ma syllabus 08.04.2015

1

Government of the Russian Federation

Saint Petersburg State University

Graduate School of Management

SYLLABUS

Study discipline name

in Russian

Управленческий учет

Study discipline name

in English

Management accounting

Study language(s) English

Workload 6 credits

Working program registration number:

Approval year

code

Faculty or other

structural

department code

Index number or

cipher

/ /

Saint Petersburg – 2015

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Part 1. Characteristics, structure and content of academic studies

1.1. Goals and results of academic studies

Course goals

to develop an appreciation for the role of financial and non-financial information in

managerial decision making, control, and performance evaluation;

to master specific techniques for analyzing and understanding such information;

to appreciate contemporary concerns about creating value for shareholders and other

organizational stakeholders, as well as the implications of those concerns for costing,

control, and performance evaluation systems.

Course results

Understanding of the role of management accounting in finance function of an

organization;

Correct application of basic cost concepts;

Ability to choose a relevant cost allocation approach;

Ability to analyze cost and revenue information for production and marketing decisions;

Knowledge of the principles of budgeting;

Understanding of the basics of strategic performance measurement and control.

1.2. Requirements to a student`s preparedness for mastering the content of academic

studies (prerequisites)

Introductory-level microeconomics; Financial accounting and reporting; Financial analysis

1.3. The list of competences developed (study results)

GC-1 Ability to increase own cultural and intelligence level

GC-2 Ability to use the knowledge of modern science and education discoveries for

solving educational and professional problems

GC-6 Ability to make organizational and managerial decisions and evaluate their

consequences

PC-1 Ability to manage organizations, departments, teams, projects and networks

PC-5 Ability to use quantitative and qualitative methods for scientific research and

managing business processes

PC-8 Ability to prepare analytic materials for managing business processes and

assessment of their efficiency

PC-4.1 Ability to develop the main financial policies of the company: financing, dividend

and risk-management policies.

1.4. Knowledge, skills and acquirements got by a student

Ability to use different cost systems for decision making;

Ability to prepare simple budgets of a company;

Knowledge of the fundamental principles of management control and performance

evaluation

1.5. The list and volume of active and interactive forms of academic studies

Lectures, discussions, individual assignments, group presentation, case studies

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1.6. Academic studies organization

1.6.1. Workload, volumes of academic work and fill rate of students groups (Workload and academic work volumes distribution is shown along with the recommended limits of groups fill rate

in modules and types of academic work in the table)

Module

code

In-class workload, hours Out of class workload, hours

Volu

me

of

Act

ive

and i

nte

ract

ive

acad

emic

cla

sses

form

s

Work

load

Lec

ture

s

Sem

inar

s

Consu

lata

tions

Pra

ctic

al e

xer

cise

s

Lab

exer

cise

s

Tes

ts

Coll

oquia

Curr

ent

contr

ol

Inte

rim

att

esta

tio

n

Under

guid

ance

of

teac

her

Wit

h p

rese

nce

of

teac

her

Usi

ng m

ethodolo

gic

al m

ater

ials

Curr

ent

contr

ol

Inte

rim

att

esta

tion

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Study forms

15 27 2 0 0 0 0 3 2 0 0 101 0 0 29 6

Total: 15 27 2 0 0 0 0 3 2 0 0 101 0 0 29 6

1.6.2. Types, forms and dates of the current academic progress control and interim

attestation. (Types, forms and dates of the current academic progress control and interim attestation are shown in modules

within a discipline and in forms of study)

Code of module within

a discipline

Current control Interim attestation

Types Dates Forms Dates

Full-time study format

Midterm test According to the

course syllabus Final exam

According to the

schedule

In-class

assignments

According to

course syllabus

(almost every class)

Group project According to

course syllabus

1.7. Structure and content of academic studies (Introduced modules are shown along with units, topics, types of studies with a detailed description of the studies

content and academic work volume distribution, and interrelation with provided (subsequent) disciplines

Course topics

Topic 1. Introduction to Management Accounting

Topic 2. Cost Concepts and Behavior

Topic 3. Cost Analysis for Production and Marketing Decisions

Topic 4. Management Control Systems and Budgeting

Topic 5. Performance Measurement and Management

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Plan of classes

Class 1. Topic 1. Introduction to Management Accounting Date: 6.04.2015

Time: 14:45 – 18:00 Room: 205

Key points:

Management accounting as an accounting system;

Management accounting information;

History of management accounting;

Management accounting and a firm’s competitive strategy;

Value creation in organizations;

Cost data for managerial decisions;

Trends in cost accounting throughout the value chain;

Key financial players in the organization;

Cost accounting and other business disciplines.

