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Cost and Managerial Accounting

Fall 2015
Professor Mike Shields
Contact Information
Class Times:
Class Location:
Office Hours:
Office Location:
Office Phone:

M-W: 10:20-11:40 (Section 1) and 12:40-2:00 (Section 2)

Sections 1 and 2: N022 Business College Complex
M-W 2:30-3:30, and by appointment
BCC N255

Course Objective and Relevance

This course is intended to provide accounting majors with detailed information about the practice
of cost accounting from a managerial decision-making perspective. Knowing about costs and
cost-based managerial decisions is important because accountants and auditors allocate much of
their time and effort to measuring, reporting, analyzing, and managing costs. After revenues, the
biggest number on an organizations income statement typically is cost of goods sold or cost of
services provided, so its not surprising that cost accounting is important to all accounting career
Accounting Information Systems. Designing and implementing cost accounting systems
correctly is an important and often complicated part of installing and troubleshooting accounting
software and integrated software systems like ERP.
Auditing. In many industries, cost of goods sold and inventories have been the accounts where
auditors are most likely to discover non-fraudulent financial-statement errors that need to be
corrected, so a considerable amount of time is devoted to auditing these accounts.
Financial accounting. Cost of goods sold or services provided is likely to be the largest
expense on GAAP income statements, and inventories are one of the largest current assets on
GAAP balance sheets. The estimating and reporting these costs can be a complex task.
Management accounting. Understanding costs and how they relate to revenues is essential to
managing any organization successfully. Managers need to know what the organization is
spending its money on, and howif at allthis spending is helping the organization to achieve
its goals.
Tax. Cost of goods sold (or services provided) is likely to be the largest deduction an
organization can take when calculating its taxable income.
Cost accounting is complex. You learned some elements of it in ACC 202 and 300, when you
studied inventories and cost of goods sold, but theres much more to cost accounting than this!

We will use knowledge and skills learned in the three prerequisites for this course: ACC 202 and
300 as well as STT 315.
Course Website
Desire2 Learn (D2L) at provides a copy of this syllabus, the chapter outline and
study guide, solutions to the practice (bolded) and review (italicized) problems in the chapter
outline and study guide, lecture slides, assignments, practice exams, and an online grade book.
Both sections of ACC341 have the same D2L website: FS14-ACC-341-Sections 001 and 002.
Required Reading
Textbook: Horngren, Datar, and Rajan, Cost Accounting, Student Value Edition Plus NEW
MyAccountingLab with Pearson eTextAccess Card Package, 15/E ISBN 0133781100 (binder
version) or 0133803813 (bound version). Do not use the international or 14th editions! A copy
of Cost Accounting: A Managerial Emphasis 15th edition is on reserve in the Gast Business
Library. If you do not buy the Student Value Edition, then you will need to purchase access to
Access to online resources in MyAccountingLab comes with your textbook. Page 7 of this
syllabus has instructions for how to access this website. MyAccountingLab has solutions to most
of the problems for every chapter in the textbook. Learning assistance is available for each
problem to help you solve the problem if you get stuck or your answer is incorrect.
MyAccountingLab also includes a quiz and short test for each chapter that you might find useful.
Finally, it has a study plan which gives you a short test to identify what material you need to
learn and then it presents you with that material.
Grading Overview
Midterm exam 1
Midterm exam 2
Final exam
Assignments (individual work)

(8 @ 5 points each)
(9 @ 15 points each)
500 points

Course grading will approximate a fixed scale with the following cutoffs:
90% - 4.0; 85% - 3.5; 80% - 3.0; 75% - 2.5; 70% - 2.0; 65% - 1.5; 60% - 1.0.
I reserve the right to lower (not raise) grade cutoffs to insure that they are at natural gaps in the
grade distribution and to insure a reasonable mean grade.
Grading Details

