1st SEMESTER

FULL-TIME MBA PROGRAM

COST & MANAGEMENT ACCOUNTING
Course Outline
LECTURER. Tola Owolabi,

FCA, M.Phil.

Phone No & E-mail: (offices)

0803-3528333 (Mobile), 01-320695-8, 01-4616170-2
ADMINISTRATIVE INFORMATION
The course is divided into about 27 class sessions during the semester with Tola handling all of
the sessions and the Lecturer in charge of the course. You can reach me on the phone lines
above. Akintola is a full-time at the school. Generally, it is easy to have an on-the-spot telephone
chat or personal chat with us at the school any day and time especially if you make a request
before hand.
COURSE OBJECTIVE
This course is developed from Management Accounting. It is an introductory course to Strategic
Cost Management in business. The increasingly competitive pressures that companies face has
changed the way managers manage, causing a fundamental change in their management
information requirement. Different types of information are required for decisions on pricing,
product and customer mix, including information on resources consumed. Unfortunately the
conventional cost and management accounting systems are unable to supply the relevant
information, inflexible (being rather routine), and failed to consider the firms strategy. Strategic
Cost Management developed from the attempt to address the shortcomings of the conventional
cost and management accounting systems.
This course is developed on the central theme that management accounting exists within a
business primarily to facilitate the development and implementation of the business strategy. As
managers in business, this course aims to provide you with knowledge of the multiplicity of roles
management accounting information can play in driving a business. In this regard the course has
been divided into two segments Uses of Cost & Management Accounting Reports/Information
and Design of Cost & Management Accounting Systems. This underlines the need for operating
managers to have knowledge of the various uses to which cost & management accounting
reports/information could be put. In addition, they should, being the operating officer, not only
determine their need for reports/information, but also design the systems that produce the
reports.
All through the course, whether we are dealing with Uses of Reports or Design of Systems, they
would be anchored on the three key themes of the course, which developed from the central

theme that cost & management accounting exists within a business primarily to facilitate the
development and implementation of the business strategy:

Value Chain Analysis: This has a focus going beyond the firm; starting from the suppliers to
the various internal value-creating activities or operations linked with the final product or
service delivered to customers. Here, cost analysis, does not start with purchases; thereby
not missing the linkages with the firms suppliers, and also does not stop at sales; thereby
not missing the linkages with the firms customers. Some of the issues handled here would
include production resources and inputs, capacity, make or buy opportunity costs and sunk
costs.

* Strategic Positioning Analysis: Here we would obtain an understanding of how a firm has chosen
to compete and see what role management accounting information play, in either executing the
chosen strategy or in developing a strategy. The recurring issue would be the competitive
strategy of the business i.e. cost leadership or product differentiation competitive strategy.
* Cost Driver Analysis: Here we would obtain an understanding of the revenue and cost structure
of the business or product, and the revenue and cost behavior i.e. of the various revenue and
cost drivers as well as how to manage them to obtain sustainable competitive cost advantage.
The recurring issues would include cost control/reduction and cost cutting as well as corporate
or product line rationalization, and revenue potential optimization.
COURSE FORMAT
The course will consist principally of discussion of cases which would require strong financial
figures support and consideration of relevant non-financial information/issues. None of the case
analyses will be collected: the individuals personal desire to master the material and learn should
be incentive enough to do them.
It is important that you set up and follow a regular study schedule right from day one. No prior
knowledge of accounting is required: accounting is often called (and not just by accountants) the
language of business, so no serious difficulty should be encountered. As with the study of any
language, to become proficient requires constant practice, starting from the first day. We
recommend this trick.
The weekly Time Table indicates the topics and materials to read and prepare for each class
session.
COURSE MATERIALS
The principal course materials of package of Cases and Technical Notes will be issued (some
periodically say every week during the semester). Case preparation and class discussion may
require first reading the accompanying technical note in order to obtain an understanding of the
required cost or managerial accounting knowledge. Relevant articles published in reputable
professional journals may also be distributed to you.
Other than interesting stories cut out from the financial press that may be circulated for your
reading pleasure, no other texts or materials are recommended.

