MBA 507 – Management Accounting – Course Outline

Focus: Accounting Processes, Principles, and Evaluation

Instructor
Dr. James Tong
Email : jywtong@hotmail.com
Course Description

This course investigates the use of accounting information in the decisions made by
management during the process of planning and controlling. It includes systems that measure
the cost and profitability of products and services, implications of change in investment, cost
reduction strategies, and financial reporting guidelines, both formal and informal
requirements, and their effect on managerial judgment. In particular, the focus will be on
internal control mechanisms and how they are used in leading an organization or department.
This will include the implication of changes in accounting policy on investing, operating and
financing choices.

Managers and leaders need financial professionals who know how to communicate not only
what a company spent but also how it consumed that spending and where it provided value
and alignment to its strategy. As a leader, you need to understand what and how your
financial staff work on their objectives and what is possible. Financial skills are needed to
allow us to focus on the future as well as the past, with a common theme of creating value.
Whether an enterprise intends to earn money for owners and shareholders or is a not-for-
profit organization, the goal is the same – creating value. For example, one company may be
improving workforce conditions while another may be investing in new product
development. Regardless, whatever the strategy, this course explains in detail how to use
measurement and management systems for value creation.
Course Rationale

Management accounting is focused on the internal generation, communication and

interpretation of information for both operational and strategic decision-making purposes.
This course introduces management accounting by developing your ability to prepare but
more importantly for your career to critically interpret accounting information that supports
management decisions. The focus is on your ability to interpret the accounting information.

This course reflects the following underlying principles:

1. In contrast to financial accounting, there are no rules (i.e. GAAP) to comply with when
reporting management accounting information for internal management purposes.

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2. The choice of what management accounting information to prepare is driven by the
decision situation.

3. Any individual involved with an organization can benefit from understanding the
fundamentals of management accounting.

Course Objectives

• Critically evaluate the nature, purpose and importance of different types of decision-
relevant management accounting information.
• Critically evaluate fundamental quantitative techniques used to generate decision-
relevant managerial accounting information.
• Make sound strategic and operational business decisions based on the development and
evaluation of supporting management accounting information.
• Critically evaluate the important theories that explain the practice of management
accounting that is observed in Canada.
• Critically evaluate ethical issues involving management accounting.

Teaching Approach
The above course objectives will be accomplished through:
• Lectures based on relevant accounting theory.
• Classroom group discussions and presentations.
• Completion of in-class learning activities in small groups.
• Completion of assignments.
• Use of relevant business cases and/or current business stories as reported to illustrate
management accounting issues..

Participation is required in threaded discussions and students are expected to read the topic
coverage indicated in the course outline prior to the discussion.
Course Materials
It is suggested that each student complete reading of the assigned textbook:
Jerold L. Zimmerman. Accounting for Decision Making & Control. Sixth Edition. McGraw
Hill Ryerson, 2008. You can access the electronic copy of the textbook available from the
publisher on subscription basis.
Other resources and materials will be obtained through local newsprint and searching the
web.

Course Evaluation

Percent of Criteria
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 Grade

45% Three Case Study Analyses (10% each) and one team case study worth 15%

15% Current Events Assignment – due at the end of Week 7

25% Homework Practice assignments

15% Contribution to Class Discussions – this grade will be assigned for the quality
of your participation as well as your ability to keep up-to-date and current with
the assigned discussions. For each class, you are to prepare your response to
the assigned discussion question(s). This response is to be a composite of your
experience, your readings, and the course material and your research into the
topic. Students will be selected at random to present to the class their prepared
response. For those students not selected, you will hand-in your notes to the
professor to prove completion of the assigned task.

