BUS 555
              Accounting for Managers
Day and Dates of Course:                          Saturday (September 9 – Oc...
Grading Scale

Grading Scale

A = 100% to 92.5%                          B = 86.4% to 82.5%                        C = 76....
Waynesburg College

                          BUS 555

                 Accounting for Managers

                     Clas...
Chapter 2
Financial Statements: An Overview
Learning Objectives

After studying this chapter, the student should be able t...
Chapter 3
The Mechanics of Accounting
Learning Objectives

After studying this chapter, the student should be able to:

1....
Chapter 5
Introduction to Financial Statement Analysis

Learning Objectives

After studying this chapter, the student shou...
Chapter 14
Statement of Cash Flows
Learning Objectives

After studying this chapter, the student should be able to:


1.  ...
Chapter 15
Introduction to Management Accounting
Learning Objectives

After studying this chapter, the student should be a...
Chapter 16
Analyzing Cost-Volume-Profit Relationships
Learning Objectives

After studying this chapter, the student should...
Chapter 17
Product Cost Flows and Business Organizations
Learning Objectives

After studying this chapter, the student sho...
Chapter 21
Traditional Cost Management
Learning Objectives

After studying this chapter, the student should be able to:

1...
Chapter 19
Planning
Learning Objectives

After studying this chapter, the student should be able to:

1.    Describe diffe...
Chapter 23
Evaluating Products and Processes
Learning Objectives

After studying this chapter, the student should be able ...
Chapter 20
Evaluating Personnel and Divisions
Learning Objectives

After studying this chapter, the student should be able...
Chapter 18
Capital Investment Decisions
Learning Objectives

After studying this chapter, the student should be able to:

...
Waynesburg College
                         BUS 555 - ACCOUNTING FOR MANAGERS


Instructor:     Raymond L Vargo           ...
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Waynesburg College

