MADDAWALABU UNIVERSITY
BUSINESS AND ECONOMICS FACULTY
ACCOUNTING AND FINANCE PROGRAM
Course code AcFn2091
Course Title Cost and Management Accounting –I
Degree Program BA Degree in management
Lecturer Hussen
ETCTS Credits 5
Course Objectives & Competences to be Acquired
After successfully completing this course, the students should be able to:
o Describe and make use of the basic principles and practices of cost accounting.
o Differentiate cost accounting , management accounting and financial accounting
o Apply appropriate costing system to determine the cost of various cost objects.
o Apply for spoilage, reworked units, and scrap in job and process costing system.
o Determine cost of the product or service using job order costing , process costing and Activity Based
Costing
Course Description
Modern businesses needs frequent information about business activities to plan accurately for the future,
control business results, and make a proper appraisal of the performance of persons working in an
organization. The fulfillment of their goals requires details about the costs incurred and benefits
(revenues) obtained which are provided by what is known as “Cost Accounting”.
1. Introduction
1.1 Purpose of an accounting system
1.2 The role of an accountant
1.3 Accounting and the management process
1.4 Financial Accounting, cost accounting and Management accounting.
1.5 Cost benefit philosophy and behavioral considerations in management accounting systems
1.6 Management accounting in service organizations
2. Introduction to cost terms and cost classifications
2.1 Cost in general
2.2 Cost object and cost driver
2.3 Cost accumulation, assignment and tracing/Allocation.
2.4 Classification of costs
3 Job, process and operation costing
3.1 Concepts: costing system, cost pool, cost allocation bases
3.2 Job order costing system features
3.3 Accounting procedures for job order costing system.
3.4 Process costing system features
3.5 Job order costing system- - illustration
3.6 Process costing system
3.6.1. Illustration (WA & FIFO methods)
3.6.2. Spread sheet application of process costing
3.7 Problems of overhead application
3.8 Operations costing
4 Spoilage, reworked units and scrap
1
4.1 Spoilage, rework and scrap in general
4.2 Process costing and spoilage
4.3 Job order costing and spoilage
4.4 Reworked units
4.5 Accounting for scrap
5. Cost Allocation
5.1. Cost Allocation –in General
5.2. General Purpose of Cost Allocation
5.3. Allocation for economic decisions and motivations
5.4. Cost allocation Methods
5.5. The contribution approach to cost allocation
Teaching & Learning Methods/strategy
The teaching and learning methodology include lecturing, discussions, problem solving, and analysis.
Take-home assignment will be given at the end of each chapter for submission within a week. Solution to
the assignments will be given once assignments are collected. Cases with local relevance will also be
given for each chapter for group of students to present in a class room. Practical application of cost
accounting in Ethiopian manufacturing firms (to be done by students in the form of term paper). The full
and active participation of students is highly encouraged.
Assessment/Evaluation
The evaluation scheme will be as follows:
Test-1 Test-2 Quiz1 Assignment-1 Final Total
15% 15% 10% 20% 40% 100%
Roles of the Instructor
He/she will come to the class regularly on time and deliver the lecture in a well-organized manner.
Besides, at the end of each class he/she gives reading assignment for the next class. He/she will make sure
that proper assessments is given. He/she is also responsible to give feedback for each assessment.
Roles of the students
The success of this course depends on the students’ individual and collective contribution to the class
discussions. Students are expected to participate voluntarily, or will be called upon, to contribute to set
exercises and problems. Students are also expected to read the assigned readings and prepare the cases
before each class so that they could contribute effectively to class discussions. Students must attempt
assignments by their own.
Proficiency in this course comes from individual knowledge and understanding. Copying the works of
others is considered as serious offence and leads to disciplinary actions.
Text and reference books
Text Book:
1. Horngren, Foster, &Datar. Cost Accounting: A Managerial Emphasis. 9th Ed. 1997
2. Horngren, Sunden& Stratton. Introduction to Management Accounting. 11th Ed. 1999
Reference Books
1. C.T Homgren, Introduction to Management Accounting 4th to 8th editions, 1999 USA
2. C.T. Homgren, Cost Accounting: A Managerial Emphasis 5th to 8 th ecitionsprentice Hall Inc.
1982 to 1994
3. Homgren, foster, &Datar, Cost Accounting A Managerial Emphasis. 10 thEcition
4. L.E. Heitger Managerial Accounting 1th and 2 nd editions, McGraw Hill , 1998, India
5. GetuJemaneh, Management Accounting 1996.
6. Ray H.Garrison, Managerial Accounting. 6th edition
