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Commerce 4AA3
Managerial Accounting II
Fall 2015
Course Outline
Accounting and Financial Management Services Area
DeGroote School of Business
McMaster University
COURSE OBJECTIVE
The objective of this course is to develop the students’ analytical abilities to deal with problems relating
to financial situations within the firm. This course deals with the role of accounting in an organization’s
planning and control system which includes costing, cost allocation, variance analysis, responsibility
accounting, performance evaluation, and incentive compensation. The way in which management
accounting information affects the strategic and operational decisions within the organization will also be
discussed.
INSTRUCTOR AND CONTACT INFORMATION
Section:
Instructor:
Email:
Office:
Office Hours:
Tel.:
C01 – Thursday, 14:30-17:20 KTH B124
C02 – Thursday, 11:30-14:20 KTH B132
Garth Sheriff
sheriffg@mcmaster.ca
DSB/313
Thursdays 10:30-11:30 and 17:30-18:30 or by appointment
TBA
COURSE ELEMENTS
Credit Value:
Avenue:
Participation:
Evidence-based:
3
Yes
Yes
Yes
Leadership:
Ethics:
Innovation:
Experiential:
Yes
Yes
No
Yes
IT skills:
Numeracy:
Group work:
Final exam:
Yes
Yes
Yes
Yes
Global view:
Written skills:
Oral skills:
Guest speaker:
Yes
Yes
Yes
No
COURSE DESCRIPTION
The course looks at organizational theory and the ways in which transfer pricing, divisional performance
evaluation and incentive compensation systems are integrated into the strategic planning and management
control systems. It also includes topics on activity-based costing and management in greater details. It
introduces such topics as customer profitability analysis, strategic profitability analysis, as well as the
management of quality and time. Ethics, governance, and management control of not-for-profits will also
be introduced as time permits.
The course considers these topics using readings, problems and cases to provide students with an in-depth
appreciation of the field. Throughout the course, the objective is to develop your ability to use your
knowledge of accounting and analytical methods to solve problems in the areas of planning and control
and the way in which they contribute to developing and implementing strategy in organizations.
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LEARNING OUTCOMES
Upon completion of this course, students will be able to complete the following key tasks:
 Understand the application of balanced scorecard as a strategic management and performance
management system.
 Apply the principal of responsibility accounting to planning and control, with a focus on how
organizational strategy affects the design of management control system.
 Apply management accounting concepts to the design of specific components of the management
control system, including organizational structure, performance management system, and
compensation contract.
 Use analytical tools, such as activity-based costing, customer profitability analysis, strategic
profitability analysis, etc., in assessing the performance of an organization with respect to its strategy.
REQUIRED COURSE MATERIALS AND READINGS

Avenue registration for course content, readings and case materials
o http://avenue.mcmaster.ca
 Horngren, C.T., S.M. Datar, G. Foster, M. Rajan, C. Ittner, M. Gowing, and S. Janz. Cost Accounting:
A Managerial Emphasis, Sixth Canadian Edition, Prentice Hall Canada, Inc., ON: Scarborough, 2013.

Custom Courseware (Assignments and Cases)
o purchase a copy at the bookstore
OPTIONAL COURSE MATERIALS AND READINGS
 Hilton, R.W., M.W. Maher, and F.H. Selto. Cost x Decisions, Irwin McGraw-Hill, 2000 (HMS) (on
reserve in Innis Room).
 Anthony, R.N. and D.W. Young. Management Control in Nonprofit Organizations. Seventh Edition,
McGraw-Hill/Irwin, NY: New York, 2003 (AY) (on reserve in Innis Room).
 Reading List is available on avenue.mcmaster.ca and Selected Readings for Commerce 4AA3 are on
reserve in Innis Room.
EVALUATION
Learning in this course results primarily from readings, in-class discussion, and case studies (report and
presentation). Students will be evaluated on an individual basis for their participation in in-class
discussion and group work is required for case studies where group members will share the same grade.
If the majority of the group feels that a member does not deserve 100% of the mark assigned, it is the
group’s responsibility to inform the instructor and the member involved, in writing, specifying the
reasons and the percentage of the mark that should be assigned. Your final grade will be calculated as
follows:
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Components and Weights
Participation
Midterm Exam I
Midterm Exam II
Case submissions
Final Exam
Total
10%
10%
30%
10%
40%
100%
The instructor reserves the right to adjust the student's final grade by one grade point based on his/her
overall performance for the course.
http://www.mcmaster.ca/policy/StudentsAcademicStudies/UndergraduateExaminationsPolicy.pdf
Conversion
At the end of the course your overall percentage grade will be converted to your letter grade in
accordance with the following conversion scheme.
