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*101207*
ACCT20053
Issues in Management Accounting
2007 TERM ONE
Course Profile
© Copyright Central Queensland University (CQU) 2007
Copyright material contained herein is either copied and/or communicated with the express
permission of the Copyright Owner or under the provision of the Copyright Act 1968.
CQU authorises the copying and/or communication to public access of this document provided
that copyright material, other than that created by the author/s, or for which permission has been
obtained, is restricted to CQU staff and students through a password protected Appendix.
CQU CRICOS Codes: 00219C - Qld; 01315F - NSW; 01624D - Vic
CQU Course Profile for ACCT20053 2007 Term One
PART A
Course details
Course code
ACCT20053
Course name
Issues in Management Accounting
Faculty
Faculty of Business & Informatics
Units of credit
Eight (8)
Prerequisite/Corequisite
Prerequisite course ACCT 20052
Suggested study commitment 16 hours per week or 192 hours per term
Term of offering
2007 Term One
Course website
http://mycqu.cqu.edu.au
Campuses
Brisbane, Flexible Learning, Gold Coast, Melbourne,
Rockhampton, Sydney
You must contact your faculty for their latest Guide for Students
This Course Profile contains important information. Please ensure that you read it
carefully. It is also strongly recommended that you keep this copy of your Course Profile
for future reference.
Throughout this document the term off-campus student means:

those students who are enrolled in the course by the Flexible, Distance or External mode.
This definition also relates to those students enrolled through Hong Kong College of
Technology, Hartford Institute (Singapore) or LaSalle-DHU (Shanghai). Students who are
enrolled by the flexible mode and who attend lectures on any of the Queensland campuses
are still referred to as off-campus students.
Throughout this document the term on-campus student means:

those students who are enrolled in the course by the internal mode at any of the Queensland
campuses or any of the Australian International campuses.
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CQU Course Profile for ACCT20053 2007 Term One
Course synopsis
This course introduces the concept of managerial accounting and enables students to argue the
difference between financial and management accounting. Students will be introduced to the
traditional approaches to costing such as job-order costing and process costing. Time will also be
spent looking at some of the alternative accounting systems in operations costing and backflush
costing. This course also introduces the additional purposes of management accounting in
provision of information for decision making and the evaluation of past decisions. Budgets are
studied in depth along with performance evaluation.
Course learning outcomes
On successful completion of this course, you should be able to:
1. demonstrate an indepth understanding of management accounting in managerial decisionmaking and control
2. comprehend and understand concepts of costing including activity based costing and
demonstrate ability to theoretically and practically argue appropriate costing systems
3. understand and argue the difference in the role between the management accountant and the
financial accountant.
Assessment (approved by Academic Board)
Examination
70%
Other Assessment
30%
100%
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CQU Course Profile for ACCT20053 2007 Term One
PART B
