Azerbaijan University s3

Azerbaijan University

Business School

Acct 2102 Principles of Accounting II

Instructor: Garayev Tahir

Phone: +994 50 616 00 51 Email: [email protected]

Office hour: after class time or by appointment

Class hour: see class schedule

Course Materials:

1. Management Accounting for Business Decisions, Colin Drury, 2001 2. Accounting, Thompson R., 2000 3. Cost and Financial Accounting, Rubby L., 1999 4. Managerial Accounting, by Jackson and Sawyers, 2nd edition, South-Western Thomson Learning

Course Objectives: The aim of this course is to provide an introduction to the theory and practice of management accounting and emphasize its role in making business decisions.

Learning aims

This syllabus aims to test student’s ability to:

 explain and use concepts and processes to determine product and service costs;  explain direct, marginal and absorption costs and their use in pricing;  apply cost-volume-profit (CVP) analysis and interpret the results;  apply a range of costing and accounting systems;  explain the role of budgets and standard costing within organisations;  prepare and interpret budgets, standard costs and variance statements.

Tentative Outline for Management Accounting Course

1. Introduction to management accounting: The objective of this section is to provide an introduction to management and cost accounting. We define accounting and distinguish between financial, management and cost accounting. 2. An introduction to cost terms and concepts: The aim is to provide you with an understanding of the basic cost terms and concepts that are used in the management accounting literature. 3. Cost-volume-profit analysis: This objective of CVP analysis is to establish what will happen to the financial results if a specified level of activity or volume fluctuates. 4. Measuring relevant costs and revenues for decision making: In this chapter we are going to focus on measuring costs and benefits for non-routine decisions.

Quiz # 1 (1-4)

5. Cost assignment: This chapter focuses on the costing system and explains the process of how costs are accumulated and assigned to cost objects. 6. Activity-based costing: In this chapter we shall focus on ABC systems. In particular, the measurement of indirect costs for decision-making using ABC techniques will be examined. The major aims of the chapter are to explain how an ABC system operates and provide you with a conceptual understanding of ABC. 7. Pricing decisions and profitability analysis: We shall consider the role that accounting information plays in determining the selling price by a price setting firm. Where prices are set by the market our emphasis will be on examining the cost information that is required for product-mix decisions. In particular, we shall focus on both product and customer profitability analysis. 8. Decision-making under conditions of risk and uncertainty: We shall consider the situations where the manager is needed to make decisions under the conditions of risk.

Quiz # 2 (5-8)

9. Capital investment decisions: In this chapter we shall examine the economic evaluation of the desirability of investment proposals. We shall concentrate on the investment decisions of business firms, but the same principles, with modifications, apply to individuals, and the public sector. 10. The budgeting process: Our objective in this chapter is to focus on the planning process within a business organization and to consider the role of budgeting within this process. 11. Management control systems: This chapter begins by describing the different types of controls that are used by companies. The elements of management accounting control systems will then be described within the context of the overall control process. 12. Standard costing and variance analysis: We shall consider a financial control system that enables the deviations from budget to be analysed in detail, thus enabling costs to be controlled more effectively.

Quiz # 3 (9-12)

13. Divisional financial performance measures: In this chapter we shall focus on financial measures of divisional performance. However, financial measures cannot adequately measure all those factors that are critical to the success of a division. Emphasis should also be given to reporting key non-financial measures relating to such areas as competitiveness, product leadership, quality, delivery performance, innovation and flexibility to respond to changes in demand. 14. Transfer pricing in divisionalized companies: In this chapter we shall examine the various approaches that can be adopted to arrive at transfer prices between divisions. Although our focus will be on transfer pricing between divisions (i.e. profit or investment centres) transfer pricing can also apply between cost centres (typically support/service centres) or from cost centres to profit/investment centres. 15. Cost management: Cost management focuses on cost reduction and continuous improvement and change rather than cost containment.

Quiz # 4 (13-15) POLICIES: Teaching & Learning The teaching methods used are primarily brief lectures, case discussions, class exercises, video discussion, and student presentations. Learning also takes place through discussion of relevant topics and recent events on the Discussion Board. Students are required to read the assigned chapters, cases and other relevant material prior to class. Everyone must be ready to discuss any of the above mentioned in class.

Attendance Students are expected to attend all classes (and to arrive on time!), except when precluded by emergencies, religious holidays, or other extenuating circumstances. If you must miss a class please inform the instructor in advance. Also, make arrangements with your peers to take notes for you. Three missed class periods will result in one letter markdown in class participation grade. Four or more times of absence may result in "WF" unless evidence of emergency is provided. Assignments are due on the designated date in hard copy form regardless of class attendance. Unless an absence is caused by emergency, students will not be allowed to make up missed work (including exams) if they have failed to make arrangements with the instructor in advance. Tent Cards To foster discussions and group interactions, you are to prepare a tent card with your name dark enough and large enough so that your instructor can read it and become familiar with you by name as quickly as possible. You will put your tent card in a visible place in front of you in every class session.

GRADING:

The final grade will be based on performances on the following areas:

 Case Write-ups and presentations - Individual Assignments - 10%  Midterm Exam - 20% The 1.5 hour exam will be a combination of objective/identification and short-answer/essay questions.  Final Exam - 40% The 2 hour exam will be a combination of objective/identification and short-answer/essay questions.  Quizzes - 10%  Semester activity – 10%

Grades will be distributed regarding the following sheet:

Scores AKTS scores A+ = 97 – 100 A = 93 – 96 A = 90 – 100 A- = 90 – 92 B+ = 87 – 89 B = 83 – 86 B = 80 – 89 B- = 80 – 82 C+ = 77 – 79 C = 73 – 76 C = 70 – 79 C- = 70 – 72 D+ = 67 – 69 D = 63 – 66 D = 60 - 69 D- = 60 – 62 F = 0 - 59 E = 50 – 59 Fx = 40 – 49 F = 0 – 39

Case Write-ups: Due to the duration of this class, Case Write-ups ONLY TWO weekly tests will be possible in case of illness or emergency. No make-up of midterm and final exams is available. If an emergency occurs and you cannot take the exams, I will consult with the Dean to see if you can take a make-up.

Quizzes: You will have 4 quizzes during the semester. Each quiz will be given during a first 30-40 minutes period of the class. The test will only cover the parts of the chapter you were assigned to read.

Exams: One midterm and one final exam consist of writing assignments, true/false and multiple choice type questions. Midterm Exam covers first eight chapters while Final Exam will cover the rest of the book.

Cheating: Cheating will not be tolerated. Leaving the room with an exam, attempting to steal an exam, copying down questions from an exam, attempting to obtain assistance from other students during an exam, using unauthorized reference material during an exam or turning in work done by others will be considered cheating. In case if I notice your dishonest behavior on quizzes or exams, you will loose 40% of the points (tests, exams) on the first attempt. If you continue cheating you will be graded 0 for the test/exams. The facts will be turned over to the Dean or Associate Dean of the School for further action. Members of the academic community, students are expected to recognize and uphold standards of intellectual and academic integrity. The School and I expect that students are honest, are eager to learn and that they submit for credit only the products of their own efforts.