LETTER GRADE
A+
A
AB+
B
B-
PERCENT
90 - 100
85 - 89
80 - 84
77 - 79
73 - 76
70 - 72
LETTER GRADE
C+
C
CD+
D
DF
PERCENT
67 - 69
63 - 66
60 - 62
57 - 59
53 - 56
50 - 52
00 – 49
Communication and Feedback
Students who are uncomfortable in directly approaching an instructor regarding a course concern may
send a confidential email to the respective Area Chair (ylchan@mcmaster.ca) or the Associate Dean
(adbusac@mcmaster.ca).
Students who wish to correspond with instructors or TAs directly via email must send messages that
originate from their official McMaster University email account. This protects the confidentiality and
sensitivity of information as well as confirms the identity of the student. Emails regarding course issues
should NOT be sent to the Area Administrative Assistants.
Instructors are required to provide evaluation feedback for at least 10% of the final grade to students prior
to Week #8 in the term.
Instructors may conduct an informal course review with students by Week #4 to allow time for
modifications in curriculum delivery.
Students who wish to have a course component re-evaluated must complete the following form:
http://www.mcmaster.ca/policy/Students-AcademicStudies/Form_A.pdf
In order for the component to be re-read:
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




the component must be worth 10% or more of the final grade in the course
students pay a fee of $50 in Gilmour Hall #209 and the receipt is then brought to Student
Experience - Academic Office (formerly the APO) in DSB 104
the Area Chair will seek out an independent adjudicator to re-grade the component
an adjustment to the grade for the component will be made if a grade change of three points or greater
on the 12 point scale (equivalent to 10 marks out of 100) has been suggested by the adjudicator as
assigned by the Area Chair
if a grade change is made, the student fee will be refunded
Participation (10%)
Class participation is an essential part of the course. Students are expected to study the assigned materials
in advance, attempt the assigned problems and cases, and be prepared to discuss them during class.
Marks assigned for class participation will be based mostly on discussions of management accounting
topics, cases and problems as well as contribution to the learning environment. Contribution to the
learning environment includes submitting relevant articles to the Professor, discussion boards etc., for
purposes of classroom discussion. Contributions to the learning environment will be discussed further in
class. There are no marks assigned for class attendance.
For each week, students who do not participate at all in class discussion or through contribution to the
learning environment will receive a mark of ZERO, students who actively participate and contribute to
class discussion or the learning environment will receive a mark of ONE, and students whose
contribution to class discussion or learning environment is deemed satisfactory will receive a mark of 0.5.
Note: Assignment in lieu of Participation has been given in the past. NO Assignment in lieu of
Participation will be given for this course. Accordingly, students who do not participate at all in class
discussion will receive a mark of ZERO for class participation in this course.
Midterm I (10%)
The midterm examination will be multiple choice only and the content will be Week 1 and a review of
2AB3. The exam will be held in-class on October 1 and will be 60 minutes in length.
Midterm II (30%)
The midterm examination will contain multiple choice, short answer and long form case questions that
accounts for 30% of your final grade. The exam will cover material from the text book, readings, lectures
and class discussion. The exam will be held in-class on October 29th.
Case Submissions (10%)
Students will be required to hand in five cases (the cases are numerated and bolded on the course
outlined). Students will on work on these cases in small groups of no less than three and no more than
four.
The case report must be of professional quality, typed, double-spaced with reasonable fonts (size 11) and
margins (1”). The case report should include (i) a brief introduction identifying the relevant
organizational/accounting problems and issues; (ii) a detailed analysis of the issues with
recommendations; and (iii) a conclusion. It is expected that the written case will be presented as a logical
argument based on sound analysis of the case facts and not on opinion or speculation. Point-form
analysis is not acceptable. The report must be short, that is, fewer than five double-spaced typed pages,
concise and to the point. Excessive length, excessive verbosity, lack of precision or otherwise poor
writing skill will affect your grade. The case will be graded as “reasonably attempted”. If a case was
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reasonably attempted then you will receive “2”, if not the case will receive a “0”. This will be discussed
further in class.
Case reports are due at the beginning of the class (8:30 a.m. for C01 and 11:30 am. for C02). Late
submission will not be accepted for marking, i.e., a mark of ZERO will be assigned accordingly.
