Revised: 01/12/2010

INTI INTERNATIONAL UNIVERSITY

COURSE STRUCTURE COURSE: ACC 304 COST AND ACTIVITY MANAGEMENT (3 cr)

PREREQUSITE(S): None COURSE DESCRIPTION: This module builds on the knowledge and skills contained within previous study to deepen the student's critical and practical understanding of the developing role of cost accounting in assessing organisational performance. The module starts by taking a practical approach to the use of both absorption costing and marginal costing techniques, assessing the effectiveness of each technique to meet the needs of managers within the organisation. The use of standard costing to assess the performance of management against predetermined standards is considered, including the use of this technique to develop recommendations to maximise operational efficiency and the minimisation of the waste of resources. The behavioural aspects of standard costing are also considered. The module continues by considering the impact resulting from the development of new approaches, such as just-in-time management, activity-based costing and MRP and ERP systems. The issues are considered within the context of manufacturing organisations, service-sector organisations, public-sector organisations and not-for-profit organizations. LEARNING OBJECTIVES: The aims of this course are to enable students to: 1. understand the use of absorption accounting and marginal accounting techniques to assist management within organisations; 2. understand the development of the use of standard costing methods to assess organisational efficiency and secure reductions in the waste of resources; 3. understand the development of new systems and techniques to assist the internal financial 4. management and control of organisations. LEARNING OUTCOMES: Successful students will be able to: 1. calculate operating variances; 2. prepare marginal and absorption costing information; 3. evaluate and apply appropriate methods for planning , control and performance measurement. COURSE FORMAT: * 2 Semesters System: Total Student Learning Time (SLT) (L = Lecture; T = Tutorial; P = Practical; O = Others) : Face to Face Guided & Independent Learning (hr) Total Student Learning Time (hr) L T P O 36 18 0 4 102 160

* 2.5 Semesters System: Total Student Learning Time (SLT) (L = Lecture; T = Tutorial; P = Practical; O = Others) : Face to Face Guided & Independent Learning (hr) Total Student Learning Time (hr) L T P O 42 12 0 4 102 160

BATUH: ACC304 COST AND ACTIVITY MANAGEMENT

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Revised: 01/12/2010

STUDENT EVALUATION: Coursework: 40% Final examination: 60% The coursework consists of an individual assignment and in class test. FINAL EXAMINATION FORMAT: Duration: 2 hours Students are required to answer all FOUR questions. GRADING SCALE: A1 (77 100), A2 (73 76), A3 (70 72), B1 (67 69), B2 (63 66), B3 (60 - 62), C1 (57 - 59), C2 (53 - 56), C3 (50 - 52), D1 (47 - 49), D2 (43 - 46), D3 (40 - 42), F (0-39) Referral Pass (40-100), Referral Fail (0-39) Note: A student is deemed to have passed the module if the student obtained 40% or better in both the final examination component and the coursework component for the module. BASIC TEXT(S): 1. Drury, Management and Cost Accounting, 7th ed., London, Thomson Publishing, 2008. REFERENCES: 1. Lucey, T., Costing, 6th ed., London, Continuum, 2002. 2. Brewer, Garrison, Noreen., Introduction to Managerial Accounting, 3rd ed., Mc Graw Hill, 2007. CLASS SYLLABUS: Lecture(s) Topics 1 -4 Distinction between management accounting and financial accounting. Reports or information required by the management including management information system and expectations by the management from the management accountant. Cost center, cost unit, responsibility center, profit center and investment center. Methods of costing, Types of cost and elements of cost. Classification of cost on the basis of behaviour, elements and function. Statement of cost or cost sheet. 5- 10 Marginal Costing Principles of Marginal costing, Marginal cost together with behaviour of the cost. Absorption costing and marginal costing a comparative analysis. Advantages and limitation of marginal costing. Marginal cost equation profit volume rates, Key factors Break even point Break even chart Different types Break even charts limitations. 11-19 Decision Making Process Relevant cost and revenues; limited resources, ;pricing and profitability analysis; the effect of risk and uncertainty in decision making process. 2022 Activity Based Costing Computation of overheads using traditional and activity based costing. Benefits and limitations of activity based costing activity. Identifying the needs of activity based costing. 23-26 Standard Costing Need for standard cost, Definition of standard cost. Standard costing and Budgetary Control. Control through variance analysis. Reasons for variance. Direct Material Variances, Direct Labour Variances. Overhead variance Variable and fixed sales variance. Reconciliation of budgeted and actual profit Flexible control with standard costing. 27-28 Development of New Approaches Just in time management, Economic resource planning and material resource planning Final Examination

BATUH: ACC304 COST AND ACTIVITY MANAGEMENT

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