Ursuline College Accelerated Program
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AC 325 COST ACCOUNTING
02/10 Nancy Brown
COURSE DESCRIPTION:
This is an introductory course in cost accounting. Cost Accounting is used within an
organization for planning, control, motivation, and decision-making. Students will
determine the best way to accumulate costs in manufacturing and non manufacturing
operations to use in planning and control, cost allocation, pricing and capital budgeting.
COURSE OBJECTIVES:
This course should provide students with basic cost accounting skills to cost products you
with a basic understanding of accounting, the language of business. In addition, it will
provide the student with a solid foundation for recording financial transactions and
interpreting financial statements. Case studies and problems will be used to facilitate the
student’s understanding of generally accepted accounting principles.
Instructional Materials:
Cost Accounting, A Managerial Emphasis, 13th Edition
Horngren, Datar and Foster
Preparation and Assignments:
The accelerated pace of this course requires the student to assume the initiative in
reviewing the content and completing the class assignments before each session.
Students will receive 10 points per classes. These points will be added up to make up a
participation grade for the class. Homework will be taken up periodically and will be
graded on the attempt not necessarily the correctness of the homework. It is a learning
tool, not a test. Late homework will be reduced by one letter grade.
Exams and quizzes are scheduled throughout the course.
Grading Criteria:
Your grade will be determined on the total points earned:
Participation and Class Discussion 100 points
Homework 100 points
Quizzes (2) 100 points
Exam(s) 100 points
Final 100 points
Total Points 500 points
.
Grading Scale:
A 93-100%
B+ 90-92%
B 86-89%
C+ 83-85%
C 76-82%
D+ 73-75%
D 70-72%
F Failing (below 70%)
Grade Criteria for Written Assignments
Class will follow UCAP policies on written assignments.
Grade Criteria for Classroom Discussion
1. Originality and quality of analysis used in class discussion.
2. Respect for the ideas presented by others.
3. Level of information content understanding reflected in the comments.
Course Outline
Class 1 Introduction
Chapter 1: An Accountant’s Role for the Organization
Chapter 2: An Introduction to Cost Terms and Purposes
Chapter 3: Cost Volume- Profit Analysis
Class 2
Chapter 4: Job Costing
Chapter 5: Activity Based Costing
Class 3
Quiz One
Chapter 6: Master Budget and Responsibility Accounting
Chapter 7: Flexible Budgeting: Direct Cost Variances and Management Control
Chapter 8: Flexible Budgeting, Overhead Cost Variances, and Management Control
Class 4 – on line
Chapter 9: Inventory Costing and Capacity Analysis
Chapter 10: Determining How Cost Behave
Take home test
Class 5
Chapter 11: Decision Making and Relevant Information
Chapter 12: Pricing Decisions and Cost Management
Take home test due
Class 6 – on line
Chapter 15 Allocation of Support Department Costs, Common Costs, Revenues
Chapter 16 Cost Allocation – Joint products and byproducts
Class 7
Quiz Two
Chapter 17: Process Costing
Chapter 21 Capital Budgeting and Cost Analysis
Class 8 Final Exam
Class 1
Assignments to be completed prior to class:
• Read Chapters 1, 2 and 3
Objectives:
Chapter 2
• Define and illustrate a cost objective
• Distinguish between direct costs and indirect costs
• Differentiate between inventoriable costs and period costs
• Explain why product costs are computed in different ways for different purposes
Chapter 3
• Understand the assumptions for Cost-Volume-Profit analysis
• Determine the break-even point and output level needed to achieve a target operating
income
• Explain CVP analysis in decision making and how sensitivity analysis helps managers
cope with uncertainty
• Use CVP analysis to plan variable and fixed costs
• Adapt CVP analysis to situations in which a product has more than one cost driver
• Distinguish between contribution margin and gross margin
Activities:
• Introduce the facilitator and the individual class members
• Discuss course goals and learning objectives, the student responsibilities, grading
criteria, class attendance and outside reading.
• Provide an overview of material presented in the readings.
• Class discussion of in class assignments
Chapter 2 In Class Problems 2-29, 32 and 28
Chapter 3 In Class Problems 3-16, 17, 21, 22, 33,37
• Homework for next week 2-34, 3-38, 3-39
Class 2
Assignments to be completed prior to class:
• Read Chapter 4 and 5
• Chapter 3 Homework - Problems 2-34, 3-38, 3-39
Objectives:
Chapter 4
• Distinguish job costing from process costing
• Outline the approach to job costing
• Distinguish between actual costing and normal costing
• Account for end of the period underallocated or overallocated indirect costs using
alternative methods.