Final Exam
The Faculty’s Policy on Missed Mid-Term Examinations/Tests (p. 6) does not apply as there is no midterm examination for this course.
The final exam will be cumulative. There will be one comprehensive final examination. The rules
customarily followed by the DeGroote School of Business will govern absence from the examinations.
NOTE: The use of a McMaster standard calculator (Casio FX-991) is allowed during examinations in this
course. See McMaster calculator policy at the following URL:
http://www.mcmaster.ca/senate/academic/calculat.htm
ACADEMIC DISHONESTY
You are expected to exhibit honesty and use ethical behaviour in all aspects of the learning process.
Academic credentials you earn are rooted in principles of honesty and academic integrity.
Academic dishonesty is to knowingly act or fail to act in a way that results or could result in
unearned academic credit or advantage. This behaviour can result in serious consequences, e.g. the
grade of zero on an assignment, loss of credit with a notation on the transcript (notation reads:
“Grade of F assigned for academic dishonesty”), and/or suspension or expulsion from the university.
It is your responsibility to understand what constitutes academic dishonesty. For information on the
various types of academic dishonesty please refer to the Academic Integrity Policy, located at;
www.mcmaster.ca/academicintegrity
The following illustrates only three forms of academic dishonesty:
1. Plagiarism, e.g. the submission of work that is not one’s own or for which other credit has been
obtained.
2. Improper collaboration in group work.
3. Copying or using unauthorized aids in tests and examinations
In this course we will be using a web-based service (Turnitin.com) to reveal plagiarism. Students will
be expected to submit their work electronically to Turnitin.com and in hard copy so that it can be
checked for academic dishonesty. Students who do not wish to submit their work to Turnitin.com
must still submit a copy to the instructor. No penalty will be assigned to a student who does not
submit work to Turnitin.com. All submitted work is subject to normal verification that standards of
academic integrity have been upheld (e.g., on-line search, etc.). To see the Turnitin.com Policy,
please go to;
www.mcmaster.ca/academicintegrity
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POLICY ON MISSED MID-TERM EXAMINATIONS / TESTS
1.
Students may request relief from a regularly scheduled midterm, test, assignment or other
course component in the following ways:
a)
b)
c)
for absences from classes lasting up to three (3) days; or
for absences from classes lasting more than three (3) days.
for conflicts arising from Student Experience - Academic Office approved events
a)
For absences from classes lasting up to three (3) days
Students must use the MSAF (McMaster Student Absence Form). This is an on-line, self-reporting
tool, for which submission of medical or other types of supporting documentation is normally not
required. Students may use this tool to submit a maximum of one (1) request for relief of missed
academic work per term as long as the weighting of the component is worth less than 25% of the
course weight. Students must follow up with their course instructors regarding the nature of the
relief within two days of submitting the form. Failure to do so may negate the opportunity for relief.
It is the prerogative of the instructor of the course to determine the appropriate relief for missed term
work in his/her course. Details are described below.
If the value of the component is worth 25% or more, students must report to their Faculty Office (the
Student Experience – Academic Office for Commerce students) to discuss their situation and will be
required to provide appropriate supporting documentation.
Please visit the following page for more information about MSAF:
http://academiccalendars.romcmaster.ca/content.php?catoid=13&navoid=2208#Requests_for_Relief
_for_Missed_Academic_Term_Work
b)
For absences from classes lasting more than three (3) days
Students cannot use the MSAF. They MUST report to their Faculty Office (the Student Experience –
Academic Office for Commerce students) to discuss their situation and will be required to provide
appropriate supporting documentation.
Students who wish to submit more than one request for relief of missed academic work per term
cannot use the MSAF. They must report to the Student Experience – Academic Office and discuss
their situation with an academic advisor. They will be required to provide supporting documentation
and possibly meet with the Manager.
c) For conflicts arising from Faculty Office approved events
Students unable to write a mid-term at the posted exam time due to the following reasons: religious;
work-related (for part-time students only); representing university at an academic or varsity athletic
event; conflicts between two overlapping scheduled mid-term exams; or other extenuating
circumstances, have the option of applying for special exam arrangements. Please see the DeGroote
Missed Course Work Policy for a list of conflicts that qualify for academic accommodation
http://ug.degroote.mcmaster.ca/forms-and-resources/missed-course-work-policy/
Such requests must be made to the Student Experience – Academic Office at least ten (10) working
days before the scheduled exam along with acceptable documentation.