Continuous assessment / examination
In order to receive a passing grade in this course, you must satisfy ALL THREE following
requirements:
1. have completed all items of assessment
2. have obtained a score of 28 marks or more out of 70 (i.e. 40%) for Assessment Item 2
(Examination)
3. have obtained an aggregate mark of 50% or more while demonstrating sufficient quality of
performance to be considered satisfactory in relation to the objectives of the course.
Assessment for all students
Assessment for the course will be on the basis of:
Assessment item 1: Assignment
30%
Examination
70%
Thursday 03 May 2007
(Week 8)
Assessment and examination information are located in Part C of this Course Profile and are
available online to CQU staff and students only.
Textbooks
Textbook information shown is correct at Tuesday, March 27, 2007 at 06:00 PM. Please use this
link to obtain current and purchasing details:
http://content.cqu.edu.au/TeachingData/textbooks_view.do?term=2071&course=ACCT20053
Prescribed
•
Faculty of Business & Informatics 2006, Guide for students, 6th edn, Central Queensland
University, Rockhampton.
Note: The guide for students is available from the CQU Bookshop at a nominal cost or
available on the web at: http://fbi.cqu.edu.au/FCWViewer/view.do?page=492
Hansen, D & Mowen, M 2006, Cost management: accounting and control, 5th edn,
Thomson-Southwestern, Melbourne.
• Lignier, P 2006, ACCT2006: Cost and management accounting: study guide, Central
Queensland University, Rockhampton.
• Weerasooria, WS 2002, Business and law dictionary, 2nd edn, Butterworths, Sydney.
•
Do not rely on the CQU Library for set textbooks, as multiple copies are not available.
Contact details
Details shown are correct as at Tuesday, March 27, 2007 at 06:00 PM. Please use this link to
view current contacts:
http://lecturer.cqu.edu.au/lecturer.jsp?term=2071&course=ACCT20053
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CQU Course Profile for ACCT20053 2007 Term One
Rockhampton Coordinator:
Mr Graham Ivers
Contact details:
Phone: +61 07 4923 2782
Fax: +61 07 4923 2552
Address: Building 351/3.28 Faculty of Business and
Informatics Central City Campus Commonwealth Building
351 Central Queensland University Central Qld Mail Centre
ROCKHAMPTON QLD 4702
Email: [email protected]
Additional contact details
A directory of assistance containing important telephone numbers and other information for both
on-campus and off-campus students will be provided on the web, before term starts, at:
http://fbi.cqu.edu.au/FCWViewer/view.do?page=7
If you are unable to access the web for this information please telephone the relevant School
Administration Officer on (07) 49306725, (07) 49232788, or (07) 49309637 and a copy will be
provided.
Course presentation
Web mail
The university allocates every student an individual email address, the format of which is
[email protected] (e.g. [email protected]). This is the official
email address that the university will use for all email correspondence. Student emails can be
accessed through http://webmail.cqu.edu.au or http://mycqu.cqu.edu.au. Students are expected to
check their official email address on a frequent and consistent basis (at least once weekly).
Students are encouraged to review the new university policy relating to email communication at
http://policy.cqu.edu.au/Policy/policy.jsp?policyid=642 which has been introduced to ensure all
course and program updates are received.
Off campus students
The presentation for off-campus students includes:

Course Profile

Study Guide

Regular student access to email is recommended for this course

Regular student access to the Internet is recommended for this course

Course website is required – this is provided using the Learning Management System which
can be accessed through the MyCQU Student Portal: http://mycqu.cqu.edu.au/portal/dt. If
you have difficulty logging in, please contact Helpdesk on (07) 4930 9233. Further details for
the use of this online course are provided within the course.
On-campus students
The presentation for on-campus students includes:
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CQU Course Profile for ACCT20053 2007 Term One

1 x 2 hour lecture per week

1 x 2 hour tutorial per week

Course Profile

Study Guide

Regular student access to email is recommended for this course

Regular student access to the Internet is recommended for this course

Course website is required – this is provided using the Learning Management System which
can be accessed through the MyCQU Student Portal: http://mycqu.cqu.edu.au/portal/dt. If
you have difficulty logging in, please contact Helpdesk on (07) 4930 9233. Further details for
the use of this online course are provided within the course.
Students are expected to follow a self directed study schedule which meets the required deadlines.
Required resources
Guide for Students
Students should refer to the referencing style set out in Chapter 2 of the Faculty of Business and
Informatics 2006, Guide for students, 6th edition
Online resources
You must have access to the following online resources.
Regular student access to the online course website is required:
http://e-courses.cqu.edu.au/webapps/login
Optional resources
Purchase of additional resources is not compulsory.
Recommended references
Langfield-Smith, K, Thorne, H & Hilton, R 2006, Management accounting: information for managing and
creating value, 4th edn, McGraw-Hill, Sydney.
Blocher, E, Chen, K, Cokins, G & Lin, T 2005, Cost management: a strategic emphasis, 3rd edn, McGrawHill Irwin, Sydney.
Horngren, C, Datar, S & Foster, G 2006, Cost accounting: a managerial emphasis, 12th edn, PearsonPrentice Hall, Sydney.
Cotesta, P, Crosling, G, Murphy, H & Sands, J 2005, Writing and presenting in accounting, 2nd edn,
LexisNexis Butterworths, Sydney.
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CQU Course Profile for ACCT20053 2007 Term One
Web resources (suggested)
CPA Australia: http://www.cpaaustralia.com.au/cps/rde/xchg
The Institute of Chartered Accountants in Australia: http://www.icaa.com.au/
Institute of Certified Management Accountants (ICMA): http://aifm.com.au/cma.htm
The Chartered Institute of Management Accountants (UK): http://www.cimaglobal.com/
The Institute of Management Accountants (US): http://www.imanet.org/
Academic and professional journals
In the Black (formerly: Australian CPA), CPA Australia
Charter, Institute of Chartered Accountants in Australia
Chartered Accountants Journal of New Zealand (New Zealand Institute of Chartered Accountants)
Management Accounting (Chartered Institute of Management Accountants) (UK)
Management Accountant Quarterly (Institute of Management Accountants) (US)
Management Accounting Research
Journal of Management Accounting Research
Accounting Organizations and Society
Australian Accounting Review
Accounting Forum
Abacus
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CQU Course Profile for ACCT20053 2007 Term One
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CQU Course Profile for ACCT20053 2007 Term One
PART C
Proposed weekly schedule
Week
Week beginning
dates
Module/Topic
Chapter
Events and
submissions
1
5 March
Module 1: Introduction and basic
concepts
2
12 March
Module 2: Cost behaviour
3
3
19 March
Module 3: Cost accounting systems:
Job costing
5
4
26 March
Module 4: Cost accounting systems:
Process costing
6
5
2 April
Module 5: Based costing
4
6
10 April 07
Module 6: Cost allocation
7
7
23 April
Module 7: Cost planning and control
8,9
Module 7: Cost planning and control
8,9
8
30 April
9
8 May
Module 8: Volume profit analysis
17
10
14 May
Module 9: Tactical decision making
18
11
21 May
Module 10: Pricing and profitability
analysis
19
12
28 May
Revision
7 – 22 June
1, 2
Assessment
item 1 due 3
May
Examination
Examination Period
Note: A recess is held during term. Please consult the CQU Handbook for specific dates and other
information at:
http://handbook.cqu.edu.au
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CQU Course Profile for ACCT20053 2007 Term One
Assessment
Assignment submission
For Off-campus students, hard copy, signed assignments for this course may be submitted using the
Division of Teaching and Learning Services assignment submission system.
On-campus students should submit hard copy, signed assignments through their particular campus
submission system.
Policies and procedures for assessment
Students must familiarise themselves with the following policies and procedures:
Assessment and examination
policy and procedures
University Assessment of Coursework Policy
Assignment preparation and
presentation
