DE LA SALLE UNIVERSITY

Accountancy Department
College of Business and Economics
COURSE SYLLABUS

COURSE CODE : MODMAN1 (3 units)

COURSE TITLE : Principles of Managerial Accounting
PREREQUISITES : Module 2 and FINMA2A/ACOFIN2
PREREQUISITE TO : Module 4
TYPE OF COURSE : Major Subject
FACULTY : Ms. Nancy O. Chua
TERM/TIME/ROOM : 3rd Term/ 1300-1750/L302

I. COURSE DESCRIPTION:

This course is the first of a series of courses in the study of Management Advisory Services.
The course deals mainly with topics that relate to the foundation of management accounting and
its operational aspects. It is designed to use the case study method, the next best alternative to
simulate application of concepts in an actual business scenario. The course is geared towards
providing the students with an exposure to business consulting either as an internal or external
management accountant or consultant.

II. OBJECTIVES / VALUES:

At the end of the course, the students should be able to do the following:

1. Cognitive (Knowledge):

a. define Management Advisory Services and its basic considerations;

b. define management accounting and describe its scope, objectives, activities, operation
processes and organizational aspect;
c. identify the major differences between management accounting and financial
accounting, and describe how cost accounting is relevant to management accounting;
d. describe the steps in the decision-making process and the managerial accountant’s role
in that process;
e. define the different types of responsibility centers and explain the role of responsibility
accounting in fostering goal congruence;
f. develop analytical skills and acquire deeper understanding of management concepts
through the use of the case study method.

2. Cognitive (Skills):

a. prepare analyses of various special, non-routine decisions, properly identifying the

relevant costs and benefits;
b. analyze costs for pricing decisions, set prices using the cost-plus pricing and ROI
methods, and discuss the issues involved in strategic pricing of new products;
c. evaluate an investment proposal using the different capital budgeting techniques;
d. conduct a presentation of the business cases, problems, and the course’s final paper.

3. Affective/Value Aims:

The student should be aware of the ethical standards of the Accounting profession,
namely:
a. Professional Ethics

- Integrity
- Objectivity and Independence
- Professional competence and due care
- Confidentiality
- Professional behavior

b. Moral Values – Ability to discern between what is morally right or wrong

III. COURSE OUTLINE:
TOPIC REFERENCES
I. Overview of the MS Practice by the CPA (assigned readings) Cabrera,
A. Nature, scope, and evolution of MS Management
B. Areas of MS Consultancy,
C. MS Practice Standards (General & Technical) Ch. 1 to 8
D. Ethical Considerations in MS Practice

II. Management Accounting Horngren,

A. Objectives of Managerial Accounting Activity Ch. 1
B. Role in an Organization
C. Differences between Financial and Management Accounting.
D. Controllership vs. Treasurership

III. Cost Concepts, Classifications, Estimation: A Review Horngren,

A. Definition Ch. 2 & 3
B. Classifications of Costs
C. According to Nature
D. According to Variability or Cost Behavior
E. According to Type of Inventory
F. According to Traceability to Cost Objective
G. According to Managerial Influence
H. According to GAAP
I. For Planning and Control
J. According to Accounting Period Benefited
K. According to Time Period for which Cost is incurred
L. For Analysis and Decision-Making
M. Cost Estimation/Segregation Techniques
1. Account Classification
2. Visual Fit or Scatter Graph
3. High-Low Method
4. Least-Squares Regression Method
5. Others

IV. Decision-Making: Relevant Costs and Benefits Horngren,

A. The Managerial Accountant’s Role in Decision Making Ch. 5 & 6
B. Relevant Costs and Benefits
C. Analysis of Special Decisions
1. Special Orders
2. Outsourcing
3. Elimination of Product Line/Segment
4. Sell as is or Process Further
5. Shutdown or Continue
6. Utilization of Constrained Resources
7. Cost Analysis for Pricing Decisions
a. Cost-Plus Pricing
b. Return on Investment Method
c. Strategic Pricing of New Products
d. Target Costing
e. Time and Material Pricing
f. Competitive Bidding