Learning outcomes. Students should be able to:

Understand the way managers use accounting information to create

value in organizations;

Distinguish between the uses and the users of cost accounting and

financial accounting information;

Explain how cost accounting information is used for decision making

and performance evaluation in organizations;

Identify current trends in cost accounting.

Assignments for class 2:

Reading: Chapter 1 &2 from BSCC, Chapter 1 from D

Reading: Drucker P.F. The Information Executives Truly Need.

Harvard Business Review January-February 1995 (Find at EBSCO)

Project work: To assign yourself to one of the teams

Class 2. Topic 2. Cost Concepts and Behavior (1) Date: 8.04.2015 Time: 13:00 – 16:15

Room: 205

Key points: Cost versus expenses;

Cost allocation: direct vs. indirect costs;

Cost behavior: fixed vs. variable costs;

Unit fixed costs: misleading for decision making;

Types of cost systems;

How costs flow through the statements;

Product costs and period costs;

Gross margin and contribution margin income statements;

Decision-making using fixed and variable costs: break-even

calculation.


Pinpoint the basic concept of “cost”

Explain the process of cost allocation;

Define basic cost behavior, including fixed, variable, semivariable

and step costs;

Understand and how costs are presented in financial statements;

Understand the difference between gross margin and contribution

margin income statements;

Understand the basics of break-even analysis.


Reading: Chapter 3 from BSCC, Chapter 2 from D

Exercises: 3-34, 3-431 from BSCC

Cases/Problems: Alpha and Beta Corp., Greencare Corp.

Project work: Choose and report to instructor topic of your project

1 Here and below numbers of exercises are given according to the 6th edition of BSCC.

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Class 3. Topic 2. Cost Concepts and Behavior (2) Date: 13.04.2015

Time: 14:45 – 18:00 Room: 205

Key points:

Product costing system;

Job costing and process costing;

Operation costing;

Cost estimations;

Cost allocation and product costing;

Cost assignment for indirect costs;

Assigning service departments’ costs to manufacturing departments.


Define and illustrate elements of a product costing system;

Distinguish between job costing, process costing and operation

costing;

Understand how overhead costs is allocated to products;


Reading: Chapters 4, 6, 7 from BSCC, Chapters 3,4,6,7 from D

Reading: Kaplan R. Assigning Support Department Expenses to

Production Cost Centers. Technical note. Harvard Business School. 1996

Exercises: 4-35, 6-35, 7-38 from BSCC;

Project work: Collect literature and ideas on a project

Class 4. Topic 3. Cost Analysis for Production and Marketing Decisions (1) Date: 20.04.2015

Time: 14:45 – 18:00 Room: 205

Key points: Relevant and irrelevant costs and revenues;

Avoidable and unavoidable costs;

Sunk costs; opportunity costs, incremental and marginal costs;

Cost-Volume-Profit analysis;

Operating leverage;

Extensions of CVP model;

Use of differential analysis for production decisions;

Differential costs vs total costs;

Long-term pricing decisions;

Learning outcomes.

Use CVP analysis to analyze decisions;

Understand the effect of cost structure on decisions;

Understand the assumptions and limitations of CVP analysis;

Explain why different cost information is required for different

purposes;

Understanding of cost and revenue relevance for making short-term

decisions;

Understand how to apply differential analysis for pricing decisions.


Reading: Chapters 9 from BSCC, Chapter 9 from D

Exercises: 9-24, 9-33 from BSCC

Project work: Continue working on project

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Class 5. Topic 3. Cost Analysis for Production and Marketing Decisions (2) Date: 22.04.2015

Time: 13:00 – 16:15 Room: 205

Key points: Special order pricing decision;

Deletion of a product decision;

Make-or Buy decisions

Make-or Buy decisions involving differential fixed costs;


Understand of cost and revenue relevance for making short-term

decisions;

Understand how to apply differential analysis for production

decisions;

Explain the fundamentals of a make or buy decision.


