Course prerequisites

The prerequisites for a course are intended to assure that you gain as much as possible from our efforts over the semester. There are two prerequisites for this course. The first is BUSA 202. That means you should have taken financial accounting BEFORE this semester, NOT concurrently with BUSA 203. It also means that I expect you to remember basic concepts from financial accounting and be able to use them. These concepts include, but are not restricted to, the definitions of basic accounting categories [e.g., assets, liabilities, revenues, expenses], the organization and content of balance sheets and income statements, and the difference between cash and accrual accounting. You already sold your financial accounting book? Consider buying it back.

The second prerequisite is the ability to use Excel; ALL quantitative for-credit assignments in the course must be completed using Excel. The spreadsheet work we do will not be terribly sophisticated, but I do insist on good spreadsheet practices. Failure to use good spreadsheet practices will result in a failing grade on individual assignments will probably result in a failing grade in the course. Students who lack good spreadsheet skills invariably achieve lower grades in the class than their better-prepared colleagues; students with exceptionally weak spreadsheet skills invariably wind up dropping the course to avoid a failing grade.  I have provided an extensive list of good spreadsheet practices at Rules for Good Spreadsheet Practice. Read through these and refer to them as you work on the assignments.  If you lack the requisite spreadsheet skills, PLEASE drop the course and enroll again after you have acquired the necessary working knowledge of Excel.

Course objectives specific to BUSA 203

Management accounting issues are addressed in an integrated framework which stresses organizational strategy and the role of management accounting information in production and marketing decisions. My single overriding objective in teaching this course is to have each of you develop a clear understanding of the role of management accounting in contemporary organizations, and the ability to apply that knowledge in a practical, professional setting. This means that students who complete this course will develop an understanding of the concepts underlying the development and use of management accounting information to achieve organizational objectives. Students will gain an understanding of the economics of business and service organizations; and the skill to analyze, evaluate, and discuss real-world business situations. Specifically, by the conclusion of this course, you should be able to do all of the following:

1. Discuss the fundamentals of management accounting, including relevant strategic issues, and be comfortable with the use of the terms and concepts of the discipline

2. Determine cost behavior patterns using both simple algebra and OLS regression

3. Assess the "economics of the business," using cost-volume-profit relationships to determine breakeven points, assess financial leverage, and evaluate profitability and cash flow. You will learn to integrate this information with your knowledge of strategy, markets, and operations in order assess the viability of a business situation.

4. Use revenue, cost, and operational data in management planning and decision making, including operational budgeting.

5. Determine product or service costs in a simple setting

6. Evaluate capital investment decisions using net present value

7. Use revenues, costs and other critical success factors in evaluation of management control systems

Finally, a major objective of this course is development of the analytical skill required to tackle "larger" problems than those at the end of a chapter in a textbook. End-of-chapter problems are pre-defined. You know the focus of the problems at the end of a given chapter because that's the way textbooks are written--problems at the end of chapter 5 focus on the chapter 5 content. Well, duh! Unfortunately, real world problems don't come conveniently packaged in wrappers that describe the nature of the situation and the tools or skills needed to make a decision or resolve a conflict. For this reason, I use cases and other materials which require that you think more broadly about a situation and then figure out how to apply your knowledge to the problem at hand. That's what you will do on the job, and the more we can do to set you up for success, the better off you will be.

Note that the emphasis here is on active learning and active involvement, and on using management accounting information in decision making, planning, and controlling operations. I have worked in a variety of manufacturing and service organizations, and I have been an academic for over 30 years. In all that time, I have never met anyone whose official title or job description was "management accountant." However, every successful manger or business executive I have ever met understood the terminology of management accounting and used management accounting concepts to make the day-to-day decisions that their jobs required. Thus, many, if not most of the folks who do management accounting are not accountants; they are managers – managers in sales, marketing, finance, human resources, engineering, or manufacturing. Even though the word "accountant" isn’t in their job descriptions (and they certainly don’t think of themselves as accountants), they do management accounting. They use management accounting concepts, tools, and terminology daily to fulfill their varied responsibilities. Whatever your concentration is within the School of Business, whatever industry or service you eventually wind up working in, you will routinely use management accounting information in decision making, evaluation and control.

You will note that 20% of your grade in this course is based on your participation in class. Participation means active involvement. Examples of active involvement include answering questions [whether you are called on or by volunteering], asking questions, and offering ideas or insights that no one else has contributed. Perhaps the most obvious way to "get credit" for participation is to faithfully do the homework [or to come with specific questions about the homework--as in "I was able to calculate the contribution margin, but I couldn't get any further because...".] In prior semesters, students have complained because I do not grade homework or "give credit" for doing it. Realistically, there IS credit for doing the homework. "Credit" for the homework shows up in your eventual mastery of the material, something that is guaranteed never to happen if you pass on the homework.

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Texts and materials

Introduction to Management Accounting by Horngren, Sundem, Stratton, Burgstahler and Schatzberg, 15th edition. Pearson Prentice Hall, 2012. [required]; ISBN is 9780132811439. The text comes bundled with MyAccountingLab, a Web-based tutorial and assessment program that we will use throughout the semester. The MyAccountinglab materials are an integral part of the course and are required; If you purchased a "different" book [used, earlier edition, "international" edition, etc.], it may not come with the MyAccountingLab access. Another reason for not trying to save a few buck on less expensive editions is the potential lack of consistency in pagination and content. I will NOT take responsibility for reconciling the differences between the required text and whatever other edition[s] you may have.

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Summary of graded assignments

Mapping of learning objectives and for-credit assignments