Grading

Grades and Grade Points

Descriptor Percentage Letter Numeric

Grade Value

Excellent 90% - 100% A+ 4.33

85% - 89% A 4.00

80% - 84% A- 3.67

Good 75% - 79% B+ 3.33

70% - 74% B 3.00

65% - 69% B- 2.75

Satisfactory 60% - 64% C+ 2.33

55% - 59% C 2.00

Marginal 50% - 54% D 1.00

Pass

Failure 0% - 49% F 0.00

N* 0.00

IP** 0.00

* Did not complete course requirements (Equivalent to F)

** In Progress
Course Outline
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 Week Topics Homework Case Study and other
assignments and Discussion
Questions

1 Introduction Chapter 1 Introductions

The Nature of Costs Chapter 2 Discussion Question 1
Opportunity Cost of Capital and Chapter 3 Practice Assignment 1
Capital Budgeting

2 Organizational Architecture Chapter 4 Case Study #1

Responsibility Accounting and Discussion Question 2
Transfer Pricing
Chapter 5 Practice Assignment 2

3 Budgets and Budgeting Chapter 6 Discussion Question 3

Practice Assignment 3

4 Cost Allocation: Theory Chapter 7 Case Study #2

Cost Allocation: Practices Chapter 8 Discussion Question 4
Practice Assignment 4

5 Absorption Cost Systems Chapter 9 Discussion Question 5

Practice Assignment 5

6 Criticisms of Absorption Cost Chapter 10 Case Study #3

Systems: Incentive to
Overproduce Discussion Question 6

Criticisms of Absorption Cost Chapter 11 Practice Assignment 6

Systems: Inaccurate Product
Costs

7 Standard Costs: Direct Labor Chapter 12 Discussion Question 7

and Materials
Chapter 13 Practice Assignment 8
Overhead and Marketing
Variances

8 Management Accounting in a Chapter 14 Team Case Study

Changing Environment

Your role as a student is to be an active learner. Active participation is a critical component

of the online learning process. As an active learner, you seek out the information you need to
appropriately address the issues. My role as instructor is to guide, focus and critique your
learning experience. In the discussion group, my role is to lead and monitor the discussions

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as well as to intervene from time to time, if necessary, to provide feedback and keep the
discussion on track.

This is a tentative schedule and course plan indicating assigned readings. You are expected
to have completed the readings, practice and any preparation activities prior to the scheduled
topic being discussed. The schedule indicates the readings in the textbook that should be
completed prior to the coverage of the specified topics. As the schedule for the eight-week
period surrounding this course is going to be very full, it is recommended that you read the
assigned readings and complete the practice scheduled for any given week prior to the
discussion week. Text readings and online modules are only considered your starting point in
the course. Students are expected to research additional information for each module
covered.

Course Assignments and Grading

Case Studies (weight 45%)

There are four case studies you will be required to complete during the course. Three will be
marked individually, while the fourth case study will be submitted as a team case study. A
formal case study analysis format is required for your responses. Each case study analysis
should be double spaced and no longer than 5 pages excluding appendixes. It is your
responsibility to determine what information provided in the case is relevant to the problem
and to devise a solution based on the facts, your assumptions, alternatives and your analysis.
Each case study must include the following sections:

1. Problem statement - one or two sentences to state what are the elements of the problem.
2. Background - give appropriate background information relevant to the analysis (i.e.
objectives, environment or marketing analysis, technology or competitive
environments, etc.).
3. Alternatives - provided at least three alternatives to solve the problem.
4. Analysis of Alternatives - build arguments to accept or reject the alternatives - provide
“pros” and “cons” of each alternative.
5. Recommendation - select one alternative to recommend to management and support
that alternative.
6. Action Plan - provide an action plan short and long-term to put your recommendation
into place, including the reduction/elimination of the “cons” noted in your analysis.
Current Events Project (weight 15%)

This assignment requires you to critically review six current events related to management
accounting and the content of this course. For each current event, you are expected to:

1. Briefly summarize the chosen current event.

2. Explain how you think the current event illustrates the concept(s) that the course
is covering. This section should reference specific course material.

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3. Present your personal opinion about what this current event means in relation to
managing the financial and business operations, ethics, and the people in the
organization.

You are to include a final concluding section in which you tie the articles together and draw
more general conclusions and observations about management accounting and how it relates
to managing a business.

You may use print sources (e.g. Local newspapers, Globe and Mail, or other newspapers,
weekly magazines (e.g. McLean, Time, Economist, etc.), online sources (websites for any
newspaper, http://www.cica.ca/ or other accounting websites. You need to include
bibliographic references for each reference that you use according to the APA Style Guide.

