1

ACTG 552 Strategic Cost Management

Syllabus

Michael S. Schuster, MBA, CMA

PSU Office Telephone
: (503) 725-8701
PSU Office : SBA Building, Room #535
PSU Fax Number
: (503) 725-5850
Office Hours : 1:00 p.m. 2:00 p.m. M W Off-Campus Telephone : (360) 574-3716
and by appointment
Off-Campus Fax Number: (360) 574-3751
E-mail (PSU)
: michaels@sba.pdx.edu
E-mail (Off-Campus)
: michaelschuster@earthlink.net
Website
: http://www.sba.pdx.edu/faculty/michaels/ms.html

Course Information
Quarter
Time

: Spring 2011
: 5:40 p.m. 9:20 p.m. M

Location
Credits

: BA 140
: Four

Course Description and Objectives

This course extends the perspective of cost management and analysis from a primary focus on tactical
short-run/micro concerns to an emphasis on strategic long-run/macro issues. The linkage between cost
management, analysis and strategy is facilitated by utilizing three powerful strategic management
tools: value chain analysis (business functions), strategic positioning and cost driver analysis.
Supported by these as well as by other financial and non-financial tools, cost management and analysis
evolves into Strategic Cost Management (SCM). SCM exists to support decision-makers as they
develop, communicate, implement, evaluate and modify organizational strategy.
This course takes the perspective that managers should not use information from accounting systems
designed to prepare external financial reports in order to make internal management decisions. This
course provides alternative approaches to developing and using accounting information. Special
emphasis will be placed on understanding traditional cost systems, activity-based costing systems,
strategic positioning, and micro and macro issues surrounding the enterprise. Course will rely heavily
on the examination of actual company situations.
This course will follow these themes:
1. Developing new ways of looking at familiar problems and concepts for example, an SCM
look at such familiar issues as product line profitability, make/buy, or new product
introduction.
2. To understand the different behaviors of an organization during both economic expansion and
contraction, and how this effects different strategies, such as leverage, right sizing, mergers,
acquisitions, divestitures, and what to do with unused capacity.
3. Introducing some relatively new and(or) interesting topics in cost analysis that facilitate SCM,
to include but not limited to:
Activit
y Based Management/Budgeting

2
Economic Value to the Customer
Life Cycle Costing
Strategic Cost Drivers
Target Costing
Value Chain Analysis
Lean Production
Strategy and Management Accounting
Theory of Constraints and Throughput Accounting
Unused capacity
Leverage
Economic expansion
Downsizing
Globalization
Private Label and Co-packing
COURSE PREPARATION AND PARTICIPATION

Each student must accept the responsibility for course preparation. Thus, for each session, every
student must study the assigned readings and analyze the assigned cases.
The course uses cases extensively. In order to derive maximum benefit, it is essential that you
mentally get inside the case situation. Do not approach a case as you would a chapter in a book or
an article in a journal. You are not an observer but a participant. If a case centers on a decision that
needs to be made, put yourself in the shoes of the decision-maker. Feel the frustration(s) he/she feels
with respect to data limitations. Feel the pressure(s) he/she feels with respect to difficult tradeoffs,
limited resources, potential conflicts, etc. Share your ideas with others as we work jointly to resolve
the issues. I will also guide you in your case and topic presentations.
Case Analysis and Presentation grades will reflect the individual and the teams ability to critically
analyze the case or topic. The course will be graded as follows: 95% - case, 5% - in class participation.
Case solutions will be graded using the following criteria:
A.
B.
C.
D.
E.

Analyzing the case effectively

Identifying and evaluating alternative solutions
Linking the case to strategic issues
Organizing the case logically
Quality of the presentation, both written and oral
Total

Skill/Knowledge Set:

20
20
20
20
20
100

It is assumed that you have the following skills. If not, you will need to do some extracurricular work
so that you do not fall behind in the class.
1. Financial accounting basics. You must understand the purpose and content of the balance
sheet, income statement, and statement of cash flows.
2. E-mail. You will need to be able to send and receive e-mail messages, as well as attach and
download files.