Reading: Chapter 11 from BSCC, Chapter 11 from D;

Preparation for the midterm exam.

Class 6. Mid-term exam Date: 27.04.2015

Time: 14:45 – 18:00

Room: 205

The midterm exam will consist of problems that are similar to the problems in

the coursepack/textbook. You will work on the exam within a single 4-hour

period with a 15-minute break. The exam is “open-book”, meaning that any materials from the course can be accessed – including the textbook, cases,

readings, coursepack, slides, handouts and notes. However, all materials

should be in printed form, i.e. you can’t use laptops, mobile phones and

other electronic devices. Only standard calculator is allowed.


Project work:

Continue working on the project

Class 7. Topic 3. Cost Analysis for Production and Marketing Decisions (3) Date: 11.05.2015 Time: 14:45 – 18:00

Room: 205

Key points: Activity-Based Costing;

Cost hierarchies;

Activity-Based Costing in administration;

Using Activity Based Cost management to add value;

Life Cycle costing;

Target and Kaizen costing.


Understand how activity-based costing and a two stage product

system are related;

Compute product costs using activity-based costing;

Apply activity-based costing to marketing and administrative

services;

Compute product life-cycle costs;

Understand the concepts of target and kaizen costing.


Reading: Chapters 5,13 from BSCC, Chapter 13 from D

Reading: Kaplan R. Operational and Strategic Activity-Based

Management. In The Design of Cost Management System. 1999

Exercises: 5-28, 13-38

Cases/Problems: Wilkerson Company

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Class 8. Topic 4. Management Control Systems and Budgeting(1) Date: 13.05.2015

Time: 13:00 – 16:15 Room: 205

Key points:

The nature of management accounting control systems;

Decentralized organizations and management control systems;

Delegating decision authority: responsibility accounting;

Measuring performance;

Evaluating performance;


Understand the role of a management control systems;

Identify the advantages and disadvantages of decentralization;

Describe and explain the basic framework for management control

systems;

Understand the relation between organization structure and

responsibility centers;

Understand how managers evaluate performance;

Understand the potential link between incentives and illegal or

unethical behavior. Assignments for class 9:


Reading: Robert Simons. Control in an Age of Empowerment.

Harvard Business Review March-April 1995

Exercises: 18-28 from BSCC

Project work:

Class 9. Topic 4. Management Control Systems and Budgeting (2) Date: 20.05.2015

Time: 13:00 – 16:15

Room: 205

Key points:

Strategic planning and Competitiveness;

Overall plan;

Developing the Master Budget;

Marketing and Administrative Budget;

Cash Flow Budgets;

Budgeted Balance Sheet;

Budgeting in retail, wholesale and service organizations;

Ethical problems in budgeting.


Understand the role of budgets in overall organization plans;

Estimate sales;

Develop production and cost budgets;

Estimate cash flows;

Develop budgeted financial statements;

Understand why ethical issues arise in budgeting.



Reading: Hope J., Fraser R. Who needs Budgets? Harvard Business

Review, February 2003.


Project work: Teams 1-3 ready to present at class 10.

All teams must submit the presentation (written report) no later than

22.05.2014, 23:59.

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Class 10. Topic 5. Performance Measurement and Management (1) Date: 25.05.2014 Time: 14:45 – 18:00

Room: 205

Key points:

Divisional performance measurement;

Accounting Income;

Return on Investment;

Residual Income measures;

Economic Value Added.


Evaluate divisional accounting income as a performance measure;

Interpret and use return on investment (ROI);

Interpret and use residual income (RI);

Interpret and use economic value added (EVA);

Understanding why historical cost and net book value-based

accounting measures can be misleading in evaluating performance.


Reading: Chapter 19 part 1 from BSCC, Chapter 17 from D

Reading: Kaplan R. and Norton D.P. The Balanced Scorecard –

Measures That Drive Performance. Harvard Business Review, January-

February, 1992.


Project work: Teams 4-6 ready to present at class 11.

Class 11. Topic 5. Performance Measurement and Management (2) Date: 27.05.2014

Time: 13:00 – 17:00

Room: 205

Key points:

Fundamentals of Transfer Pricing Models;

Determining the optimal transfer price and centrally established

transfer price policies;

Multinational transfer pricing;

Segment reporting;

Fundamentals of variance analysis;

Profit variance analysis as a key tool for managers.

