Northeastern University College of Business Administration STRATEGIC COST ANALYSIS FOR DECISION MAKING ACC 3416 Summer II 2012

MTWTh INSTRUCTOR: Prof. William Goldman E-mail: w.goldman@neu.edu goldman.w@gmail.com REQUIRED COURSE MATERIALS: Cost Management: A Strategic Emphasis 5th edition by Blocher, Stout, and Cokins (McGraw-Hill Irwin, 2010). Some class materials are available for downloading (http://blackboard.neu.edu) from Blackboard such as the homework solutions and syllabus. I will use Blackboard to communicate to students, so if you are not enrolled in Blackboard, you may miss key information or announcements. You can also use Blackboard to communicate with your classmates and me. COURSE OBJECTIVES: Strategic Cost Analysis (or Cost Accounting), ACC 3416 expands upon the topics discussed in Managerial Accounting, ACC 2301. This course focuses on the critical role of cost accounting information in business decisions and in managing a firms profitability. To be effective, management accountants need to know how to undertake an appropriate cost analysis and to communicate the results and implications of the analysis effectively to others in the organizations. Therefore, the course emphasizes the role of management accountants as integral members of decision making teams and as consultants to senior management. A framework for measuring managerial performance is developed through an analytical treatment of cost behavior under dynamic conditions by employing tools such as cost-volume-profitanalysis, budgeting, and actual and standard cost systems. The use of cost-related analytical skills in decision making contexts is emphasized. It is important not only to understand how cost accounting information is developed and used, but also to consider why it is used (i.e., its purpose), and whether it should be used for that purpose. Thus, my intent is not for you to merely learn how concepts, procedures, and techniques are often applied in practice, but also for you to learn to critically evaluate their use. Upon completion of this course, students should understand how to determine product costs in process costing and job costing systems, understand cost allocation issues, evaluate and interpret cost variances, and understand how to determine and use relevant information for various managerial accounting decisions. OFFICE HOURS: Monday 11:45 am-12:45 pm Wednesday 11:45 am--12:45 pm and by appointment

CLASS PROCEDURES: Class sessions will be conducted using both lecture and discussion formats. Students will be expected to participate in class through class discussions and small group problem solving. Students will work in small groups to solve problems and then present their solutions to the class. Cases will be used to highlight key concepts covered in the course. The cases and class discussions will focus on actual business situations and issues. CLASS POLICIES: Since this is an upper-level course, I expect that each of you will act in a professional manner. You should treat this course as if it was a job and act accordingly. Therefore, I expect that you will show up to class on time, will not engage in private conversations when I or a fellow classmate is speaking, will meet deadlines for assignments, and will speak to me and your fellow classmates with respect and courtesy. If you fail to meet these class policies, as with a job, your performance evaluation will be affected (e.g., your grade in participation or assignments will be penalized). Regular attendance and active participation in every class session are key to successful course completion. Attendance will be taken and included in your grade. Do not schedule other activities (e.g., interviews, medical appointments) during this class. Frequent absence will likely result in failure. You cannot cram for this course, nor can you sit passively and hope to acquire sufficient understanding to apply the business principles presented. The classroom environment will be interactive and I will call on students at random for their input. Be prepared! Daily preparation outside of class is important. You too must practice regularly to acquire the requisite skills. Read each chapter BEFORE working the suggested exercises and problems, and AGAIN AFTER the class discussion to reinforce the material in your mind. I encourage you to form study groups with other class members. However, work you turn in must be your own. If you need help working the assignment, get help from me before the class session when it is due. Students are expected to bring a calculator to every class and to exams. Cell phones should be turned off. Therefore, laptops are not necessary and should not be used during class. Chat programs, web surfing, and other non-class related activities on laptops are strictly prohibited. Failure to adhere to this policy will jeopardize a students class participation grade GRADING: Exam #1 Exam #2 Final Exam Case Analysis Participation Total 25% 25% 30% 15% 5% 100%