V. Capital Budgeting Decisions Horngren,

A. Definition Ch. 11
B. Characteristics of a Capital Budgeting Decision
C. Categories of Capital Investments
1. Independent Projects or Screening Decisions
2. Mutually Exclusive Projects or Preference Decisions
D. Elements of Capital Budgeting
1. Net Investment
2. Operating Cash Flows After Tax
3. Minimum Acceptable Rate of Return/Cost of Capital
 E. Capital Budgeting Techniques
1. Non-discounted Cash Flow Methods
a. Payback Period
b. Payback Reciprocal
c. Bailout Payback
d. Accounting Rate of Return
2. Discounted Cash Flow Methods
a. Time Value of Money Concept
b. Net Present Value
c. Annualized Net Present Value
d. Profitability Index
e. Discounted Payback
f. Internal Rate of Return
F. Capital Rationing
1. IRR Approach
2. NPV Approach
G. Risk in Capital Budgeting
1. Breakeven Cash Inflow
2. Sensitivity and Scenario Analysis
3. Simulation
4. Risk-Adjusted Discount Rates

VI. Responsibility Accounting & Decentralization Horngren,

A. Responsibility Centers Ch. 9 & 10
B. Performance Reports
C. Segmented Reporting
D. Measuring Performance in Investment Centers
1. Return on Investment
2. Residual Income
3. Economic Value Added
E. Transfer Pricing
1. Goal-Congruence
2. General Transfer-Pricing Rule
3. Transfers Based on External Market Price
4. Negotiated Transfer Prices
5. Cost-Based Transfer Prices

IV. TEACHING METHODOLOGIES:

Lectures, audio-visuals, reading assignments, problem solving, and case
studies/discussion and presentation

V. COURSE REQUIREMENTS:
1. Three long exams and one comprehensive/final exam
2. Problems and exercises
3. Group paper and presentation
VI. ASSESSMENT / EVALUATION:
BASIS Percentage
Long Examinations 50%
Comprehensive Examination 25%
Final Paper and Presentation 15%
Class Standing (consists of recitation, homework, seatwork,
professional conduct) 10%
Total 100%

GRADE POINT DESCRIPTION PERCENTAGE

4.0 Excellent 97 - 100
3.5 Superior 94 - 96
3.0 Very Good 91 - 93
2.5 Good 87 - 90
2.0 Satisfactory 83 - 86
1.5 Fair 77 - 82
1.0 Pass 70 - 76
0.0 Fail below 70

BSA grade requirement - at least 2.0

VII. REQUIRED TEXT AND REFERENCE MATERIALS:

Required Text:

Horngren/Sundem/Stratton/Burgstahler/Schatzberg, 14th (2008) Edition. Introduction to

Management Accounting. Pearson Education, Inc.

References:

1. Atkinson/Kaplan/Young, 4th (2004) Edition.Management Accounting. Pearson

Education, Inc.
2. Cabrera, Elenita B., 2005 Edition. Management Accounting - Concepts and
Applications Vol. I and Vol. II. GIC Enterprises & Co., Inc.
3. Cabrera, Elenita B., 2006 Edition. Management Consultancy – Principles and
Engagements. GIC Enterprises & Co., Inc.
4. Garrison/Noreen/Brewer, 11th (2006) Edition. Managerial Accounting. McGraw-Hill.
5. Hansen and Mowen, 7th (2006) Edition, Management Accounting. South-Western
Publishing
6. Hilton, Ronald W, 7th (2008) Edition. Managerial Accounting: Creating Value in a
Dynamic Business Environment. McGraw-Hill
7. Horngren/Datar/Foster, 12th (2006) Edition. Cost Accounting: A Managerial
Emphasis. Pearson Education, Inc.
8. Roque, Rodelio S. 2005. Reviewer in Management Advisory Services. Roque Press,
Inc.
9. Young, S. Mark. 4th (2004) Edition. Readings in Management Accounting. Prentice
Hall Inc.
10. Actual AICPA/Philippine CPA Board Examinations in Management Advisory
Services.
11. CPA Reviewers in Management Advisory Services

Prepared/Approved by:
noc/MAS Committee
Dec. 2007