Select 6 current events from the credible resources available to you using the online library
resources at UCW and the web (i.e. professional organization or academic journal).

Some suggestions for current event subjects to search for are:

• Activity-based costing
• Cost-volume-profit analysis
• Job-order costing
• Zero-based budgeting
• Incremental analysis
• Transfer pricing
• Triple bottom line (people, profit, planet)
• Accounting ethics
• Accounting scandals
• International Accounting Standards
• Other management accounting topics covered in this course

As part of this assignment, you will be expected to present an executive summary for one of
your current events to the class on an assigned date. The presentation is expected to be
approximately 10 minutes in length and should include a summary of your current event,
reference to applicable management accounting topics covered in class, what this current
event means in relation to managing the financial and business operations, ethics, and the
people in the organization. Please include an appropriate visual aid (if available).

Contribution Grade (weight 15%)

The portion of the grade assigned for Class participation will be associated with actual
contributions that a student makes to the learning climate in the course. To earn the fifteen
percentage points, a student will be expected to do the following:

• Contribute a fair share of comments during any classroom discussions.

• Offer concepts and ideas from course readings and other resources and not just
personal opinion, especially where personal opinion illustrates that the student has
come to class unprepared to make a constructive contribution.
• Offer answers to any questions posed by the instructor during each class.
• Ask questions of the instructor for clarification and/or elaboration of any concepts
being examined in the course.
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• Engage other students in a constructive manner in any class discussions or any
discussions in small groups, trios or pairs.
• Demonstrate respect for other students.

For each class you are to prepare your response to the assigned discussion question(s). This
response is to be a composite of your experience, your readings, and the course material and
your research into the topic. Students will be selected at random to present to the class their
prepared response. For those students not selected, you will hand-in your notes to the
professor to prove completion of the assigned task.

Homework Assignments (weight 25%)

Practice exercises and problems will be assigned over the eight-week period. You are
expected to complete and submit these assignments for grading. Late submission of the
assignments will lose marks.
Summary
This is a very concentrated course and it requires dedication, discipline and an adequate time
commitment (15+ hours per week). I cannot overstate the importance of staying up-to-date
with the material and with the preparation of assignments.
In conclusion, you are expected:
1. To take responsibility of your own learning during this program. I will be available to
offer whatever assistance by email, online, or in person if you reside in Vancouver to
help you to be successful.
2. To further your learning by reading the assigned materials, reviewing the materials
provided on MyUCW, and supplementing your studies with further internet searches so
that you can offer ideas and concepts to your classmates during online discussions.
3. To demonstrate your participation and critical thinking through your participation.
4. To complete assignments on time and with academic rigor.
5. To demonstrate proficiency in the subject area through your assignments, through
your participation, and on the quizzes.

Instructor Biography

Professor James Tong, PhD, DBA, CGA, FCMA(UK), FCPA(HK), MCInstM

Email : jywtong@hotmail.com

In addition to his two doctorate degrees (i.e. Doctor of Philosophy from the University of
Nottingham, England and Doctor of Business Administration from the Hong Kong
Polytechnic University), Dr. James Tong is currently holding the accounting designations of
Certified General Accountant of British Columbia, Fellow of the Chartered Institute of
Management Accountants (United Kingdom), and Fellow of the Hong Kong Institute of
Certified Public Accountants. He is also a professional member of the Canadian Institute of
Marketing. He also has earned several professional designations in business and
management awarded by leading chartered institutes in the United Kingdom.

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Dr. Tong has extensive experience in teaching business courses (i.e. Financial and
Management Accounting, Micro and Macro Economics, International Trade, Marketing,
Business and Hospitality Management) in both undergraduate and postgraduate programs in
Hong Kong and Canada. In view of his previous managerial positions in both private and
public sectors as well as in colleges and universities, he brings with him a wealth of practical
experiences to enable the students to master the modern business materials and to effectively
apply contemporary concepts and theories to practice. With the illustration of practical
examples in the business world, he likes to teach adult students and is always ready to help
them succeed in their studies.