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BMAC5203
STUDY GUIDE
BMAC5203
Accounting for Decision Making
First Edition (September 2011)
Prepared by:
Published by:
First Published:
September 2011
STUDY GUIDE
BMAC5203
STUDY GUIDE
BMAC5203
Contents
Course Introduction................................................................................. 58
Course Synopsis ................................................................................ 5
Course Aims....................................................................................... 5
Course Outcomes .............................................................................. 6
Course Load....................................................................................... 6
Course Timetable............................................................................... 6
Course Requirements.................................................................................. 7
Feedback and Course Evaluation ...................................................... 7
Course Resources ....................................................................................... 7
Set Textbook(s).................................................................................. 7
Additional References ........................................................................ 7
Extra Recommended Reading ........................................................... 7
my Virtual Learning Environment (myVLE) ........................................ 7
OUM Digital Library Resources.......................................................... 8
Assessment.................................................................................................. 8
Assessment Format ........................................................................... 8
Assignment Question(s)..................................................................... 8
Final Examination............................................................................... 8
Late Submission of Assignment(s)..................................................... 8
Important Dates.................................................................................. 8
Weekly Study Guide ............................................................................ 1046
Week 1 ............................................................................................. 10
Week 2 ............................................................................................. 14
Week 3 ............................................................................................. 18
Week 4 ............................................................................................. 22
Week 5 ............................................................................................. 26
Week 6 ............................................................................................. 31
Week 7 ............................................................................................. 37
Week 8 ............................................................................................. 39
Week 9 ............................................................................................. 42
Week 10 ........................................................................................... 45
Appendix A ................................................................................................. 47
Responsibilities of students.............................................................. 47
Plagiarism, cheating & collusion ...................................................... 47
STUDY GUIDE
BMAC5203
STUDY GUIDE
BMAC5203
COURSE INTRODUCTION
Course Synopsis
The BMAC5203 course is designed for business students without previous
in-depth exposure to managerial accounting. Internal or managerial
accounting system provides exclusive business information that assists
managers in handling the tasks of planning, control and decision-making.
Todays management accountants focus on the advisory and consulting
services related to strategic planning, organisational control and business
decisions. Their roles are not only revolved around product costing, pricing,
asset/liability management, investment analysis and performance evaluation
but also extends to contemporary issues such as financial and business
reengineering.
The type and nature of information supplied by the internal accounting
system is flexible and is customised to the needs of managers. It is also a
dynamic function that evolves consistently as organisational changes occur.
Parallel to the current trend in business, issues of global significance are
widely discussed and explored in this course.
Course Aims
The broad aims of this course are to:
1.
2.
3.
STUDY GUIDE
BMAC5203
Course Outcomes
At the completion of this course, it is expected that learners will be able to:
1.
2.
3.
Course Load
It is a standard OUM practice that learners accumulate 40 study hours for
every credit hour. As such, for a three-credit hour course, you are expected
to spend at least 120 hours of learning. Table 1 gives an estimation of how
the 120 hours could be accumulated.
Table 1: Allocation of Study Hours
Activities
No of Hours
60
15
10
Completing assignment
20
Revision
15
Total
120
STUDY GUIDE
BMAC5203
COURSE REQUIREMENTS
Prerequisites or Co-requisite
None.
COURSE RESOURCES
Set Textbook(s)
Textbook (supplied in course-pack)
Mowen, M. M., Hansen, D. R., & Heitger, D. L. (2009). Cornerstones of
managerial accounting (3rd ed.). South-Western Cengage Learning.
Additional References
Brandon, C. H., & Drtina, R. E. (1997). Management accounting strategy and
control. Mc Graw-Hill Companies, Inc.
Weygant, J. J, Kieso, D. E., & Kimmel, P. D. (1999). Managerial accounting:
Tools for business decision-making. John Wiley.
STUDY GUIDE
BMAC5203
ASSESSMENT
Assessment Format
Please refer to myVLE.
Assignment Question(s)
Please refer to myVLE.
Final Examination
Please refer to myVLE.
Important Dates
Please refer to myVLE.
Note: This study guide is an excerpt from various sources. The author has
made all attempts to cite the original sources.
8
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BMAC5203
STUDY GUIDE
BMAC5203
(b)
Study Notes
The learning outcomes:
1.
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STUDY GUIDE
(b)
BMAC5203
(ii)
Managerial accounting
information systems
Financial accounting
information systems
Targeted user:
Restrictions:
Types of information:
financial information
Time orientation:
Aggregation:
2.
For stock valuation (costing products and services) and for profit
determination;
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STUDY GUIDE
BMAC5203
(b)
(c)
evaluation,
and
continuous
The subsequent topics in this course will require learners to learn and
understand how MAS is used by managers to achieve each of the
basic objectives listed above.
3.
(b)
(c)
(d)
Study Questions
(a)
(b)
(c)
(d)
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STUDY GUIDE
BMAC5203
2.