Preparing for quizzes and exams will build your technical accounting knowledge, while the
assignments will expand your knowledge of business practice and develop your skill in solving
unstructured problems and communicating complex technical issues. Many assignments will also
introduce you to analysis capabilities of Excel.
Quizzes will help you to check your understanding of new material before exams. They also
provide incentives for keeping up with this course on a daily basis. Quizzes are closed-book and
cover material since the previous quiz. Twelve or more quizzes will be given, and your best
eight quiz scores will be included in determining your total points. Quizzes will be given at the
start of class and no late or make-up quizzes will be given. While taking quizzes, the only
electronic device that may be visible and turned on is a hand-held calculator.
Exams will consist of problems similar to those at the end of the chapters in the textbook.
Practice exams are on D2L. The exams are closed-book but you may bring one page of notes
(8.5 x 11, both sides) with definitions, formulas, etc. Each exam will cover the material
assigned since the previous exam (i.e., the exams are not cumulative). Exams will only be given
at the assigned times unless you have an authorized excuse. If you have an authorized excuse for
not attending class when an exam is given, then please talk with me before the exam about an
accommodation for this exam. Bring only a pencil and hand-held calculator to the exam. While
taking exams, the only electronic device that may be visible and turned on is a hand-held
Assignments are provided on D2L. They must be worked and completed on an individual
basis; they are not group assignments. Your best nine of ten assignment scores will be used in
determining your total points. Assignments should be turned in to the relevant drop box on
D2L before 10:00AM on the date the assignment is due. Note that communication as well as
technical analysis matters to the grades on these assignments: What you turn in should be easy to
read and understandable and only in English. We will often discuss these assignments in class
after they are turned in. You may want to bring a copy of your assignment or notes to class to use
in the discussion. Late assignments will not be accepted for full credit unless you have an
authorized excuse.
Assignments should be typed in Excel or Word as specified in the assignments. All calculations
should be done in Excel by using formulas. Calculations not based on formulas in Excel will not
receive full credit. Highlight key parts of your solution so that they are easy to find.
Re-grading: If you believe something has been incorrectly graded, then I am happy to re-grade
it after you provide me with a written (not oral) explanation of what you believe is incorrectly
graded and how it should have been graded within one week after the item is returned to you.
Recommendations for Study
Two resources are provided on D2L for class preparation and review: an abridged version of the
lecture slides and a chapter outline and study guide for the textbook. The lecture slides will

reduce your need for note-taking in class and aid you in preparing for and reviewing classes,
quizzes, assignments and exams.
The chapter outline and study guide provides overviews to identify the main objectives of a
chapter or group of chapters. It indicates important chapter sections to study and which sections
you can skip. It also identifies recommended practice (bolded) problems for you to solve as
you study the chapter and review (italicized) problems you can solve to review material after
class and to help prepare for the exams. Solutions for these problems are available on the D2L
and MyAccountingLab websites.
Read the chapters in bite-size chunks as suggested in the chapter outline and study guide. Make
sure you understand these chunks of reading and can do the practice (bolded) problems and
answer the questions in the chapter outline and study guide, before you move on to the next
You can use the quizzes and tests in MyAccountingLab to gain additional practice in solving
problems and learning concepts and relations, as well as in preparing for the exams.
You will not be tested on material that is not covered in class, and we will cover material you
need to do the assignments at least one class period before the assignments are due.
Classroom Etiquette
You should avoid being discourteous by distracting your colleagues from their learning and
participating in class. Distractions to avoid during class include entering or leaving class while
class is in session, using the internet or cell phones during class, reading newspapers or other
material that is not directly related to class, and private conversations with your colleagues
during class.
By registering for this course, you are agreeing not to use any materials obtained, directly or
indirectly, from students or others who have seen it before. More importantly, you are agreeing
not to provide such materials to other students, now or in the future.
MSU Policies
1. Academic Honesty: Article 2.3.3 of the Academic Freedom Report states that, " the student
shares with the faculty the responsibility for maintaining the integrity of scholarship, grades,
and professional standards." In addition, the Department of Accounting and Information
Systems adheres to the policies on academic honesty as specified in General Student
Regulations 1.0, Protection of Scholarship and Grades, and in the all-University Policy on
Integrity of Scholarship and Grades, which are included in Spartan Life: Student Handbook
and Resource Guide. Students who commit an act of academic dishonesty may receive a 0.0
on the assignment or for the course grade.
You are responsible for adhering to the University guidelines on Academic Honesty and
Integrity and to The Broad College Undergraduate Honor Code. Unless explicitly indicated
otherwise, all graded assignments are expected to be the result of your own original work.