  1. 1. BUS 555 Accounting for Managers Day and Dates of Course: Saturday (September 9 – Oct 28) Class Site: Southpointe Required Text(s): Accounting: Concepts and Applications, 9th edition by Albrecht, Stice, Stice, & Swain. ISBN: 0324187564 Facilitator: Raymond L Vargo Contact Information: 412-624-1199 work 412-302-3765 cell raymondlvargo@comcast.net Facilitator Bio: Mr. Raymond L. Vargo is the Senior Management Consultant for the University of Pittsburgh Small Business Development Center (SBDC). Ray has received certification by The National Development Council as an Economic Development Finance Professional. He currently is a member of the Urban Redevelopment Authority of Pittsburgh and the Allegheny County Department of Economic Development loan review committees. Currently, Mr. Vargo is a member of the Board of Director of CL 504, Inc. Prior to his current position with the University of Pittsburgh SBDC, he worked at California University of Pennsylvania’s Entrepreneurial Assistance Center. Mr. Vargo is an adjunct faculty member for the University of Pittsburgh and Waynesburg College - teaching courses in accounting and small business management at both the graduate and undergraduate levels. He received his BS in Accounting with a minor in Business Logistics from The Pennsylvania State University and his MBA from California University of Pennsylvania. Facilitator Attendance Policy: Discussed in class Policy For Make-up work and Late Discussed in class Assignments: Extra Credit Assignments: Not applicable.
  2. 2. Grading Scale Grading Scale A = 100% to 92.5% B = 86.4% to 82.5% C = 76.4% to 72.5%. A- = 92.4.% to 89.5% B- = 82.4% to 79.5% C- = 72.4% to 69.5%. B+ = 89.4% to 86.5% C+ = 79.4% to 76.5% Graduate Courses do not offer a passing grade below a C or C-. Course Requirements and Points/Percentages Classroom discussion and workshop 100 points Midterm Exam 50% of Total Grade participation: Clarity of expression in written assignments: 100 points Final Exam 50% of Total Grade Other: Total: 200 Points Additional Information and/or Directions Assignments and Activities Assignment Prior to Start of First Class: In preparation for the first night of class, please read chapters 2 and 3 and attempt to solve the following exercises: Chapter 2 E2-1, E2-5, E2-6, E2-7, E2-8, E2-9, E2-11, E2-12 Chapter 3 E3-2, E3-3, E3-5, E3-6, E3-7, E3-8, E3-9, E3-14 In order to help you understand the assigned exercises, I will send you the solutions via email. Please forward your email address to me by August 25, 2006 to the following address: raymondlvargo@comcast.net Please note BUS 555 in the Subject line. I strongly suggest that you bring a calculator, pencils, erasers, and extra paper to class. If you have any questions or concerns please feel free to contact me at 412-302-3765.
  3. 3. Waynesburg College BUS 555 Accounting for Managers Class Module Week Chapter Subject 1 2 Financial Statements: An Overview 3 The Mechanics of Accounting 2 14 Statement of Cash Flows 5 Introduction to Financial Analysis 3 15 Introduction to Management Accounting 16 Analyzing Cost-Volume-Profit Relationships 4 GROUP MIDTERM EXAM 5 17 Product Cost Flows and Business Organizations 21 Traditional Cost Management 6 19 Planning 23 Evaluating Products and Processes 7 20 Evaluating Personnel and Divisions 18 Capital Investment Decisions 8 FINAL EXAM
  4. 4. Chapter 2 Financial Statements: An Overview Learning Objectives After studying this chapter, the student should be able to: 1. Understand the basic elements and formats of the three primary financial statements – the balance sheet, income statement, and statement of cash flows. 2. Recognize the need for financial statement notes and identify the types of information included in the notes. 3. Describe the purpose of an audit report and the incentives the auditor has to perform a good audit. 4. Use financial ratios to identify a company’s strengths and weaknesses and to forecast its future performance. 5. Explain the fundamental concepts and assumptions that underlie financial accounting. Prior coming to class, the student should attempt to solve the following exercises: Exercise 2-1 Classification of Financial Statement Elements Exercise 2-5 Balance Sheet Relationships Exercise 2-6 Balance Sheet Preparation Exercise 2-7 Income Statement Computations Exercise 2-8 Income Statement Preparation Exercise 2-9 Preparation of Income Statement and Retained Earnings Statement Exercise 2-11 Retained Earnings Computations Exercise 2-12 Preparation of Income Statement and Retained Earning Statements