Student Responsibilities
1. have completed the assigned reading material before the class period (see Course Outline);
2. spend two - three hours of outside preparation for each hour of class (average student for an
average grade);
3. actively participate in the class discussions;
4. request clarification or further elaboration whenever necessary;
5. do not interfere with the learning of other students;
6. be punctual, and if you need to leave class early, request permission;
7. ask me for tests and reports if you are absent the day a test is reviewed, or an assignment
returned;
8. borrow class notes from another student if you need to miss a day;
9. take all tests on the day assigned, and bring a calculator to class;
10. hand in course assignments on time and neatly word processed if specified. Late papers and
assignments, will be accepted with prior consent of the professor.

COURSE PRE-REQUISITES:
The School of Business Administration strictly enforces prerequisites for business courses. If a
student completes a course before completing the prerequisites and later completes the prerequisites,
he/she will NOT receive any credit for the prerequisites. The prerequisite for this course is BA 551.
Grade Revisions:
If you believe that any of your tests have been incorrectly graded, you are encouraged to submit a
written request for grade revision. This document should clearly identify why you believe more credit
is justified and support those beliefs with as much documentation as possible. Simply asking for an
item to be re-graded is insufficient, and will not result in a grade change. You must explain why more
credit is justified. All requests must be in writing, and attempts to have a grade revised orally will
preempt your ability to submit a written request.

Academic Honesty:

The Student Conduct Code, which applies to all students, prohibits all forms of academic cheating,
fraud, and dishonesty. These acts include, but are not limited to, plagiarism, buying and selling of
course assignments and research papers, performing academic assignments (including tests and
examinations) for other persons, unauthorized disclosure and receipt of academic information, and
other practices commonly understood to academically dishonor. The code of conduct also describes
standards of behavior for all student members of the campus community. Violation of the SCC may
lead to disciplinary action. Students may obtain copies of the Student Conduct Code by contacting the
campus judicial officer at (503) 725-4422, or by visiting her office in room 433 Smith Memorial
Center.
Other Information:
1. Cell phones ringing during class interrupt students extensively. Please turn them off before
coming to class.
2. If there is any student in this class who has a need for test-taking or note-taking
accommodations, please come and discuss this with me in my office.
3. Harvard Address: http://cb.hbsp.harvard.edu/cb/access/8619878

Grading Policy
A
AB+
B
BC+
The letter grade will
of MSFA students.

= 93-100%
C
= 70-76%
= 90-92%
D
= 60-69%
= 87-89%
F
= Below 60%
= 83-86%
= 80-82%
= 77-79%
reflect each students performance relative to the course and standards expected

Course Materials and Other Learning Tools

Texts: On reserve at the PSU library

Reading assignments (cases & articles)

Problem assignments
Lecture material
In-class discussions

Schedule of Classes

Class handouts
Videos
Practical applications
Plant tour

5
We may need to change topics or assignments as the quarter progresses.
Date

Case

March 28

Introductions of Professor
and Students

Topic

Reading
___

____________Introduction to Course
April 4

April 11

Case #1 - American
Outsourcing
(2007)

Make vs. Buy

___
___

___
_______________
Case, Articles, Texts
_____________________
_________
Case, Articles, Texts

Case #2 - Starbucks Coffee SCM in a service

Company
company
(2005, bring current)
___
___________________________________________________________________________
April 18
Case #3 Harley-Davidson JIT, Differentiation. Case, Articles, Texts
Company
(2007, 2008)
_________
_________________________________________________________________________________
May 2
Case #4 - Toyota
Kaizen, Lean, JIT
Case, Articles, Texts
(1999, bring current) Kanban
___________________________
_________
May 9
Case #5 - General Motors
Strategy, Bankruptcy Case, Articles, Texts
(2005, bring current) IPO, New Emergence
_____________________
____
_______________
May 16
Case #6 - Dell
Economic Expansion Case, Articles, Texts
(2010)
ABC, JIT, CCC,
Liquidity
_______________
May 23
Case #7 Anagene, Inc.
Cost of Unused
Case, Articles, Texts
.
(2008)
Capacity
____________
_________
___
June 6
Case #8 - Bankinter
Internet Customer
Case, Articles, Texts
_____________________(2007)______________________________________________________

___

6
June 6
5:30 pm 7:30 pm

Case #9 Russia, Congo,

China, India,
Other (2011)

Adam Smith,
Henry Ford,
Margaret Thatcher

Case, Articles, Texts

Natural resources, case
Plant Tour
_______________