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Non-Commerce students must submit their documentation to their own Faculty Office and then alert
the Student Experience – Academic Office of their interest in an alternate sitting of the midterm.
Adjudication of all requests must be handled by the Student Experience – Academic Office.
Instructors cannot allow students to unofficially write make-up exams/tests.
The MSAF cannot be used during any final examination period.
If a mid-term exam is missed without a valid reason, students will receive a grade of zero (0) for that
component.
POLICY FOR APPROVED MISSED ACADEMIC WORK
Students who cannot write a test, and have advanced knowledge and permission as described above,
will be given the opportunity to write an alternate version of the test and an alternate time.
Students who did not write a test, and subsequently provide an MSAF submission, or documentation
for which they have been approved by the Student Experience – Academic Office, will have the
weight of the missed work reallocated across other course components. The student must follow up
with the instructor to understand this process and decision.
Students who submit an MSAF, or have been approved by the Student Experience – Academic
Office, for an assignment deadline, will be given an extension of 3 days for the assignment. Please
note, the student will ultimately be required to submit the assignment.
STUDENT ACCESSIBILITY SERVICES
Student Accessibility Services (SAS) offers various support services for students with disabilities.
Students are required to inform SAS of accommodation needs for course work at the outset of term.
Students who require academic accommodation must contact Student Accessibility Services (SAS) to
make arrangements with a Program Coordinator. Academic accommodations must be arranged for
each term of study. Student Accessibility Services
can be contacted by phone 905-525-9140 ext. 28652 or e-mail sas@mcmaster.ca
For further information, consult McMaster University’s Policy for Academic Accommodation of
Students with Disabilities;
http://www.mcmaster.ca/policy/Students-AcademicStudies/AcademicAccommodationStudentsWithDisabilities.pdf
POTENTIAL MODIFICATIONS TO THE COURSE
The instructor and university reserve the right to modify elements of the course during the term. The
university may change the dates and deadlines for any or all courses in the extreme circumstances. If
either type of medication becomes necessary, reasonable notice and communication with the students
will be given with explanation and the opportunity to comment on changes. It is the responsibility of
the student to check their McMaster email and course websites weekly during the term and to note
any changes.
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COURSE SCHEDULE
Commerce 4AA3: Managerial Accounting II
Course Outline
Week Date
Topic
Reading
1
September 10 Introduction – Code of Professional Ethics
Case: Haas School of Business
2
September 17 Strategy and Balanced Scorecard
pp. 517-530
Case: Mountain City Transit
3
September 24 Management Control and Decentralization
pp. 924-930
Responsibility Accounting and Responsibility
pp. 214 -219
Centres
Traditional and Beyond Budgeting
4
October 1
pp. 964-982
Midterm Exam I – in-class
Profit and Investment Centres:
Return on Investment &Economic Value Added
5
October 8
Profit and Investment Centres:
Return on Investment & Economic Value
pp. 964-982
Added
Transfer Pricing – Expense Centres
Ch. 14
(Common Cost Allocation)
(1) Case Study: Virshire Company
October 12-17
Mid-term recess
6
October 22
Transfer Pricing – Profit Centres
pp. 930-945
Case: Birch Paper Company
(2) Case Study: Florence Industries
st
7
October 29
pp. 983-988
1 half - Midterm Exam II – in-class
2nd half - Performance Measurement and
Incentive System
(3) Case Study: AB Thorsten
8
November 5
Operating Income Variance Analysis – Review
Chs. 7 & 8
Extended Variance Analysis (Appendix)
pp. 644-652
(4) Case Study: Vyaderm Pharmaceuticals
9
November 12 Strategic Profitability Analysis
pp. 530-542
Productivity Management
10
November 19 Activity-Based Costing and Management
Ch. 5
Customer Profitability Analysis
pp. 652-658
11
November 26 Case: Wilson Electronics (A) and (B)
pp. 754-771
Strategic Cost Management: Quality
12
December 3
Management Control for Not-for-Profit
To be announced
Organizations
(5) Case Study: Union Medical Center
Corporate Governance
Case: Research in Motion (RIM): Governance
at Risk?!
Tentative course outline is subject to change.
Problems
P13-22, 36
P24-20
P24-20, 22, 32
P14-28
P23-20, 24, 28, 29,
32, 34
P24-34, 36, 42
P16-27, 28
P13-30, 31, 32, 37,
38
P5-28, 40
P16-32, 33
P5-40
P19-19, 20, 30, 40