COURSE EVALUATIONS
The objective is to help the student learn on his/her own and from others; as well as them
learning from him/her. Experience from using the Case Method in learning has shown that the
simple trick is exhaustive individual preparation of assigned materials (cases and technical
notes), effective group meetings and involved class participation. The amount of learning you get
greatly depends on your efforts during these three activities. In this regard your course grade will
be based on Class participation 40% and Exams 60% made up of; Mid-Semester exam 20% and
Final exam 40%. (Note: the mid-semester exam may be cancelled in which case the Final Exam
will be 60 %.)
We think the most important thing is learning and enjoying doing it! Not so?
Thanks and bye for now. This course is interesting. We look forward to seeing you.
AKINTOLA OWOLABI

(Note: Expect some changes in the course of the semester)

SESSION

ASSIGNED WORK

LECTURER
PART A:

USES OF COST & MANAGEMENT ACCOUNTING

REPORTS/INFORMATION

SESSION # 1

Owolabi
Introduction and Lecture
Prepare:

---

Read: CN-147-E Cost Structures and Definitions

Brief Introduction to Cost Accounting
Strategic Cost Management: Definition and Overview
Strategic Cost Management: The Three Key Themes
SESSION # 2

Owolabi
Introduction and Lecture
Prepare:

---

Read: CN-147-E Cost Structures and Definitions

Brief Introduction to Cost Accounting
Strategic Cost Management: Definition and Overview
Strategic Cost Management: The Three Key Themes
SESSION # 3

Owolabi
Introduction and Lecture
Introduction: Cost Analysis & Break-Even Point
Prepare:
Read:

Introduction and Lecture

Shuman Automobile Co.

CN-147-E Cost Structures and Definitions

A Brief Introduction to Cost Accounting
Strategic Cost Management: Definition and Overview
Strategic Cost Management: The Three Key Themes
Read: CN-155-E Relevant Costs for Decision Making (I): Basic Concepts

SESSION # 4

Owolabi
Introduction and Lecture
Introduction: Cost Analysis & Break-Even Point
Prepare:

Introduction and Lecture

Shuman Automobile Co.

Read:

CN-147-E Cost Structures and Definitions

A Brief Introduction to Cost Accounting
Strategic Cost Management: Definition and Overview
Strategic Cost Management: The Three Key Themes
CN-155-E Relevant Costs for Decision Making (I): Basic Concepts

Read:
SESSION # 5

Owolabi
Introduction: Cost Analysis & Break-Even Point
Prepare: Shuman Automobile Co.
Read: CN-155-E Relevant Costs for Decision Making (I): Basic Concepts

SESSION # 6

Owolabi
Introduction: Relevant Costs for Decision Making
Prepare: Prestige Telephone Company
Read: CN-155-E Relevant Costs for Decision-Making (I): Basic Concepts
CN-143-E Relevant Costs for Decision-Making (II): Decisions at Under-

Capacity
SESSION # 7

Owolabi
Contribution Margin
Prepare: Prestige Telephone Company
Read: CN-143-E Relevant Costs for Decision-Making (II): Decisions at Under-

Capacity
CN-144-E Relevant Costs for Decision-Making (III): Decisions at Capacity
SESSION # 8

Owolabi
Contribution Margin
Prepare: Prestige Telephone Company

Read: CN-143-E Relevant Costs for Decision-Making (II): Decisions at Under-Capacity

CN-144-E Relevant Costs for Decision-Making (III): Decisions at Capacity

SESSION # 9

Owolabi
Contribution Margin
Prepare: Prestige Telephone Company
Read: CN-143-E Relevant Costs for Decision-Making (II): Decisions at UnderCapacity
CN-144-E Relevant Costs for Decision-Making (III): Decisions at Capacity

SESSION # 10

Owolabi

Product Decisions (Adding or Dropping)

Prepare: Hanson Manufacturing
Read: --SESSION # 11

Owolabi

Product Decisions (Adding or Dropping)

Prepare: Hanson Manufacturing
Read: --SESSION # 12

Owolabi

Pricing Decisions
Prepare: Sheridan Carpets
Read: CN-145-E The Pricing Decision
SESSION # 13

Owolabi

Cost Centers
Prepare: Huron Automotive Company
Read: CN-146-E Cost Allocation and Cost Accounting Systems
SESSION # 14

