# Managerial Accounting

Managerial Accounting provides an introduction to fundamental accounting topics with an emphasis on how to interpret, rather than prepare, financial information. Students explore how managers use accounting information to make strategic business decisions. The course includes pre-assessments, self-assessments, interactive exercises, videos, and games that appeal to a variety of learning styles.

Topics covered in this course include basic costing systems used by businesses to track and assign costs, cost behavior, description of and analysis of cost flows, Cost-Volume-Profit analysis, break-even analysis, how budgets assist with planning and decision-making, variance analysis and management by exception, marginal analysis and make-or-buy decisions, short-term decision making, the theory of constraints (TOC) and constraint analysis, capital investment decisions, and financial statement analysis.

## Module 1: Introduction to Managerial Accounting

• Compare and contrast the differences between financial and managerial accounting
• Describe the primary roles of managers in relation to the planning and control cycle
• Differentiate between external and internal users and uses of accounting information
• Distinguish and classify manufacturing (product) versus non-manufacturing (period) costs
• Summarize the four financial statements and how each is utilized by managers
• Illustrate the difference in the financial statements of manufacturing versus retail companies
• Calculate the cost of goods manufactured (COGM)
• Define and calculate the cost of goods sold (COGS)

## Module 2: Job Costing

• Compare and contrast job, process, and activity-based costing systems.
• Define the types of industries that utilize job costing systems.
• Discuss the strengths and weaknesses of job costing systems.
• Calculate and assess the value of knowing cost per unit
• Outline and explain the flow of inventory costs in job costing systems.
• Recognize issues related to allocating manufacturing overhead.
• Define a cost driver and explain how cost drivers in calculating and allocating manufacturing overhead costs.
• Determine whether manufacturing overhead has been over- or underapplied.
• Demonstrate an understanding of the proper accounting for normal and abnormal spoilage

## Module 3: Process Costing

• Describe process costing as a cost system
• Distinguish industries that utilize process costing
• Discuss the strengths and weaknesses of process costing as a system to track and assign costs to products and services
• Compare and contrast process costing and job costing
• Illustrate the flow of material costs for a process manufacturer
• Define and compute equivalent units of production
• Calculate and assign costs using process costing
• Prepare a cost of production report

## Module 4: Activity-based Costing

• Define the nature of activity-based costing
• Understand and identify the appropriate use of the cost flows of an activity-based costing system
• Identify the benefits and limitations of activity-based costing
• Calculate inventory values, cost of goods sold, and product cost using an activity-based system
• Differentiate between various cost drivers in an activity-based system
• Discuss the strategic value of cost information regarding products and services, pricing, overhead allocations, and other issues
• Demonstrate an understanding of the proper accounting for normal and abnormal spoilage
• Calculate product cost using an activity-based system and compare and analyze the results with costs calculated using a traditional system
• Compare and contrast various types of overhead application rates

## Module 5: Cost Behavior

• Compare and contrast fixed, variable, and mixed costs
• Summarize the relevant range and how it relates to cost behavior
• Discuss the relationship between costs and production volume
• Differentiate how fixed, variable and mixed costs react to changes in production
• Analyze mixed costs using the high-low method
• Describe the relationship between costs and production volume
• Discuss the predictable nature of cost behavior as it relates to decision making
• Separate mixed costs into their fixed and variable components using the high-low method

## Module 6: Cost-Volume-Profit Analysis

• Discuss the value of cost-volume-profit analysis as a tool to make decisions
• Evaluate the strengths and weaknesses of cost-volume-profit analysis
• Calculate the total contribution margin, contribution margin per unit, and contribution margin ratio
• Analyze various what-if scenarios using the contribution margin per unit and contribution margin ratio
• Identify the strategic steps managers can take to increase contribution margin and profitability
• Discuss the contribution margin income statement as a measure of cost behavior
• Compute the break-even point and break-even revenue for a given product
• Interpret various graphs utilized in break-even and cost-volume-profit analysis