Question: Will you be asked to prepare Profit and Loss and Balance
Sheet statements during exams?
Answer: A full set of accounts (balance sheet and profit and loss
statement) is not required in this course. You may however, be asked
to prepare a simple profit summary.
13
STUDY GUIDE
BMAC5203
Week 2
Topic 2: Basic Cost Concepts and Cost Classifications
Readings
Mowen, M. M., Hansen, D. R., & Heitger, D. L. (2009). Cornerstones of
managerial accounting (3rd ed.). South-Western Cengage Learning.
e-Content
(a)
(b)
Study Notes
The learning outcomes:
1.
(b)
(c)
(d)
(e)
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STUDY GUIDE
2.
BMAC5203
15
STUDY GUIDE
BMAC5203
3.
(b)
(c)
(b)
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STUDY GUIDE
5.
BMAC5203
(c)
(d)
Study Questions
Refer to your main text and attempt the following exercises:
(a)
(b)
(c)
(d)
(e)
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STUDY GUIDE
BMAC5203
Week 3
Topic 3: Traditional Overhead and Activity Based Costing, Job
Order Costing and Process Costing
Readings
Mowen, M. M., Hansen, D. R., & Heitger, D. L. (2009). Cornerstones of
managerial accounting (3rd ed.). South-Western Cengage Learning.
e-Content
(a)
(b)
Study Notes
The learning outcomes:
1.
(i)
OAR
(ii)
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STUDY GUIDE
2.
(iii)
(iv)
(a)
(b)
(c)
(d)
3.
BMAC5203
(i)
(ii)
(iii)
(iv)
(v)
(vi)
arise
each
time
product
is
(ii)
(iii)
(iv)
(a)
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STUDY GUIDE
(b)
4.
5.
6.
BMAC5203
(a)
(b)
(c)
(d)
(a)
(b)
(c)
(a)
(b)
In order to determine the cost per unit produced, the output of the
period must be ascertained.
(c)
(d)
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STUDY GUIDE
BMAC5203
Study Questions
(b)
(c)
(d)
(e)
A list of important terms and brief explanations can be found in the Glossary
section of your main text. Please refer to pages 731 to 738.
If the explanations are unclear, learners are advised to refer to an English/
Bahasa Malaysia Accounting dictionary.
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STUDY GUIDE
BMAC5203
Week 4
Topic 4: Cost-Volume-Profit (CVP) Analysis
Readings
e-Content
(a)
(b)
Study Notes
The learning outcomes:
1.
Assumptions:
(a)
(b)
(c)
(d)
(e)
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STUDY GUIDE
2.
BMAC5203
Determine the break-even point in sales units and sales value, the
amount of revenue required for a target profit and the margin of
safety.
(a)
(b)
(ii)
(c)
(d)
(e)
(f)
(i)
Equation method
(ii)
Formula approach
(iii)
Equation method:
Operating income = (Price Units sold) (Variable cost per unit
Units sold) Total fixed expenses
At breakeven, this can also be expressed as:
Total revenue Total variable cost Total fixed cost = $0
or
Total revenue = Total variable cost + Total fixed cost
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STUDY GUIDE
(g)
BMAC5203
Formula approach:
(h)
(i)
Fixed costs
Contribution per unit
Fixed costs
C/S ratio
Graphical approaches:
(i)
(ii)
Other calculations:
Study Questions
(b)
(c)
(d)
(e)
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STUDY GUIDE
BMAC5203
(a)
(b)
A list of important terms and brief explanations can be found in the Glossary
section of your main text. Please refer to pages 731 to 738.
If the explanations are unclear, learners are advised to refer to an English/
Bahasa Malaysia Accounting dictionary.
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STUDY GUIDE
BMAC5203
Week 5
Topic 5: Short-term Decision Making
Readings
e-Content
(a)
(b)
Study Notes
The learning outcomes:
1.
(a)
(b)
(ii)
(c)
(d)
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STUDY GUIDE
BMAC5203
2.
(a)
Relevant costs are future costs that affect future decisions which
differ across alternatives.
(b)
If a future costs is the same for more than one alternative, then it
has no effect on decisions. Such a cost is irrelevant.
(c)
(d)
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Sunk costs
(ii)
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STUDY GUIDE
(e)
3.
BMAC5203
(iii)
(iv)
Overhead absorbed
(ii)
(iii)
(a)
(b)
(c)
(d)
(e)
(i)
(ii)
(iii)
(ii)
(iii)
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STUDY GUIDE
(iv)
BMAC5203
4.
(a)
(b)
5.
(a)
(b)
The special order price is higher than the variable cost or relevant
costs of producing the product;
(c)
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STUDY GUIDE
BMAC5203
(d)
Acceptance of the special order will not affect the normal sales
demand; and
(e)
Exercises 13.13, 13.14.13.19, 13.24, 13.25 and 13.26 on pages 582587 of the main text.
(b)
Problems 13.39, 13.40 and 13.42 on pages 591-592 of the main text.