Chapter 1 Guide for Students
http://fbi.cqu.edu.au/FCWViewer/view.do?page=492
Referencing style
Detailed information: Chapter 2 Guide for Students
http://fbi.cqu.edu.au/FCWViewer/view.do?page=492
Assignment submission
Chapter 1 Guide for Students
http://fbi.cqu.edu.au/FCWViewer/view.do?page=492
Applying for extensions
http://fbi.cqu.edu.au/FCWViewer/view.do?page=7
Assignment grading
http://fbi.cqu.edu.au/FCWViewer/view.do?page=7
Plagiarism policy
http://policy.cqu.edu.au/Policy/policy.jsp?policyid=198
Plagiarism detailed
explanation
Chapter 2 Guide for Students
http://fbi.cqu.edu.au/FCWViewer/view.do?page=492
http://policy.cqu.edu.au
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CQU Course Profile for ACCT20053 2007 Term One
Assessment details for all students
Assessment item 1
Due date:
3 May 2007
Weighting:
30 %
Length:
Nil for questions 1, 2 or 3
ASSESSMENT
1
1500 words for Q4
Objectives
This assessment item relates to the course learning outcomes numbers 1, 2 & 3 as stated in part A.
Question 1
Optic Vision Pty Ltd, a manufacturer of fibre-optic communications equipment, uses a job costing
system. Since the production process is heavily automated, manufacturing overhead is applied on the
basis of machine hours using a predetermined overhead rate. The current annual rate of $30 per machine
hour is based on estimated manufacturing overheads costs of $2 400 000 and an estimated cost driver
level of 80 000 machine hours.
Operations for the current year have been completed, and all the accounting entries have been made for
the year except the application of manufacturing overhead to the jobs worked on during December, the
transfer of costs from work in process to finished goods for the jobs completed in December, and the
transfer of costs from finished goods to cost of goods sold for the jobs that have been sold during
December. Summarised data as at 30 November, and for December, are presented in the following table.
Job numbers T11-007, N11-013 and N11-015 were completed during December. All completed jobs
except Job number N11-013 had been turned over to customers by the close of business on 31
December.
Work in Process: December activity
Job no.
Balance 30 November
Direct material
Direct labour
Machine hours
T11-007
$174 000
$3 000
$9 000
300
N11-013
$110 000
$8 000
$24 000
1 000
N11 015
0
$51 200
$53 400
1 400
D12-002
0
$75 800
$40 000
2 500
D12-003
0
$52 000
$33 600
800
$284 000
$190 000
$160 000
6 000
Totals
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CQU Course Profile for ACCT20053 2007 Term One
Operating activity
Activity to 30 November
December activity
Actual manufacturing overhead incurred:
Indirect material
$250 000
$18 000
Indirect labour
$690 000
$60 000
Utilities
$490 000
$44 000
Depreciation
$770 000
$70 000
$2 200 000
$192 000
Raw material purchases*
$1 930 000
$196 000
Direct labour cost
$1 690 000
$160 000
73 000
6 000
Total overhead
Other items:
Machine hours
Account balances at beginning 1 January:
Raw material inventory*
$210 000
Work in process inventory
$120 000
Finished goods inventory
$250 000
* Raw material purchases and raw material inventory consist of both direct and indirect materials. The
balance of the raw material inventory account as at 31 December is $170 000.
Required
1. How much manufacturing overhead would Optic Vision have applied to jobs to 30 November?
2. How much manufacturing overhead would be applied to jobs by Optic Vision during December?
3. Determine the amount by which the manufacturing overhead is overapplied or underapplied as at 31
December.
4. Determine the balance in Optic Vision’s finished goods inventory account on 31 December.
5. Prepare a schedule of cost of goods manufactured for Optic Vision Pty Ltd for the year.
(Hint: In calculating the cost of direct material used, remember that Optic Vision includes both
direct and indirect material in its raw material inventory account.)
Question 2
Kristina Pty Ltd, which manufactures quality paint sold at premium prices, uses a single production
department. Production begins with the blending of various chemicals, which are added at the beginning
of the process, and ends with the canning of the paint. Canning occurs when the mixture reaches the 90
per cent stage of completion. The litre cans are then transferred to the Shipping Department for crating
and shipment. Labour and overhead are added continually throughout the process. Manufacturing
overhead is applied on the basis of direct labour hours at the rate of $3 per hour.
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CQU Course Profile for ACCT20053 2007 Term One
Prior to May, when a change in the process was implemented, work in process inventories were
insignificant. The change in the process enables greater production but has resulted in significant
amounts of work in process for the first time. The company has always used the weighted average
method to determine equivalent units of production and unit costs. Now, production management are
considering changing from the weighted average method to the first in, first out method. The following