Chapter 5
• Explain undercosting and overcosting of products and services
• Distinguish between the traditional and the activity based costing approaches to
designing a cost system
• Describe the four part cost hierarchy
• Use activity based costing systems for activity-based management
• Compare activity-based costing with department-based costing
Activities:
• Review answers to homework from Chapter 3 Homework
• Review assigned chapters with students and answer questions
• In class problems Chapter 4 – 20, 23, 25,32
• In class problems Chapter 5 – 17, 20,27,32
• Homework for next week Chapter 4 – 31, 32, 33
• Homework for next week Chapter 5 – 21, 22, 36, 40
Class 3
Assignments to be completed prior to class:
• Prepare for Quiz One – Chapters 2 and 3
• Read Chapter 6, 7, 8
Objectives:
Chapter 6
• Understand what a master budget is and explain its benefits
• Describe the advantages of budgets
• Prepare an operating budget and its supporting schedules
• Use a computer-based financial planning models in sensitivity analysis
• Describe responsibility centers and how they are used
Chapter 7
• Distinguish between a static budget from a flexible budget
• Develop flexible budgets and compute flexible-budget variances and salesvolume
variances
• Explain why standard costs are often used in variance analysis
• Compute price variances and efficiency variances for direct cost categories
• Perform variance analysis in activity based costing systems
Chapter 8
• Identify the features of a standard-costing system
• Compute variable overhead efficiency variance and the variable overhead
spending variance and how they differ
• Compute a budgeted fixed overhead cost rate
• Show how the 4 variance analysis approach reconciles the actual overhead
incurred with the overhead amounts allocated during the period
Activities:
• Quiz One
• Review Chapter 4 and 5 homework
• Review assigned Chapter with students
• In class problems chapter 6 - 22, 33, 34
• In class problems chapter 7 – 20, 32
• In class problems chapter 8 – 20, 28
Homework for next week 6-16, 28, 37; 7-21, 29, 39; 8-29,36
Class 4 online
Assignments to be completed prior to class:
• Read Chapters 9 and 10
• email homework to instructor
Take test
Objectives
Chapter 9
• Identify what distinguishes variable costing from absorption costing
• Prepare income statements under absorption costing and variable costing
• Explain differences in operating income under absorption costing
• Describe the variety of capacity concepts that can be used in absorption costing
• Understand different pricing impacts from absorption costing
Chapter 10
• Describe linear cost functions and three common ways in which they behave
• Understand cost estimation
• Outline steps to determine the estimation of cost functions
• Determine criteria to evaluate and choose cost drivers
Activities
• Complete take home test. Bring to next class
• Review In Class Assignments for Chapters 9 and 10. Problems 9-16,21,22 and 1022,23,26. Answers will be posted on Angel
• Homework for next class 9- 31,32 and 10 – 20, 28,33
Class 5
Assignments to be completed prior to class:
• Homework for Chapter 9 and 10
• Read Chapters 11 and 12
• Take Home Test chapters 1-8
Objectives
Chapter 11
• Use the five step decision process to make decisions
• Differentiate between relevant and non relevant costs and revenues in decision
making
• Distinguish between quantitative and qualitative factors in decision making
• Explain opportunity cost
• Choose products when there are capacity constraints
Chapter 12
• Discuss the major influences on prices
• Distinguish between short term and long term pricing
• Price products using the target costing approach
Activities
• Review assigned chapters with students and answer questions
• Review of homework chapter 9 and 10
• In class problems 11- 22, 27, 30, 36
• In class problems 12 – 23,24,27
*Homework for next class 11-30, 35 and 12- 17,25,30
Class 6 online
Assignments to be completed prior to class:
• Homework for Chapters 11 and 12- email to instructor by April 19
• Read Chapter 15 and 16
Objectives
Chapter 15
• Differentiate the single rate from the dual rate cost allocation
• Allocate support department costs using the direct, step- down and reciprocal
methods
• Allocate common costs using either the stand-alone or the incremental method
Chapter 16
• Identify the split-off point in a joint cost situation
• Distinguish joint products from by products
• Explain why joint costs are allocated to individual products
• Allocate joint costs using different methods
Activities
• Prepare in class problems 15-16,27 and 16-16,17,18
• Solutions to problems will be posted on Angel
• Homework for next class 15- 17, 21, 23
• Homework for next class 16 – 25, 27
*Study for quiz
Class 7
Assignments to be completed prior to class:
• Homework for Chapters 15 and 16
• Read Chapter 17 and 21
Objectives
Chapter 17
• Describe the five step in process costing
• Calculate equivalent units and understand how to use them
• Use the weighted average method and FIFO method of process costing
Chapter 21
• Recognize the multiyear focus of capital budgeting
• Use and evaluate the five types of capital budgeting methods
Activities
*Quiz #2
• Review assigned chapters with students and answer questions
• In Class Chapter 17 – 16, 17,19
• In Class Chapter 21 – 17, 21, 25
• Review for final
Class 8
Final Exam – Chapters 8-17, 21
Attendance Policy: Attend class regularly. It is critical for success in this
course. You should email me if you plan to be absent.
ADA Policy: Students with documented disabilities, including those with
learning disabilities, may be entitled to reasonable
accommodations for this course. If you would like to
request testing or other accommodations because of a
disability, please make an appointment with me as soon as
possible to discuss your situation and possible needs.
Effective and timely communication will allow us to work
with Ursuline College’s Office of Academic Support and
Disabilities Services (Mullen 312, 449-2049), if necessary
to arrange for appropriate accommodations.