CASES IN MANAGEMENT ACCOUNTING & CONTROL

Course Description
Cases in Management Accounting and Control is a collection of real-life
problems that are thought-provoking and relevant to contemporary business
situations and decisions. Topics include cost behaviors, standard costing,
and relevant costs, activity-based thinking, balanced scorecards, transfer
pricing, the use of ROI versus Residual Income to measure performance,
flexible budgeting, and revenue and expense variance analysis.

Course Requirements and Credits

Course Requirements : Managerial Accounting, FSA
Course Credit Hours : 3 hours
Total ECTS Credits
: 6 credits

Target Audience
Undergraduate students. Profile course.

Learning Objectives
The course enhances the management dimensions of management
accounting and control, covering topics such as costs, cost analysis, and
planning and performance measurement. These are critical for managers in
making operating and strategic decisions. The course aims to make the
students proficient in dealing with information from real financial statements.
You will also enhance your knowledge of accounting further by applying the
theoretical concepts and analyzing the reporting tools used in business.

Text and Materials Required

Cases in Management Accounting and Control Systems, 4/E , Brandt, Allen,
Brownlee, Haskins, Lynch, Rotch, ISBN: 0-13-570425-1, Publisher: Prentice
Hall, Copyright: 2005

Course Outline
PART I: INTRODUCTION TO MANAGEMENT ACCOUNTING AND
CONTROL.
Breezy Boat Company.
A short introduction to management accounting: defining the cost
information that management needs.
PART II: UNDERSTANDING COSTS AND COST BEHAVIORS.
FinePrint Company (A).
Cost behaviors and relevant costs in a special order decision.
FinePrint Company (B).
Cost behaviors and relevant costs in an outsourcing decision.
FinePrint Company (C).

Cost behaviors and relevant costs in both a special order and

outsourcing decision.
Graphics, Inc. (A).
A game to illustrate the impact of cost behaviors and production
scheduling in a competitive bidding contest.
PART III: FUNDAMENTALS OF PRODUCT AND SERVICE COSTING.
Lambeth Custom Cabinets (A).
Job costing and relevant costs for pricing; recording transactions
related to inventory.
Shun Electronics Company.
Overhead allocation in product costing.
Wendys Chili: A Costing Conundrum.
Joint costs and costing by-products: costing the chili.
Narnia, Inc.
Activity-based costing: overhead allocation in a competitive
environment
Breeden Electronics (A).
Evolution of costing systems from traditional cost systems to activitybased cost systems.
Breeden Electronics (B).
Evolution of costing systems from traditional cost systems to activitybased cost systems.
Breeden Electronics (C).
Evolution of costing systems from traditional cost systems to activitybased cost systems; customer profitability analysis.
PART IV: MANAGEMENT CONTROL SYSTEMS: BASIC VARIANCE
ANALYSIS.
Wilmont Chemical Corporation.
Material and labor variances.
Hydrochem, Inc.
Material, labor, and overhead variances.
Gomez Electronics, Inc.
Comprehensive variance analysis; choice of direct or full costing for
assessing company performance and decision-making.
PART V: MANAGEMENT CONTROL SYSTEMS: PLANNING,
BUDGETING, AND STRATEGIC PROFITABILITY ANALYSIS.
Blackheath Manufacturing CompanyRevisited.
Budgeting and profit variance analysis.
Charleys Family Steak House (A).
Developing a profit plan
Charleys Family Steak House (B).
Flexible budgeting and strategic profitability analysis.
Charleys Family Steak House (C).
Flexible budgeting and strategic profitability analysis.
Oriole Furniture, Inc. (A).
Profit planning and control.
PART VI: MANAGEMENT CONTROL SYSTEMS: PERFORMANCE
MEASUREMENT AND INCENTIVE SYSTEMS.
Performance Measurement at Thomas J. Lipton.
Measuring product line performance: ROI vs. Residual Income
(Economic Profit).
Valmont Industries, Inc.
Decision of whether to adopt EVA as part of a change in strategic
focus.

Maverick Lodging.
The Balanced Scorecard system.
Lynchburg Foundry: The Ductile Dilemma.
Transfer pricing: costing a by-product.
Xyberspace Consulting, Inc.
Transfer pricing: allocation of shared services costs.
Final exam

Methodology
The course is a combination of discussions, cases and exercises. Students
will be required to have an uninterrupted presence and homework
preparation

Grading Policies
Presence:
Participation:
Cases:
Mid term exam:
Final Exam:

10%
20%
30%
20%
20%

Contact Information
Swiss Management Center
School of Graduate Studies
Baarerstrasse 112
CH-6302 Zug
Switzerland