(c)
A list of important terms and brief explanations can be found in the Glossary
section of your main text. Please refer to pages 731 to 738.
If the explanations are unclear, learners are advised to refer to an English/
Bahasa Malaysia Accounting dictionary.
30
STUDY GUIDE
BMAC5203
Week 6
Topic 6: Planning and Control: Budgetary Control
Systems
Readings
e-Content
(a)
(b)
Study Notes
The learning outcomes:
1.
(a)
(b)
Budgets are financial plans for the future and are closely linked to
the long-term plan of the organisation.
(c)
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STUDY GUIDE
(d)
(e)
2.
BMAC5203
(ii)
(iii)
(ii)
(iii)
(iv)
(a)
(b)
(c)
(d)
(e)
(f)
Financial budgets shows the inflows and outflows of cash and the
firms financial position.
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STUDY GUIDE
(g)
BMAC5203
(ii)
(iii)
(iv)
(v)
(vi)
planned
(ii)
(iii)
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STUDY GUIDE
BMAC5203
3.
(a)
(b)
(c)
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STUDY GUIDE
BMAC5203
(d)
(e)
(f)
(g)
(h)
(ii)
(iii)
Study Questions
(b)
(c)
(d)
None
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STUDY GUIDE
BMAC5203
A list of important terms and brief explanations can be found in the Glossary
section of your main text. Please refer to pages 731 to 738.
If the explanations are unclear, learners are advised to refer to an English/
Bahasa Malaysia Accounting dictionary.
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STUDY GUIDE
BMAC5203
Week 7
Topic 7: Planning and Control: Flexible Budget
Readings
e-Content
(a)
(b)
Study Notes
The learning outcome:
Prepare a flexible budget and use it for performance reporting
(a)
(b)
(c)
When preparing the flexible budget, all variable costs are flexed to
actual activity level, whilst fixed cost remain the same.
(d)
The difference between flexible budget and actual costs are referred to
as variances.
Refer to Illustrations 11.2 and 11.3 on page 465 and 466 respectively.
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STUDY GUIDE
BMAC5203
Study Questions
None
Glossary of Important Terms
A list of important terms and brief explanations can be found in the Glossary
section of your main text. Please refer to pages 731 to 738.
If the explanations are unclear, learners are advised to refer to an English/
Bahasa Malaysia Accounting dictionary.
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STUDY GUIDE
BMAC5203
Week 8
Topic 8: Planning and Control: Standard Costing
Readings
e-Content
(a)
(b)
Study Notes
The learning outcomes:
1.
(a)
(b)
Types of standards:
(i)
(ii)
(c)
(d)
(e)
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STUDY GUIDE
(f)
2.
BMAC5203
(ii)
(iii)
Compute the material and labour costs variance and explain how
they are used for control.
The diagram below shows the types of variances and the way to
compute the variances:
(a)
(b)
(c)
(d)
(e)
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STUDY GUIDE
BMAC5203
Study Questions
(b)
A list of important terms and brief explanations can be found in the Glossary
section of your main text. Please refer to pages 731 to 738.
If the explanations are unclear, learners are advised to refer to an English/
Bahasa Malaysia Accounting dictionary.
41
STUDY GUIDE
BMAC5203
Week 9
Topic 9: Divisional Performance and Performance
Report
Readings
e-Content
(a)
(b)
Study Notes
The learning outcomes:
1.
(a)
(b)
(ii)
(iii)
(c)
(d)
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STUDY GUIDE
2.
(a)
(b)
3.
BMAC5203
(ii)
(iii)
(iv)
(i)
(ii)
(iii)
Operating income
Average operating assets
Asset turnover
Operating income
Sales
Sales
Average operating assets
Advantages of ROI
Limitations
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STUDY GUIDE
BMAC5203
(b)
(c)
(b)
A list of important terms and brief explanations can be found in the Glossary
section of your main text. Please refer to pages 731 to 738.
If the explanations are unclear, learners are advised to refer to an English/
Bahasa Malaysia Accounting dictionary.
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STUDY GUIDE
BMAC5203
Week 10
Topic 10: Other Contemporary Issues
Readings
(a)
(b)
Study Notes
The learning outcomes:
Explain contemporary management accounting issues:
(a)
(b)
(c)
(d)
Target costing, refer to pages 434, 576577 and on-line resources; and
(e)
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STUDY GUIDE
BMAC5203
Study Questions
(a)
(b)
(c)
(d)
(e)
(f)
What is life cycle costing? Explain how organisations use life cycle
costing.
A list of important terms and brief explanations can be found in the Glossary
section of your main text. Please refer to pages 731 to 738.
If the explanations are unclear, learners are advised to refer to an English/
Bahasa Malaysia Accounting dictionary.
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STUDY GUIDE
BMAC5203
Appendix A
Responsibilities of Students
1.
2.
3.
4.
5.
Ethical Behaviour
Learners MUST read and conform to
the universitys Code of Ethics as
stated in the Postgraduate Students
Handbook.
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