Name of University: Woldia university
Name of College/Faculty: Business and economics
Name of Department: Accounting and Finance
Department Accounting & Finance
Program BA degree in management
Module M9 Cost and Managerial Accounting
Number/Title
Module Code ACFN-3030
The objective of This module will cover cost accumulation concepts and techniques for Product and Service
the module Costing and Planning and Control, as well as Non-routine Managerial Decisions.
Modern management accountants are not only concerned with how cost data are transformed
into cost accounting information but more importantly how to use cost accounting information
to aid managerial goals.
The module should develop the student's understanding, skill, and analytical ability in cost and
management accounting to the level where he or she can function effectively (and efficiently)
as a professional cost and management accountant in industry, public accounting, management
consulting, government, or personal business management.
Courses of the Module
Course Number AcFn3032
Course Title Cost &Management Accounting II
ETCTS Credits 5
Contact Hours 3
(perweek)
Name of instructor Kokebi. B
and address
Course After successfully completing this course, students will be able to:
objectives & Apply managerial accounting and its objectives in a way that demonstrates a clear
Competences to understanding of ethical responsibilities.
be Acquired Analyze cost-volume-profit techniques to determine optimal managerial decisions.
Prepare a master budget and demonstrate an understanding of the relationship between
the components.
Perform cost variance analysis and demonstrate the use of standard costs in flexible
budgeting.
Prepare analyses of various special decisions, using relevant costing and benefits.
Course The cost accounting course concerns with fundamental cost concepts, behavior, analysis, and
Description the use of cost information to develop superior decision-making processes and outputs. This
course introduces the production, communication, and use of accounting information within
the context of business activities.
WEEKS Course Contents
1. Cost-Volume-Profit Analysis
2WEEKS 1.1 Cost Behavior
{1ST&2ND } 1.2 Cost-volume-profit (CVP) analysis: understanding the concepts of break-even and margin
of safety
1.3 Approach of Cost Volume Profit Analysis
1.4 Target income
1.5 Cost-volume-profit (CVP) calculation for sells mix
2. Relevant information and Decision Making
4 WEEKS 2.1 Relevant and irrelevant information
{3RD- 6TH } Explain the concept of relevant costs and relevant revenues and how this is
potentially different from the notion of fixed and variable costs.
Explain sunk costs‟ and why they are considered irrelevant to decisions.
Explain such terms as opportunity costs, avoidable costs, differential costs‟
and incremental costs.
2.2 Marketing Decisions
2.3 Production Decisions
3. Information for budgeting, planning and control purposes
3.1 Objectives and concepts of budgetary systems
3.2 Types of budgetary systems: fixed and flexible budgets, zero-based budgets, and
incremental, periodic and continuous budgeting, Short-term vs. long-term
Budgets
3.3 Monitoring and controlling performance; the calculation of variances; the
determination of the causes of variances
3.4 Master budgets
Manufacturing Businesses
Merchandising Businesses
4. Standard Costing, Flexible Budgeting, and Variance analysis
4.1. The uses and limitations of standard costing methods
4.2. The determination of standards
4.3. Flexible budgets and variances Identification and calculation of variances: sales
variances (including quantity and mix); cost variances (including mix and yield);
absorption and marginal approaches
4.4. Identification of significant variances and their interrelationship
4.5. The uses of planning and operational variances
4.6. Trends, materiality, and controllability of variances
4.7. Uncertainty and variance analysis
4.8. Identification of relevance, strengths, and weaknesses of standard costing
4. Standard Costing, Flexible Budgeting, and Variance analysis
5 WEEKS 4.1 The uses and limitations of standard costing methods
{7TH - 11 TH }
4.2 The determination of standards
4.3 Flexible budgets and variances
4.4 Identification and calculation of variances: sales variances (including quantity and
mix); cost variances (including mix and yield); absorption and marginal approaches
4.5 Identification of significant variances and their interrelationship
4.6 The uses of planning and operational variances
4.7 Trends, materiality, and controllability of variances
4.8 Uncertainty and variance analysis
4.9 Identification of relevance, strengths, and weaknesses of standard costing and variance
analysis for performance and control
5. The pricing of goods and services
5.1 Target and minimum pricing.
5.2 Price /demand relationships,
5.3 The pricing of special orders and short-life products,
5.4 Pricing in service industries,
5.5 Transfer Pricing
o Transfer Pricing: General Rule for Optimal Transfer Price
o Transfer Pricing: Imperfectly Competitive Intermediate Product Markets
3WEEKs 6. Responsibility Accounting
{12TH - 14tTH} 6.1 Responsibility Accounting
6.2 Responsibility centers
6.3 Performance Measurement
Assessment/Evaluation on The evaluation scheme will be as follows:
Component Weight Coverage
Test 1 10% Chapters 1 &2
Mid 20% Chapters 3 & 4
Assignment 1 15% Unknown
Quiz 1 5% Unknown
Final Exam 50% All chapters
Work load in hours
Text Book:
Text and reference books Horngren, Foster, &Datar. Cost Accounting: A Managerial
Emphasis. 9th Ed. 1997
Horngren, Sunden& Stratton. Introduction to Management
Accounting. 11th Ed. 1999
Reference Books
C.T Homgren, Introduction to Management Accounting 4th to 8 th
editions, 1999 USA
C.T. Homgren, Cost Accounting: A Managerial Emphasis 5th to
8th ecitionsprentice Hall Inc. 1982 to 1994
Homgren, foster, &Datar, Cost Accounting A Managerial
Emphasis. 10 thEcition
L.E. Heitger Managerial Accounting 1th and 2 nd editions,
McGraw Hill , 1998, India
GetuJemaneh, Management Accounting 1996.
Ray [Link], Managerial Accounting. 6th edition
Caluinengler, Managerial Accounting 2nd edition