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INTERNATIONAL ISLAMIC UNIVERSITY MALAYSIA

COURSE OUTLINE

Kulliyyah / Institute Economics & Management Sciences

Department / Centre Accounting

Programme ENM

Name of Course / Mode Management Accounting Fundamentals

Course Code ACC 1511

Name (s) of Academic staff /


Instructor(s)

Rationale for the inclusion of This course is a foundation course for management accounting,
the course / module in the one of the key areas in accounting. It also provides a good and
programme strong foundation for business and economics.

Semester and Year Offered Semesters I, II & III

Status Core

Level 1

Proposed Start Date Semester I, 2007/2008


Batch of Student to be
Intake of 2007/2008 onwards
Affected

Face to Face
Assessments
Lecture

Total Guided and Independent


Total Student Learning Time Learning
(SLT)
Total Guided = 52.5
42 10.5 Total Independent Learning = 77.5
Total hours = 130

Credit Value (hours) 3


Pre-requisites (if any) ACC 1001 Financial Accounting Fundamentals
Co-requisites (if any) Nil
The objectives of this course are to:

1. To comprehend the basic concepts of costs and appreciate the


different classification of costs for various purposes;
Course Objectives 2. To understand the various management tools in making
informed decisions;
3. To appreciate the contribution made by information
technology to management accounting.

On completion of this course, students should be able to:

1. Define managerial accounting and describe its role in a


commercial environment
2. Discuss the major differences between managerial and
financial accounting;
3. Describe the various cost classifications to analyse cost within
the business organization and to explain the relationship
between cost behavior, cost estimation and cost prediction;
Learning Outcomes 4. Compare and contrast variable/marginal costing;
5. Describe the basic concept of CVP analysis and its application
in business decision making;
6. Prepare functional budgets, income statements, balance sheet
and a cash budgets;
7. Demonstrate and apply the concept of relevant cost and
benefit in special order, outsourcing, add/drop product
line/segment and limiting factors decision.
8. Compute prices using cost plus pricing, target costing, and
time and material pricing.

How they are Assessment


Skills
developed method
Team work Groups formation Group Exercise
Transferable Skills: Critical
Groups Formation Group Exercise
Thinking
IT skills Groups Formation IT Assignment

Type of Assessment Description


Teaching-Learning / Oral reports and judge colleagues
Lecture
assessment strategy works
Group assignments, report and
Assignments
presentation and IT software
assignments
Quiz 5 quizzes

This course is designed to equip students with the analytical tools


required to understand the underlying cost concepts, management
planning and decision making. The course focuses on the
management accounting methods and techniques that help
Course Synopsis
managers make more informed decisions in analyzing cost,
volume and profit relationship, budgeting practices and its
process, pricing and other short term decision making issues.

Mode of Delivery Lecture, Discussion

LO Method %
1-7 Quiz 10
3-7 Group Exercise 15
Assessment Methods and 1-4 Mid-Term Test 20
Type/Course Assessement 5 IT Assignment 5
State weightage of each type of
assessment. 1- 7 Final Examination 50
TOTAL 100

Mapping of course / module to the Programme Learning Outcomes


Programme Outcomes
Learning Outcome of the course 01 02 03 04 05 06 07 08 09

Define managerial accounting and describe its role √ √ √ √ √ √ √ √


1. in a commercial environment

Discuss the major differences between managerial √ √ √ √


2.
and financial accounting
Describe the various cost classifications to analyze
cost within the business organization and to explain √ √ √ √ √ √
3. the relationship between cost behavior, cost
estimation and cost prediction

√ √ √ √ √
4. Compare and contrast variable/marginal costing
Describe the basic concept of CVP analysis and its √ √ √ √ √ √
5. application in business decision making

Prepare functional budgets, income statements, √ √ √ √ √ √ √ √


6. balance sheet and a cash budgets

Demonstrate and apply the concept of relevant cost


and benefit in special order, outsourcing, add/drop
√ √ √ √ √ √ √ √
7. product line/segment and limiting factors decision.
explain the relationship between cost behaviour,
cost estimation and cost prediction

Compute prices using cost plus pricing, target √ √ √ √


8.
costing, and time and material pricing

Content outline of the course / module and the SLT per topic
Learning Task/Reading
Weeks Topics
Hours (author/page)
1 Introduction
 The role of management and the need for 9 Hilton-
managerial accounting information Chapter 1
 Managerial vs Financial accounting
 Managerial accounting in different types of
organizations
Cost Behaviour And Estimation
2  Basic cost management concepts 9 Hilton-
 Costs classification Chapter 2
 Cost behaviour patterns
 Using costs behaviour patterns to predict costs
 Cost estimation