Academic dishonesty will be dealt with in the harshest manner available within the
University or College guidelines. Examples of violations include (but are not limited to)
the following: using solutions to assignments from prior semesters, using solutions to
assignments obtained from the internet, copying from other students, letting other
students copy from you, turning in jointly produced solutions, failing to properly cite
any reference materials (including websites) used, or using any other such aids.
These acts will be considered acts of academic dishonesty and will be treated
accordingly. If you have any questions about this policy, then please see me immediately.
2. Accommodations for Disabilities: Students with disabilities should contact the Resource
Center for Persons with Disabilities to establish reasonable accommodations. For an
appointment with a counselor, call 353-9642 (voice) or 355-1293 (TTY).
3. Adds and Drops: The last day to add this course is September 9. The last day to drop this
course with a 100% refund and no grade reported is September 28. The last day to drop this
course with no refund and no grade reported is October 21. You should immediately make a
copy of your amended schedule to verify you have added or dropped this course.
4. Observing a Major Religious Holiday: You may make up course work missed to observe a
major religious holiday only if you make arrangements in advance with me.
5. Participation in a Required Activity: To make up course work missed to participate in a
required activity for another course or a university-sanctioned event, you must provide me
with adequate advanced notice and a written authorization from the faculty member of the
other course or from a university administrator.
6. Students who violate MSU rules related to academic dishonesty may receive a penalty grade,
including but not limited to a failing grade on the assignment or the course. See excerpts
from the Honor Code below.
Broad College Undergraduate Honor Code
The Honor Code applies to all undergraduate students enrolled in the College or in any course
sponsored by the College. Key portions of the Honor Code follow:
All undergraduate Broad students have the responsibility to adhere to the professional values and
standards articulated in the Honor Code.
I. Professional Values and Standards.
Successful and effective managers must act with honesty. Our actions must be consistent with
our values and reflect our high standards of integrity. To succeed, we must rely on our abilities to
collaborate, coordinate, and communicate with others. Trust, support, and compromise enable us
to learn from each other by embracing diversity as we advance toward our common goals.

Upholding these actions, we bring further merit to the College and the accomplishments of its
As Broad students, our collective and individual actions exemplify professionalism through the
respect and courtesy we show our community a collection of people, property, and ideas.
Continuous Improvement
As future business leaders and members of the Broad community, we have a responsibility to
enhance our knowledge, expand our intellect, grow as people, and advance the College and its
II. Code Violations.
The Honor Code applies to all undergraduate students enrolled in the College or in any course
sponsored by the College. Undergraduate students enrolled in the College are expected to
comply with the Honor Code in all of their endeavors, including participation in course work,
student organizations, internships, co-op programs, research, publications, community service,
and study abroad programs. Conduct that violates any of the Values articulated in the Code,
regardless of where the conduct occurs, will be adjudicated under The Eli Broad College of
Business Grievance Procedure established to hear cases of academic dishonesty and violation
of professional standards. Where appropriate, alleged violations of the Honor Code should be
resolved informally between the student and faculty member.
Conduct violates the Honor Code when it is contrary to one of the Codes Values and impairs,
interferes with, or obstructs the mission, processes, or functions of the Broad program. Such
conduct includes, but is not limited to:
Academic Dishonesty: Academic dishonesty violates the values of integrity, respect, and
continuous improvement. Academic dishonesty may include, but is not limited to:

using another students work on an individual assignment or examination

posting or obtaining examination questions and/or answers on or from the Internet or another
electronic resource
using or attempting to use unauthorized materials, information, or study aids in any academic
submitting the same paper, or substantially similar papers, to meet the requirements of more
than one course without the consent of all instructors concerned
depriving another student of necessary course materials or sabotaging another students work
providing information prohibited by the instructor to another student on an individual
assignment or examination
plagiarism. Plagiarism includes appropriating another person's ideas or work without giving
him or her credit or using information from the Internet, books, or magazines without citing
the source. If a student is unsure of what may constitute cheating in a specific case, then he or
she should consult the syllabus and/or course instructor.

Failure to report an Honor Code violation is considered a violation of the Honor Code. Any
Broad student, staff or faculty member with knowledge of a violation has the responsibility to
report the incident to the instructor or to the Associate Dean for Undergraduate Programs, where
To access your MyAccountingLab online course for the first time, you need to register and log
in. Whenever you want to use MyAccountingLab after that, you just need to log in.
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Introduction and Cost Concepts

Job Costing
Job Costing
Process Costing
Process Costing
Spoilage, Rework and Scrap
Activity-Based Costing
Activity-Based Costing
Allocating Support Department Costs
Allocating Common Costs and Revenues
Allocating Joint Costs
Midterm Exam: Chapters 1,2,4,17,18,5,15,16
Cost-Volume-Profit Analysis
Cost Behavior Estimation
Last day to drop course with no grade reported
Cost Behavior Estimation
Relevant Accounting Information for Decisions
Relevant Accounting Information for Decisions
Master Budget
Flexible Budgets and Direct Cost Variances
Flexible Budgets and Overhead Cost Variances
Midterm Exam: Chapters 3,10,11,6,7,8
Inventory Costing
Capacity Costs
Balanced Scorecard and Strategic Profitability Analysis
Management Control Systems and Transfer Pricing
Management Control Systems and Transfer Pricing
Performance Measurement
Performance Measurement and Compensation
Final Exam: Chapters 9,12,22,23 7:45-9:45AM

1 and 2


Job Costing
Process Costing
Activity-Based Costing

Support Department Cos

10 and Appendix
10 and Appendix
11 and Appendix
6 and Appendix

Cost Estimation
Relevant Information
Resource Allocation

Inventory Costing

Transfer Pricing

Performance Measureme