data relate to actual production during the month of May:
Costs for May
Work in process inventory, 1 May (4000 litres; 25% complete):
Direct material (chemicals)
$45 600
Direct labour ($10 per hour)
$6 250
Manufacturing overhead
$1 875
Costs incurred in May:
Direct material (chemicals)
$228 400
Direct material (cans)
$7 000
Direct labour ($10 per hour)
$35 000
Manufacturing overhead
$10 500
Production data for May
Litres
Work in process inventory, 1 May (25% complete)
4 000
Started in May
21 000
Sent to Shipping Department
20 000
Work in process inventory, 31 May (80% complete)
5 000
Required
1. Prepare a schedule of equivalent units for each cost element for the month of May using:
a)
the weighted average method
b)
the first in, first out (FIFO) method
2. Calculate the cost (to the nearest cent) per equivalent unit for each cost element for the month of
May using:
a)
the weighted average method
b)
the first in, first out (FIFO) method
3. Discuss the advantages and disadvantages of the weighted average method verses the first in, first
out method.
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CQU Course Profile for ACCT20053 2007 Term One
Question 3
Travel Smart Pty Ltd manufactures a complete line of fibreglass attaché cases and suitcases. The firm
has three manufacturing departments: Moulding, Component and Assembly. There are also two support
departments: Power and Maintenance. The sides of the cases are manufactured in the Moulding
Department. The frames, hinges and locks are manufactured in the Component Department. The cases
are completed in the Assembly Department. Varying amounts of material and time are required to
manufacture each type of case.
Travel Smart has always used a plantwide overhead rate. Direct labour hours are used to assign
overhead to products. The predetermined overhead rate is calculated by dividing the company’s total
estimated overhead by the total estimated direct labour hours to be worked in the three manufacturing
departments.
Jennifer Mason, manager of cost accounting, has recommended that Travel Smart use departmental
overhead rates. The planned operating costs and expected levels of activity for the coming year have
been developed by Mason and are presented by department in the following schedules. (All numbers are
in thousands.)
Manufacturing departments
Moulding
Component
Assembly
Departmental activity measures:
Direct labour hours
500
2 000
1 500
Machine hours
875
125
0
$24 800
$60 000
$2 500
$7 000
$40 000
$24 000
Manufacturing overhead
$42 000
$32 400
$45 200
Total departmental costs
$73 800
$132 400
$71 700
Departmental costs:
Direct material
Direct labour
Use of support departments
Moulding
Component
Assembly
Maintenance:
Estimated labour hours for the
coming year
90
25
10
360
320
120
Power (in kilowatt hours):
Estimated usage for the coming
year
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CQU Course Profile for ACCT20053 2007 Term One
Support departments
Power
Maintenance
Departmental activity measures:
Estimated usage for the coming
year
800 kWh
125 labour hours
$10 000
$3 000
Variable labour
$2 800
$4 500
Fixed overhead
$24 000
$500
Total support department costs
$36 800
$8 000
Departmental costs:
Materials and supplies (variable)
Required:
1.
2.
3.
a)
Calculate the plantwide overhead rate for Travel Smart for the coming year using the same
method as used in the past.
b)
Estimate the overhead cost of an Elite attaché case that requires 4 direct labour hours and 5
machine hours in the Moulding Department, 3 direct labour hours in the Component
Department and 2 direct labour hours in the Assembly Department.
Jennifer Mason has been asked to develop departmental overhead rates for comparison with the
plantwide rate. The following steps are to be followed in developing the departmental rates:
a)
Allocate the total Maintenance Department costs to the three manufacturing departments,
using the direct method.
b)
Allocate the Power Department costs to the three manufacturing departments, using the
direct method.
c)
Calculate departmental overhead rates for the three manufacturing departments, using a
machine hour cost driver for the Moulding Department and a direct labour hour cost driver
for the Component and Assembly Departments.
Estimate the overhead cost of the Elite attaché case using the departmental overhead rates.
Question 4
(a)
The XYZ Corporation has gradually expanded its business. Management now believes that it is
appropriate to further strengthen the Accounting Group within the business. It is considering separating
out the roles of the Financial Accountant and the Management Accountant.
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CQU Course Profile for ACCT20053 2007 Term One
Required
As a consultant, you have been asked to prepare a report that clearly shows the different roles that could
be played by each of these appointments within the organisation.
(b)
Suppose that XYZ goes ahead with the separation of the duties and that a Financial Accountant
and a Management Accountant are appointed. Bill White is appointed as the Management Accountant.