3,4 Absorption And Marginal /Variable Costing


 Theory of absorption costing and variable 18 Hilton-
costing Chapter 8
 External and internal reporting
 Absorption costing vs variable costing and its Quiz#1 on C1
impact on profit & C2
(29-30/12/11)
5,6&7 Cost-Volume-Profit Analysis
 The basics of CVP analysis 25 Hilton-
 Break even analysis Chapter 7
 Target profit analysis
 Applying CVP analysis (safety margin, change in Quiz#2 &
fixed expenses, change in the unit contribution Group
margin) Exercise#1 on
 CVP analysis with multiple products C3
 Cost structure and operating leverage (10–11/01/11)
 Assumptions underlying CVP analysis

28/01/11 MID-TERM EXAMINATION Coverage:


Friday: 3:00 – 5.00 pm. until C4

31/01/11 - MID-TERM BREAK


06/02/11
9, 10&11 Profit Planning – Budget
 Purposes of budgeting systems 27 Hilton-
 The master budget (sales budget, production Chapter 9
budget, direct material budget, direct labour
budget, manufacturing overhead budget, Quiz#3 &
budgeted schedule of cost of goods manufactured Group
and sold, budgeted income statement, budgeted Exercise#2 on
balance sheet) C4
(14-15/02/11)
Profit Planning & IT
 The introduction of flexible budgets and
performance report Hilton-
 The introduction of capital budgeting Chapter 11 &
 IT and budgeting (preparing budget using 16
computer)

12&13 Decision Making – Relevant Costs And Benefits


 Steps in decision making process 18 Hilton-
 Quantitative vs qualitative analysis Chapter 14
 Relevant costs and benefits
 Analysis of special decisions Quiz #4 &
¯ accept or reject special offer Group
¯ outsource a product or service Exercise#3 on
¯ adding or dropping product lines and other C5
segments (02-03/03/11)
¯ utilization of a constrained resource
 The Islamic perspectives on decision making
14&15 Cost Analysis For Pricing Decisions
 Major influences on pricing decisions 18 Hilton-
 Economic profit-maximizing pricing Chapter 15
 Cost plus pricing
¯ Absorption-cost pricing formula Quiz#5 &
¯ Variable cost pricing formula Group
 Strategic pricing of new products Exercise#4 on
 Target costing C6
 Pricing for service industry: Time and material (14-15/13/11)
pricing
 Competitive bidding

15 Islam and Management Accounting 6 PowerPoint

Required references supporting the course


1. Hilton, R.W. (2009). Managerial Accounting: Creating Value in a Dynamic Business
Environment. (8th Ed). New York: McGraw-Hill.
2. Sulaiman, M. and Nik Ahmad, N.N. (2008).Management Accounting Fundamentals Questions
(for internal circulation only).

Recommended references supporting the course

1. Brewer, P.C., Garisson, R.H., & Noreen, E.W. (2008). Introduction to Managerial Accounting.
(4th ed.). New York: McGraw-Hill.
2. Horngren, C.T. et al. (2009). Cost Accounting: A Managerial Emphasis. (13th ed.). New Jersey:
Pearson Education.
3. Horngren, C.T. et al. (2008). Introduction to Management Accounting. (14th ed.). New Jersey:
Pearson Education.

Prepared by: Checked by: Approved by:

_______________________ _______________________ _______________________


Name Name Name
Assistant Professor Head Dean
At the end of the programme, students are able to:
1. Identify, classify, record, summarize and report economic events which affect organizations. Define and explain basic concepts
in financial and managerial accounting as well as taxation, finance and audit, whilst incorporating the Islamic perspective
Knowledge
where relevant.

2. Prepare financial statements in accordance with nationally and internationally accepted financial reporting standards for
organizations and groups of organizations. Perform simple and complex audits, apply essential finance concept, prepare tax
Practical Skills
returns and advise on tax matters in compliance with regulation and standards.

3. Provide services to the community based on learned knowledge, and cooperate with different stakeholders for the benefit of
Social skills and
the society (ummah).
Responsibilities

4. Behave in accordance with professional ethics and Islamic values. Value, Attitudes and
Professionalism
5. Communicate effectively with various stakeholders, whether verbally or in written form. Communication
6. Process and evaluate financial data and non-financial information, as well as suggest solutions to accounting issues taking into
Problem Solving and
consideration professional ethics and Islamic values.
Scientific Skills

7. Use, evaluate and manage information technologies and systems for the efficient attainment of organizational objectives; and Information Management
demonstrate an ability to learn continuously and develop professionally in tandem with the changes in the business world. and Lifelong Learning
Skills
8. Analyze financial and non-financial information to make optimal managerial decisions, which are ethical, at the operational,
Managerial and
tactical and strategic levels.
Entrepreneurial Skills

9. Work collaboratively in a management team as well as demonstrate leadership qualities. Leadership and Team
Skills