## Module 7: Budgeting, The Master Budget, and Profit Planning

• Describe the role that budgeting plays in the overall planning and performance evaluation process of an organization
• Explain the interrelationships between economic conditions, industry situation, and a firm’s plans and budgets
• Identify the role that budgeting plays in formulating short-term objectives and planning and controlling operations to meet those objectives
• Demonstrate an understanding of the role that budgets play in measuring performance against established goals
• Explain how the budgeting process facilitates communication among organizational units and enhances coordination of organizational activities
• Identify the characteristics that define successful budgeting processes
• Define budgetary slack and discuss its impact on goal congruence
• Discuss the importance of a policy that allows budget revisions that accommodate the impact of significant changes in budget assumptions
• Identify best practice guidelines for the budget process
• Explain the role of budgets in monitoring and controlling expenditures to meet strategic objectives

## Module 8: Flexible Budgets

• Define the purpose of a flexible budget
• Demonstrate an understanding of how a flexible budget is developed
• Identify a flexible budget’s components and explain the interrelationships among the components
• Compare and contrast the benefits and limitations of a flexible budget
• Discuss the benefits and limitations of measuring performance by comparing actual results to the master budget
• Prepare a flexible budget based on actual sales (output) volume
• Calculate the sales-volume variance and the sales-price variance by comparing the flexible budget to the master (static) budget
• Analyze the flexible-budget variance by comparing actual results to the flexible budget

## Module 9: Standard Costs and Variance

• Demonstrate an understanding of price (rate) variances
• Analyze variation from standard cost expectations
• Calculate and interpret sustainable equity growth
• Calculate the price variances related to direct materials and direct labor inputs
• Calculate and explain a yield variance
• Demonstrate an understanding of efficiency (usage) variances
• Calculate the efficiency variances related to direct materials and direct labor inputs
• Explain how efficiency (usage) variances can be further analyzed as mix and yield variances

## Module 10: Cost Concepts for Decision Making

• Identify and explain the different types of responsibility centers
• Recommend appropriate responsibility centers given a business scenario
• Demonstrate an understanding of contribution margin reporting as used for performance evaluation and calculate a contribution margin
• Define the stand-alone method and incremental method of cost allocation
• Analyze and interpret ROI calculations and RI calculations and evaluate performance on the basis of the analysis
• Compare and contrast the benefits and limitations of ROI and RI as measures of performance
• Describe how the DuPont model enhances the analysis of ROE calculations
• Identify and describe internal business process measures and evaluate their relevance for a specific organization using the balanced scorecard
• Discuss the characteristics of successful implementation and use of a balanced scorecard
• Analyze and interpret a balanced scorecard and evaluate performance on the basis of the analysis

## Module 11: Performance Evaluation and Decentralization

• Calculate the effect on operating income of a make-or-buy decision
• Calculate the effects on operating income of a decision to sell or process further; and of a decision to drop or add a segment
• Discuss the strategic value of cost information regarding products and services, pricing, overhead allocations, and other issues
• Demonstrate a general understanding of the theory of constraints
• Identify the five steps involved in theory of constraints analysis
• Define throughput costing (super-variable costing) and calculate inventory costs using throughput costing
• Discuss the strategic value of cost information regarding products and services, pricing, overhead allocations, and other issues
• Discuss how the theory of constraints and activity-based costing are complementary analytical tools
• Describe how capacity level affects product costing, capacity management, pricing decisions and financial statements
• Explain how using practical capacity as the denominator for fixed costs rate enhances capacity management

## Module 12: Capital Budgeting

• Identify and discuss qualitative considerations involved in the capital budgeting decision
• Compare and contrast the advantages and disadvantages/limitations of the payback method and discounted payback methods
• Prepare a capital expenditure budget
• Discuss the relationship between the capital expenditure budget, the cash budget, and the pro forma financial statements
• Calculate net present value (NPV) and internal rate of return IRR
• Recommend project investments on the basis of the decision criteria for both net present (NPV) and internal rate of return (IRR)
• Compare NPV and IRR focusing on the relative advantages and disadvantages of each method
• Explain why NPV and IRR methods can produce conflicting rankings for capital projects
• Demonstrate an understanding of how income taxes impact capital structure and capital investment decisions
• Describe the role of the post-audit in the capital budgeting process
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