  5. 5. Chapter 3 The Mechanics of Accounting Learning Objectives After studying this chapter, the student should be able to: 1. Understand the process of transforming transaction data into useful accounting information. 2. Analyze transactions and determine how those transactions affect the accounting equation (step one of the accounting cycle). 3. Record the effects of transactions using journal entries (step two of the accounting cycle). 4. Summarize the resulting journal entries through posting and prepare a trial balance (step three of the accounting cycle). 5. Describe how technology has affected the first three accounting cycle. Prior coming to class, the student should attempt to solve the following exercises: Exercise 3-2 Accounting Elements: Increase/Decrease, Debit/Credit Relationships Exercise 3-3 Expanded Accounting Equation Exercise 3-4 Classification of Accounts Exercise 3-5 Normal Account Balances Exercise 3-6 Journalizing Transactions Exercise 3-7 Journalizing Transactions Exercise 3-8 Journal Entries Exercise 3-9 Posting Journal Entries Exercise 3-14 Trial Balance
  6. 6. Chapter 5 Introduction to Financial Statement Analysis Learning Objectives After studying this chapter, the student should be able to: 1. Explain the purpose of financial statement analysis. 2. Understand the relationships between financial statement numbers and use ratios in analyzing and describing a company’s performance. 3. Use common-size financial statements to perform comparison of financial statements across years and between companies. 4. Understand the DuPont framework and return on equity can be decomposed into its profitability, efficiency, and leverage components. 5. Use cash flow information to evaluate to evaluate cash flow ratios. 6. Understand the limitations of financial statement analysis. Prior coming to class, the student should attempt to solve the following exercises: Exercise 5-1 Computation of Ratios Exercise 5-4 Common-Size Income Statement Exercise 5-5 Common-Size Balance Sheet Exercise 5-8 Income Statement Analysis Exercise 5-10 DuPont Framework Exercise 5-11 DuPont Framework Exercise 5-12 DuPont Framework Exercise 5-13 DuPont Framework
  7. 7. Chapter 14 Statement of Cash Flows Learning Objectives After studying this chapter, the student should be able to: 1. Understand the purpose of a statement of cash flows. 2. Recognize the different types of information reported in the statement of cash flows 3. Prepare a simple statement of cash flows. 4. Analyze financial statements to prepare a statement of cash flows. 5. Use information from the statement of cash flows to make decisions. Prior coming to class, the student should attempt to solve the following exercises: Exercise 14-1 Classification of Cash Flows Exercise 14-2 Classification of Cash Flows Exercise 14-5 Preparing a Simple Cash Flow Statement Exercise 14-8 Cash Flows From Operations (Direct Method) Exercise 14-14 Net Cash Flows (Indirect Method) Exercise 14-15 Net Cash Flows (Direct Method) Exercise 14-16 Statement of Cash Flows (Indirect Method) Exercise 14-17 Statement of Cash Flows (Direct Method)
  8. 8. Chapter 15 Introduction to Management Accounting Learning Objectives After studying this chapter, the student should be able to: 1. Understand the essential differences between management accounting and financial accounting, as illustrated by managerial use of the ROI formula. 2. Understand that successfully managing a company requires good information that supports effective. 3. Know the concepts of fixed and variable costs are used in C-V-P analysis in the management planning process. 4. Realize how the product cost classifications of direct materials, direct labor, and overhead are used in the management controlling process. 5. Be able to perform a simple segment analysis using the concepts of direct, indirect, and opportunity costs in the management evaluating process. 6. Understand that management accounting still continues to evolve. Prior coming to class, the student should attempt to solve the following exercises: Exercise 15-4 Period Costs and Product Costs Exercise 15-5 Manufacturing Costs Exercise 15-8 Cost Classifications Exercise 15-9 Cost Classifications Exercise 15-10 C-V-P Analysis Exercise 15-11 C-V-P Analysis Exercise 15-17 C-V-P Analysis Exercise 15-18 Product Cost
  9. 9. Chapter 16 Analyzing Cost-Volume-Profit Relationships Learning Objectives After studying this chapter, the student should be able to: 1. Understand the key factors involve in cost-volume-profit (C-V-P) analysis and why it is such an important tool in management decision making. 2. Explain and analyze the basic cost behavior patterns- variable, fixed, mixed, and stepped. 3. Analyze mixed costs using the scattergraph and high-low methods. 4. Perform C-V-P analyses, and describe the effects potential changes in C-V-P variables have on company profitability. 5. Visualize C-V-P relationships using graphs. 6. Identify the limiting assumptions of C-V-P analysis, and explain the issues of quality and time relative to C-V-P analysis decisions. Prior coming to class, the student should attempt to solve the following exercises: Exercise 16-1 Variable and Fixed Costs Over the Relevant Range Exercise 16-2 Fixed Costs – The Relevant Range Exercise 16-5 High-Low of Analyzing Mixed Costs Exercise 16-6 High-Low Method of Analyzing Mixed Costs Exercise 16-7 Contribution Margin Calculations Exercise 16-8 Contribution Margin Income Statement Exercise 16-10 Analysis of the Contribution Margin Exercise 16-12 Break-Even Point and Target Income Exercise 16-17 C-V-P Analysis Exercise 16-18 C-V-P – Change in Variables