Course wrap-up


Explain the basic issues associated with transfer pricing;

Understand the general transfer pricing rules;

Ability to identify the behavioral issues and incentive effects of

negotiated transfer prices, cost-based transfer prices, and market-based transfer prices;

Understand the role of transfer prices in segment reporting;

Understand the use of budgets for performance evaluation;

Develop and use flexible budgets;

Prepare and use a profit variance analysis.

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Part 2. Academic discipline support

2.1. Methodological support

2.1.1. In-class work methodological support

Slides, handouts prepared by the instructor.

2.1.2. Out of class work methodological support

Textbooks, articles that are mentioned in the course syllabus, slides.

2.1.3. Methodology for the control of current academic progress, interim attestation and

assessment criteria

Type of control Instrument of

assessment % of final grade Assessment criteria

Assessment of

academic progress

(during the course) without possibility of

retake*

Tests 20% Accuracy, correctness and completeness of the responses

Project 10%

In-depth analysis of the problem

and the quality of the proposed solutions

Teamwork and participation of all

team members in the project

Presentation skills and answers to questions

Quality of presentation

Assessment of

academic progress (during the course)

with possibility of

retake

Test 20% Accuracy, correctness and

completeness of the responses

Final exam (after the course)

Final exam 50%

Accuracy, correctness and completeness of the responses Use

of cases and correct application of

theories and concepts, taught during the course

Total 100%

*If the professor has set a deadline for the elements of control (tests, projects, etc.), late

submission will not be accepted and there will no possibility for retake.

Current evaluation

The course format implies that students are actively involved in classes, they solve individual

and group exercises and assignments. The final grade depends on the grade received for the

midterm test, in-class assignments and the group project.

In-class assignments

In-class tests (20-30 min.) are conducted every single class (excl. Class 1, 6 and 7) and are

targeted to control students’ success in studying the material covered on the previous class. They

consist of numerical problems and theoretical questions. Moreover, if the assignment for a

particular class requires some reading (an article or a case), the questions on this reading material

can be included in the test of that class.

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Midterm exam

The midterm test consists of several numeric problems. The test is conducted in open-book

format. Test duration – 4 academic hours. The midterm exam will consist of problems that are

similar to the problems in the coursepack/textbook and theoretical questions. You will work on

the exam within a single 4-hour period with a 15-minute break. The exam is “open-book”,

meaning that any materials from the course can be accessed – including the textbook, cases,

readings, coursepack, slides, handouts and notes. However, all materials should be in printed

form, i.e. you can’t use laptops, mobile phones and other electronic devices. Only standard

calculator is allowed.

Group project

The goal of the project is to look at emerging topics / issues in management accounting, both

problem-based and industry/country-based. Students will have to review a topic/issue both from

theoretical and practical part, i.e. they would better off if they find examples of practical

implementation of a particular concept.

The project is done in a group of four students.

Students are encouraged to offer topics of their choice for consideration by instructor.

The project will be graded according to the extent to which the students have:

developed and delimited an original formulation of the problem investigated,

critically explored and applied relevant theories and analytical approaches to the problem

investigated,

processed valid data, relevant to the problem, and

produced a well-structured presentation (10 minutes) and short report (up to 2000 words),

written with clear arguments, easy to understand.

Use of non-financial measures in performance evaluation.

Rolling budgets

Activity-based budgeting

Management accounting in service companies

Earnings management in getting performance targets

Management accounting for intangible assets

Strategic cost analysis and capacity decisions

“Beyond budgeting”

Kaizen cost management

The presentations will take place on Classes 10-11. All teams must submit the presentation

(written report) no later than 22.05.2015, 23:59. Presentations (in ppt format) must be submitted

on the day of presentation.

Final test Test format – written in-class closed-book test. Final test consists of theoretical questions and

exercises. Test duration – 90 min. During the test the students are allowed to use standard

calculators.

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Examples of final test exercises

Answer the following questions:

1. What are the main differences between traditional costing systems and activity-based costing?

2. In what industries is process costing often used? Why?

3. What are the main differences between financial and managerial accounting?

Complete the following exercise:

Mrs. Johnson has taken out a lease on a shop for a down payment of $6,000. Additionally, the rent under

the lease amounts to $5,000 per annum. If the lease is cancelled, the initial payment of $6,000 is forfeit.

