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Cost 2 Course Outline

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Minyichel Baye
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19 views2 pages

Cost 2 Course Outline

Uploaded by

Minyichel Baye
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Wollo University

College of Business and Economics


Accounting and Finance Program
program BA degree in Accounting & Finance
Course Number AcFn3032
Course Title Cost & management Accounting II
ETCTS Credits 5
Contact Hours 3
(per week)
After successfully completing this course, students will be able to:
 Apply managerial accounting and its objectives in a way that demonstrates a clear understanding of
ethical responsibilities.
 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 Contents
1. Cost-Volume-Profit Analysis, Absorption, and Variable Costing
1.1 Absorption versus Direct Costing
1.2 The concept of profit contribution
1.3 Cost-volume-profit (CVP) analysis: understanding the concepts of break-even and margin of safety
1.4 Cost Volume Profit Analysis under Absorption Costing
1.5 The use of linear, curvilinear and step functions and how their calculations are used to analyze cost
behavior
1.6 The concepts of cost units, cost centers and profit centers
2. Relevant information and Decision Making
2.1 Relevant and irrelevant information
 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
 Budgeting as a multi-purpose activity,
 Budgeting and behavioral influences,
 Quantitative aids in budgeting: learning curve theory and application; limiting factors and linear
programming,
 Activity-based budgeting,
 Control theory and budgeting,
 Uncertainty and budgeting,
 Identification of relevance, strengths and weaknesses of budgeting and budgetary control
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
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

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