  10. 10. Chapter 17 Product Cost Flows and Business Organizations Learning Objectives After studying this chapter, the student should be able to: 1. Understand the difficulty, yet importance of having accurate product cost information. 2. Explain the flow of goods and services in a manufacturing organization of product costs in its accounting system. 3. Understand the process of accounting for overhead. 4. Explain the flow of goods and services in a merchandising organization and follow the accumulation of product costs in its accounting. 5. Explain the flow of goods and service organization and follow the accumulation of product costs in its accounting system. 6. Understand the impact of e-business on product costs. 7. Use the FIFO method to do process costing. Prior coming to class, the student should attempt to solve the following exercises: Exercise 17-2 Manufacturing Costs Exercise 17-3 Predetermined Manufacturing Overhead Rates Exercise 17-6 Flow of Manufacturing Costs Exercise 17-8 Applying Manufacturing Overhead Exercise 17-11 Analyzing Manufacturing Costs Exercise 17-12 Total Manufacturing Costs and Cost of Goods Manufactured Exercise 17-13 Total Manufacturing Costs and Cost of Goods Manufactured/Sold Exercise 17-16 Predetermined Service Overhead Rates Exercise 17-17 Applying Overhead
  11. 11. Chapter 21 Traditional Cost Management Learning Objectives After studying this chapter, the student should be able to: 1. Outline the different cost flow patterns in manufacturing, merchandising, and service organizations and understand how these costs are reflected in the income statement and balance sheet. 2. Interpret a cost of goods manufactured schedule and analyze the levels of raw materials, work-in-process, and finished goods inventories in a manufacturing organizations. 3. Understand how merchants manage cost information in their organizations. 4. Measure profitability and personnel utilization in a service organization. 5. Calculate and interpret holding costs in merchandising and service businesses. 6. Use classic quantitative tools in inventory management (economic order quantity, reorder point and safety stock). Prior coming to class, the student should attempt to solve the following exercises: Exercise 21-1 Inventory Turnover in a Manufacturing Company Exercise 21-2 Inventory Turnover in a Merchandising Company. Exercise 21-5 Analysis of Return on Inventory Investment Exercise 21-7 Personnel Utilization in a Service Organization Exercise 21-9 Financial Holding Costs Exercise 21-12 Reorder Point Exercise 21-13 Economic Order Quantity
  12. 12. Chapter 19 Planning Learning Objectives After studying this chapter, the student should be able to: 1. Describe different types of budgeting and identify the purposes of budgeting. 2. Describe the budgeting process and its behavior implications. 3. Explain the master budget and its components for manufacturing firms, merchandising firms, and service firms. 4. Prepare pro-forma financial statements. 5. Distinguish between static and flexible budgets. Prior coming to class, the student should attempt to solve the following exercises: Exercise 19-1 Personal Budgeting Exercise 19-4 Production Budgeting Exercise 19-5 Production Budgeting Exercise 19-6 Direct Materials Budgeting Exercise 19-8 Direct Labor Budgeting Exercise 19-13 Cash Budgeting Exercise 19-14 Cash Budgeting for a Service Company Exercise 19-15 Cash Budgeting Exercise 19-16 Pro-Forma Income Statement
  13. 13. Chapter 23 Evaluating Products and Processes Learning Objectives After studying this chapter, the student should be able to: 1. Explain how evaluation leads to planning and why products and processes must be continuously evaluated. 2. Understand why benchmarking is so important and how it is conducted. 3. Understand the concept of differential costs and revenues, and be able to identify those costs and revenues that are relevant to making product and process decisions. 4. Identify several examples of products and process evaluation decisions, and be able to analyze and select the best alternative for each example. 5. Understand theory of constraints and how focusing on scarce resources can direct activities in manufacturing companies. Prior coming to class, the student should attempt to solve the following exercises: Exercise 23-2 Relevant Costs Exercise 23-5 Make-or-Buy Decisions Exercise 23-6 Make-or-Buy Decisions Exercise 23-7 Make-or-Buy Decisions Exercise 23-8 Purchasing Services from Outside Exercise 23-11 Discontinuing a Product Line Exercise 23-12 Adding a New Product