Owolabi

Opportunity Cost
Prepare: Industrial Grinders
Read: CN-155-E Relevant Costs for Decision Making (I): Basic Concepts

SESSION # 15

Owolabi

Pricing Policy
Prepare: Symalit A.G.
Read: CN-145-E The Pricing Decision
MID-TERM EXAM
Owolabi
PART B:

DESIGN AND IMPLEMENTATION OF COST & MANAGEMENT

ACCOUNTING SYSTEMS

SESSION # 16

Owolabi

Joint Costs and By-Products

Prepare: Signatron Corporation
Read: CN-159-E Joint Costs and By-Products
SESSION # 17

Owolabi

Cost Systems for Decision Making

Prepare: Mueller-Lemhkul GmBH
Read: CN-147-E Cost Structures and Definitions
SESSION # 18

Owolabi

Opportunity Cost
Prepare: Liquid Chemical Company
Read: CN-155-E Relevant Costs for Decision Making (I): Basic Concepts
SESSION # 19

Owolabi

Cost Systems: Cost Allocation to Product

Prepare: Massachusetts Eye & Ear Infirmary
Read: --SESSION # 20

Owolabi

Cost Systems: Cost Allocation to Product

Prepare: Massachusetts Eye & Ear Infirmary
Read: --SESSION # 21

Owolabi

Cost Systems: Cost Allocation to Product Units.

Prepare: Destin Brass Products Company
Read: CN-146-E Cost Allocation and Cost Accounting Systems
SESSION # 22

Owolabi

Cost Systems: Cost Allocation to Product

Prepare: Kanthal (A)
Kanthal (B) [to be handed out in class]
Read: --SESSION # 23

Owolabi

Standard Costs & Variances

Prepare: Broadside Boat Builders Inc.
Read: CN-158-E Standards, Budgets, and Variance Analysis
SESSION # 24

Owolabi

Standard Costs & Variances

Prepare: Broadside Boat Builders Inc.
Read: CN-158-E Standards, Budgets, and Variance Analysis
SESSION # 25
The Budgeting Process
Prepare: Midwest Ice-Cream Company (A)
Read: Managing Against Expectation

Owolabi

SESSION # 26

Owolabi

The Budgeting Process

Prepare: Midwest Ice-Cream Company (A)
Read: Managing Against Expectation
SESSION # 27

Owolabi

The Budgeting Process

Prepare: Agbero Nigeria Ltd
Read:

FINAL EXAM

Managing Against Expectation

Owolabi

PART A: USES OF COST &

MANAGEMENT ACCOUNTING
REPORTS/INFORMATION

Session 1:
Introduction and Lecture

Session 2:
Introduction and Lecture

Session 3:
Introduction and Lecture
Introduction: Cost Analysis &
Break-Even Point

Session 4:
Introduction and Lecture
Introduction: Cost Analysis &
Break-Even Point

Session 5:
Introduction: Cost Analysis &
Break-Even Point

Session 6:
Introduction: Relevant Costs for
Decision Making

Session 7:
Contribution Margin

Session 8:
Contribution Margin

Session 9:
Contribution Margin

Session 10:
Product Decisions (Adding or
Dropping)

Session 11:
Product Decisions (Adding or
Dropping)

Session 12:
Pricing Decisions

Session 13:
Cost Centers

Session 14:
Opportunity Cost

Session 15:
Pricing Policy

PART B: DESIGN AND

IMPLEMENTATION OF COST &
MANAGEMENT
ACCOUNTING SYSTEMS

Session 16:
Joint Costs and By Products

Session 17:
Cost Systems for Decision
Making

Session 18:
Opportunity Cost

Session 19:
Cost Systems: Cost Allocation to
Product

Session 20:
Cost Systems: Cost Allocation
to Product

Session 21:
Cost Systems: Cost Allocation to
Product Units.

Session 20:
Cost Systems: Cost Allocation
to Product

Session 22:
Cost Systems: Cost Allocation to
Product

Session 23:
Standard Costs & Variances

Session 24:
Standard Costs & Variances

Session 25:
The Budgeting Process

Session 26:
The Budgeting Process

Session 27:
The Budgeting Process