EXAMS: There will be three exams during the semester (including the final). The first two exams will be given during class time as scheduled. There are no makeup exams unless there is a valid excuse, and it must be fully documented. It is your responsibility to make alternate arrangements with me in advance. A cumulative final exam is scheduled during finals week. Students with exam conflicts must file an Exam Conflict Form with the Registrars Office by the Registrars deadline for final exam conflicts. A student missing the final exam with any excuse not deemed valid will receive a zero (0) final exam grade, and probable failure of the course. Once graded, examinations may be viewed in my office in accordance with the Students Bill of Academic Rights. Cases You will be expected to prepare a summary case analysis for one case assigned for that class. You have the option to work in groups (up to 4 people) to prepare the summary. The summary (max. 3 pages excluding exhibits) should identify in bullet format: Critical background information about the company, the environment it is operating in, and other factors of significance (Industry and Company analysis) The major issue(s) facing the company at the time of the case A summary of your analysis of alternative solutions/resolutions for the issues identified including key numbers you have calculated Your recommendation(s) to management (make sure to link your analysis to your recommendation) Update on the company if the company is an existing company (needs to be researched when appropriate) PARTICIPATION: You are expected to come to class prepared to discuss the chapter material on the first day a chapter is covered in class. At the end of the semester, I will assign a participation grade to each student in the class. This grade will be based on attendance and participation in class discussions. Each day I will note attendance and level of participation. ACADEMIC HONESTY: Northeastern University is committed to the principles of intellectual honesty and integrity, as set out in the Undergraduate Student Handbook. All members of the Northeastern community are expected to maintain complete honesty in all academic work, presenting only that which is their own work in tests and assignments. If you have any questions regarding proper attribution of the work of others, contact your professor prior to submitting the work for evaluation.

FINAL GRADES: Credit will be earned for the graded elements listed above under Grading and weighted as discussed there. The final grade will be determined as follows: Earned Credit 94-100% 90-93% 87-89% 84-86% 80-83% 77-79% Final Grade A AB+ B BC+ Earned Credit 74-76% 70-73% 67-69% 64-66% 60-63% Below 60% Final Grade C CD+ D DF

Session Date 1 2 7/2 7/3

Day M T

TENTATIVE COURSE SCHEDULE Chapter Introduction to Cost Accounting Topic 1 Cost Management and Strategic Decision Making: Chapter 1 & Chapter 2 Topic 2 Cost Management Concepts: Chapter 3 and Chapter 18 Cost Management Concepts: Chapter 3 and Chapter 18 Cost Management Concepts: Chapter 3 and Chapter 18 Chapter 4 Job Costing Chapter 4 Job Costing Chapter 5 Activity-Based Costing Chapter 5 Activity-Based Costing EXAM #1 CHAPTERS 1-5, 18 Chapter 6 Process-Costing

Required Reading & Suggested Assignments Read Chapter 1 and Chapter 2 (p 3841) Read Chapter 3 and Chapter 18 (p 815-818) 3-53, 57; 18-38, 41 Read Chapter 4 4-32, 37, 39, 40 Read Chapter 5 5-53, 58, 59

3 4 5 6 7 8 9 10

7/5 7/9 7/10 7/11 7/12 7/16 7/17 7/18

Th M T W Th M T W

Read Chapter 6

Session 11 12 13 14 15 16 17 18 19 20

Date 7/19 7/23 7/24 7/25 7/26 7/30 7/31 8/1 8/2 8/6

Day Th M T W Th M T W Th M

Chapter Chapter 6 Process-Costing Chapter 8 Cost Estimation Chapter 9 Profit Planning: Cost-Volume-Profit Analysis Chapter 9 Profit Planning: Cost-Volume-Profit Analysis Chapter 11 Decision Making with a Strategic Emphasis Chapter 11 Decision Making with a Strategic Emphasis

Required Reading & Suggested Assignments 6-39, 44, 51 Read Chapter 8 8-39, 42 to 46, 47 Read Chapter 9 and pages 445-447 9-41, 44, 54; 11-50 Read Chapter 11 11-43, 46, 63

Chapter 12 Strategy and the Analysis of Capital Investments Read Chapter 12 Chapter 12 Strategy and the Analysis of Capital Investments 12-53, 56, 63 Catch up Review

Session Date 21 22 23 24 25 26 27 8/7 8/8 8/9 8/13 8/14 8/15 8/16

Day T W Th M T W Th

Chapter EXAM #2 CHAPTERS 6, 8, 9, 11, 12 Chapter 10 Strategy and the Master Budget Chapter 10 Strategy and the Master Budget Chapter 14 Operational Performance Measurement: Direct Cost Variances Chapter 14 Operational Performance Measurement: Direct Cost Variances Chapter 15 Operational Performance Measurement: Indirect Cost Variances Chapter 15 Operational Performance Measurement: Indirect Cost Variances

Required Reading & Suggested Assignments

Read Chapter 14 14-62, 66, 68 Read Chapter 15 15-56, 57, 63 Case-Bridgton Submit Project to TurnItIn by 1:00 pm