  14. 14. Chapter 20 Evaluating Personnel and Divisions Learning Objectives After studying this chapter, the student should be able to: 1. Explain why evaluating personnel and divisions is such an important activity in organizations. 2. Identify different kinds of organizational units in which evaluation occurs. 3. Explain how performance is evaluated in cost centers. 4. Explain how performance is evaluated in profit centers. 5. Explain how performance is evaluated in investment centers. 6. Compute and interpret variable overhead variance in costs centers. Prior coming to class, the student should attempt to solve the following exercises: Exercise 20-2 Materials Price Variance Exercise 20-3 Materials Price and Quantity Variances – Journal Entries Exercise 20-6 Materials Price and Quantity Variances Exercise 20-8 Labor Rate and Efficiency Variance Exercise 20-10 Labor Variances Exercise 20-12 Labor Variances Exercise 20-15 Measuring Performance with Segment and Contribution Margins Exercise 20-17 Revenue Variances Exercise 20-18 Return on Investment Exercise 20-19 Return on Investment Exercise 20-20 Measuring Performance: Residual Income and ROI
  15. 15. Chapter 18 Capital Investment Decisions Learning Objectives After studying this chapter, the student should be able to: 1. Understand the importance of capital budgeting and the concepts underlying strategic and capital investment decisions. 2. Describe and use two nondiscounted capital budgeting techniques: the payback method and the unadjusted rate of return method. 3. Describe and use two discounted capital budgeting techniques: the net present value method and the internal rate of return method. 4. Understand the need for evaluating qualitative factors in strategic and capital investments decisions. 5. Use sensitivity analysis to assess the potential effects of uncertainty in capital budgeting. 6. Explain how to use capital budgeting techniques in ranking capital investment projects. 7. Explain how income taxes affect capital budgeting decisions. Prior coming to class, the student should attempt to solve the following exercises: Exercise 18-1 Present Values Exercise 18-5 Net Present Value Method Exercise 18-7 Internal Rate of Return Exercise 18-9 Net Present Value and Internal Rate of Return Exercise 18-13 Sensitivity Analysis Exercise 18-15 Ranking Projects
  16. 16. Waynesburg College BUS 555 - ACCOUNTING FOR MANAGERS Instructor: Raymond L Vargo Phone: 412-302-3765 or 412-624-1199 PURPOSE OF COURSE: The primary objective of the course is to provide an opportunity for the student to learn some of the ways in which accounting information may be utilized to solve common business management problems. REQUIRED TEXT: Accounting: Concepts and Applications, 9th edition by Albrecht, Stice, Stice, and Swain. ATTENDANCE: Due to the accelerated nature of the MBA program it is critical that you attend each class. Although there are no penalties if you miss class, traditionally those who miss receive lower grades. HOMEWORK: Each week two chapters will be covered. Prior to coming to class the student is expected to attempt to solve the homework exercises stated in the syllabus. I do not collect the homework but the exercises that are discussed in class are similar to questions on the exams. Please keep in mind these exercises have been selected to assist you in understanding the key element of each chapter. Do not get frustrated if you cannot solve some of the exercises – that is why there is class! GRADING: Your grade will be determined using two forms of evaluation. 1) Group Midterm Exam – 1/2 of Total Grade 2) Final Exam – 1/2 of Total Grade COURSE OUTLINE: Week Chapter Week of Homework Exercises 1 2 9-Sep-06 E2-1, E2-5, E2-6, E2-7, E2-8, E2-9, E2-11, E2-12 3 9-Sep-06 E3-2, E3-3, E3-5, E3-6, E3-7, E3-8, E3-9, E3-14 2 14 16-Sep-06 E14-1, E14-2, E14-5, E14-8, E14-14, E14-15, E14-16, E14-17 5 16-Sep-06 E5-1, E5-4, E5-5, E5-8, E5-10, E5-11, E5-12, E5-13 3 15 23-Sep-06 E15-4, E15-5, E15-8, E15-9, E15-10, E15-11, E15-17, E15-18 16 23-Sep-06 E16-1, E16-2, E16-5, E16-6, E16-7, E16-8, E16-10, E16-12, E16-17, E16-18 4 30-Sep-06 Group Exam 5 17 7-Oct-06 E17-2, E17-3, E17-6, E17-8, E17-11, E17-12, E17-13, E17-16, E17-17 21 7-Oct-06 E21-1, E21-2, E21-5, E21-7, E21-9, E21-12, E21-13 7 19 14-Oct-06 E19-1, E19-4, E19-5, E19-6, E19-8, E19-13, E19-14, E19-15, E19-16 23 14-Oct-06 E23-2, E23-5, E23-6, E23-7. E23-8, E23-11, E23-12 7 20 21-Oct-06 E20-2, E20-3, E20-6, E20-8, E20-10, E20-12, E20-15, E20-17, E20-18, E20-19, E20-20 18 21-Oct-06 E18-1, E18-5, E18-7, E18-9, E18-13, E18-15 8 28-Oct-06 FINAL EXAM

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