week four. Case: Celtex (Case 5-2).
Week 5 (February 1 & 2):
Budgeting:
Budgets and incentives for communication; flexible budgeting; marketing variances.
Reading: Chapters 6 and 13C.
Problems for week five. Case: Boston Creamery (course pack).
Week 6 (February 8 & 9):
Cost allocation:
Reasons to allocate costs; allocating capacity costs; allocating service department costs; joint costs.
Reading: Chapters 7 and 8.
Problems for week six. Case: Wyatt Oil (course pack).
Quiz #2:
A take-home quiz will be distributed in class on Tuesday, February 9 and is due in class on Monday, February 15.
Quiz
Week 7 (February 15 & 16):
Absorption cost systems:
Allocating overhead; full absorption costing; finding the optimal product mix; incentives to overproduce.
Reading: Chapters 9 and 10A.
Problems for week seven. Case: Baldwin Bicycles (course pack).
Week 8 (February 22 & 23):
Criticisms of absorption costing:
Activity-based costing.
Reading: Chapter 11.
Problems for week eight. Case: Dyna Golf (Case 11-4).
Week 9 (March 1 & 2):
Standard costs and variances:
Standard cost systems; direct labor and material variances; overhead variances; cost of quality; balanced scorecard.
Reading: Chapters 12, 13A-B and 14.
Problems for week nine. Case: Rust Belt Mufflers (Case 12-2).
Quiz #3:
A take-home quiz will be distributed in class on Tuesday, March 2 and will be due on Monday, March 8.