Mrs. Johnson plans to use the shop for the sale of clothing and has estimated operations for the next

twelve months as follows:

Net sales $100,000

Cost of goods sold 50,000

Wages and wage related costs 12,000

Rent including the down payment 11,000

Rent, heating, lightning and insurance 13,000

Audit, legal and general expenses 2,000

She is undecided whether to continue with her plans, because she knows that she can sublet the

shop to a friend for a monthly rent of $550 if she doesn’t use the shop herself.

TASK. 1. Identify what is a sunk cost and opportunity cost in this example.

2. State the decision Mrs Johnson should make according to the information given supporting

you conclusion with a financial statement (calculate profit before taxes).

2.1.4. Methodological materials for the current academic progress control and interim

attestation (monitoring and test materials)

Textbooks, articles that are mentioned in the course syllabus, slides.

2.2. Staff acquisition

2.2.1. Requirements for the education level and (or) qualification of regular lecturers and

other people allowed to teach a discipline.

For the course teachers should be involved with the candidate or doctor degree (including the

degree of PhD, past the established procedure for recognition and equivalence).

2.2.2. Requirements for the availability of auxiliary educational and (or) other staff

Teaching-support and engineering staff should have a relevant degree and possess the skills to

work with MS Office 2010.

2.2.3. Methodological materials for the assessment of the study process content and quality

by students

Feedback Questionnaire for the course

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2.3. Material and technical support

2.3.1. Requirements for auditoria (rooms, seats)

Classroom must be equipped with multi-media projector and document-camera

2.3.2. Requirements for auditorium equipment including general computer equipment and

public domain software

Working places of lecturer and students should be equipped with the hardware at least of

Penitum IV level.

2.3.3. Requirements for specialized equipment

No requirements

2.3.4. Requirements for application software

No requirements

2.3.5. Requirements for the list and volume of consumable materials

Colored pens, sponges, paper A4, stationery at the request of teachers, filed in a timely manner.

2.4. Information support

2.4.1. Compulsory literature list

Textbooks

1. Blocher E.J., Stout D.E., Cokins G., Chen K.H. Cost Management: a strategic emphasis.

4th, 5

th or 6

th ed. McGraw-Hill/Irwin, 2008, 2010 or 2013.

2. Drury C. Cost and management accounting: an introduction. 6th or 7th ed. Thomson

learning, 2006 or 2011.

Articles

1. Drucker P.F. The Information Executives Truly Need. Harvard Business Review January-

February 1995

2. Kaplan R. Assigning Support Department Expenses to Production Cost Centers.

Technical note. Harvard Business School. 1996.

3. Kaplan R. Operational and Strategic Activity-Based Management. In The Design of Cost

Management System. 1999.

4. Simons R., Control in an Age of Empowerment. Harvard Business Review March-April

1995

5. Hope J., Fraser R. Who needs Budgets? Harvard Business Review, February 2003.

6. Kaplan R. and Norton D.P. The Balanced Scorecard – Measures That Drive Performance.

Harvard Business Review, January-February, 1992.

2.4.2. Supplementary literature list

1. Cooper, Robin, and Robert S. Kaplan. Design of Cost Management Systems. 2/E Prentice

Hall, 1999.

2. Kaplan, Robert S., and David P. Norton. Strategy Maps: Converting Intangible Assets

into Tangible Outcomes. Harvard Business School Publishing, 2004.

3. Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young.

Management Accounting: Information for Decision-Making and Strategy Execution, 6/E,

Prentice Hall, 2011.

4. Lanen, William, Anderson, Shannon and Maher, Michael Fundamentals of Cost

Accounting, 3/E McGraw Hill/Irwin, 2010

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5. C.T. Horngren et al., Introduction to Management Accounting, 14th edition

Pearson/Prentice Hall, 2008

2.4.3. Other information sources list

Slides and other materials placed on Blackboard.

Developer (s) of the discipline working program

Name Degree Position Contact information

Egor D. Nikulin

Candidate

degree in

economics

Senior lecturer

of the

Department of

Finance and

Accounting

[email protected]

Consultations:

Wednesdays, 16:30-18:00,

room 209.

ma syllabus 08.04.2015

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