On taking up the position and doing a review of the Accounting system currently in place, he is
currently considering the introduction of an Activity Based Costing System into the organisation. Rather
than just make a decision based on intuition, he feels that there should be some more definite way that
can assist in the determination on whether to introduce the Activity Based Costing system or not.
Required
Prepare a report that should provide Bill with matters that should assist him in the determination.
(c)
Now suppose that after due consideration Bill has decided to introduce the Activity Based
Costing system.
Required
What are the issues that Bill will have to address in the implementation of the Activity Based Costing
System?
Note related to Question 4
In the preparation of the reports for this question, you must provide evidence of research. This must
extend well beyond the set text. As evidence of the research, you must carry out referencing as provided
within the Guide for Students, a copy of which is available at the Faculty web site. Any material drawn
from another source and not properly referenced will be processed through the University policy on
Plagiarism.
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CQU Course Profile for ACCT20053 2007 Term One
Assessment criteria
ACCT20053 Marking Scheme
Criteria
Marks Available
Marks Awarded
Question 1
Applying
manufacturing
overhead to jobs to 30
November
5.0
Applying
manufacturing
overhead to jobs during
December
5.0
Manufacturing
overhead overapplied
or underapplied as at 31
December.
5.0
Balance in finished
goods inventory
account on 31
December.
5.0
Schedule of cost of
goods manufactured for
the year.
5.0
Total Q 1
25.0
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Comments
CQU Course Profile for ACCT20053 2007 Term One
Question 2
Schedule of equivalent
units for each cost
element for the month
of May using:
15.0
a) the weighted average
method
b) the first in, first out
(FIFO) method
The cost (to the nearest
cent) per equivalent unit
for each cost element
for the month of May
using:
15.0
a) the weighted average
method
b) the first in, first out
(FIFO) method
Advantages and
disadvantages of the
weighted average
method verses the first
in, first out method.
10.0
Total Q 2
40.0
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CQU Course Profile for ACCT20053 2007 Term One
Question 3
The plantwide overhead
rate for the coming year
5.0
Estimate the overhead
cost
5.0
Allocation of the total
Maintenance
Department costs
7.5
Allocation of the Power
Department costs
7.5
Calculation of the
departmental overhead
rates
5.0
Estimate the overhead
cost the departmental
overhead rates.
5.0
Total Q3
35.0
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CQU Course Profile for ACCT20053 2007 Term One
Question 4
Executive Summary for
consultant’s report
2.5
Table of Contents for
Consultant’s report
5.0
Consultant’s report that
clearly shows the
different Accounting
roles
10.0
Report on the
introduction of an
Activity Based Costing
system
10.0
Issues related to the
implementation of an
Activity Based Costing
System
10.0
Use of sub-headings
2.5
Spelling and grammar
5.0
References and list of
references.
5.0
Total Q4
Total for assignment
Mark out of
50.0
150.0
30.0
Comments:_________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
Lecturer’s Signature:_____________________________ Date:_______________________________
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CQU Course Profile for ACCT20053 2007 Term One
Examination
Due date:
Examination period 7 – 22 June 2007
Weighting:
70%
Length:
Duration 3 hours.
There is an examination for this course.
The examination will be held during the examination period as set out in the Calendar of principal dates
which can be located in the Handbook. Students should also refer to the Handbook for rules relating to
examinations.
The examination is closed-book

Closed-book means you are not permitted to take any materials into the examination room with
you.
You may take a non-electronic translation-only dictionary into the examination room in accordance
with CQU policy.
You may take a non-programmable, non-text-retrievable silent-only calculator into the examination
room in accordance with CQU policy.
View important examination information at:
http://handbook.cqu.edu.au/Handbook/information.jsp?id=126
The examination timetables will be made available later in the term.
View examination timetable at:
http://www.cqu.edu.au/studinfo/admin/timetabling/index.htm
Further information on the examination will be available on your course website during term
and within your revision lecture.
Students should also not that if Supplementary Assessment is granted, this will in many cases
take the form of a Supplementary Examination as is required for professional body
accreditations.
NOTE: The examination information provided in this Course Profile also relates to Deferred
Exams. No separate advice will be provided in the case of a deferred exam.
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