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COURSE GUIDE DESCRIPTION

You must read this Course Guidecarefully from the beginning to the end. It tells

you briefly what the course is about and how you can work your way throughthe course material. It also suggests the amount of time you are likely to spend inorder to complete the course successfully. Please keep on referring to the CourseGuide as you go through the course material as it will help you to clarifyimportant study components or points that you might miss or overlook.

INTRODUCTION

BBAP2103 Management Accountingis one of the courses offered by the Facultyof Business and Management at Open University Malaysia (OUM). This course isworth 3 credit hours and should be covered over 8 to 15 weeks.

COURSE AUDIENCE

This course is offered to students undertaking the Bachelor of BusinessManagement and Bachelor of Hospitality Management programmes as well asthe Bachelor of Human Resource Management programme, for which it is amajor basic course.

As an open and distance learner, you should be able to learn independently andoptimise the learning modes and environment available to you. Before you beginthis course, please ensure that you have the right course material and understandthe course requirements, as well as how the course is conducted.

STUDY SCHEDULE

It is a standard OUM practice that learners accumulate 40 study hours for everycredit hour. As such, for a three-credit hour course, you are expected to spend

120 study hours. Table 1 gives an estimation of how the 120 study hours could beaccumulated.

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Table 1: Estimation of Time Accumulation of Study HoursStudy Activities StudyHours

Briefly go through the course content and participate in initial discussion 3

Study the module 60

Attend 3 to 5 tutorial sessions 10

Online participation 12

Revision 15

Assignment(s), Test(s) and Examination(s) 20

TOTAL STUDY HOURS 120

COURSE OUTCOMES

By the end of this course, you should be able to:

1. Explain the environment and importance of management accounting;2. Discuss marginal costing and absorption costing systems and their

importance;

3. Prepare accounting information from the beginning to the completion ofthe accounting cycle;

4. Differentiate between job-order costing and process costing, and their uses;and

5. Use management accounting techniques or analyses to assist managementin making decisions.

COURSE SYNOPSIS

This course is divided into eight topics. The synopsis for each topic is as follows:

Topic 1 discusses the management accounting environment that focuses oninformation used in decision making. It highlights the role of managementaccounting and compares it with financial accounting. The topic then covers thefeatures and importance of management accounting information. You will alsolearn about the concept of cost and its classification.

Topic 2 discusses two traditional product systems, which are marginal costingand absorption costing. The differences between these two costing methods from

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the aspects of product costing, inventory evaluation and income statement willalso be discussed. You will see how the adjustment of net income between thetwo costing methods is done. The topic ends with a discussion on the advantages

and disadvantages of marginal costing and absorption costing.

Topic 3 discusses job-order costing. In this topic, the purpose and features of job-order costing is explained. You will be exposed to the use of document flow in job-order costing. This topic also explains manufacturing cost flow in job-order costing.

Topic 4discusses process costing. You will be exposed to the differences betweenprocess costing and job-order costing. You will learn about equivalent units inprocess costing. The later section discusses the preparation of the productionreport using the weighted average method and the first in-first out method. Thistopic also explains the effects of increase in non-uniform manufacturing inputand the existence of various production departments.

Topic 5discusses cost-volume-profit (CVP) analysis. It highlights the importanceof CVP analysis. It also touches on the assumptions made in CVP analysis,methods of calculating the break-even point (BEP), approach to CVP analysis andapplications of CVP analysis. Finally, you will learn about the advantages anddisadvantages of CVP analysis in matters concerning decision making.

Topic 6 explains how the budget is used as a planning and operations controltool, and a performance measurement tool. The first part of this topic defines and

demonstrates the preparation of a budget. Then, the preparation of the masterbudget that consists of the operating budget and the financial budget for amanufacturing organisation and a non-manufacturing organisation is illustrated.The preparation of the pro-forma financial statement is shown as the finalproduct of this process. This topic also touches on flexible budget and themechanism of its preparation as well as its advantages as a performanceevaluation tool.

Topic 7discusses the use and importance of standard costing that represents avalue level that becomes a benchmark for measuring actual achievement againststandard achievement arrived at through the cost variance analysis method. Costvariance analysis is divided into three types, which are, direct material variance,direct labour variance and overhead variance. The topic also discusses the usesand advantages of variance analysis.

Topic 8discusses decision making. In this last topic, you will be exposed to therole of the management accountant in the decision-making process. It is shownhere that making decisions is not an easy process. The manager has to considereach and every factor before making any decision. You will also learn relevantinformation on making decisions and the constraints faced by an organisation. At

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the end of the topic, a detailed explanation on the types of decision making isgiven.

TEXT ARRANGEMENT GUIDE

Before you go through this module, it is important that you note the textarrangement. Understanding the text arrangement will help you to organise yourstudy of this course in a more objective and effective way. Generally, the textarrangement for each topic is as follows:

Learning Outcomes: This section refers to what you should achieve after youhave completely covered a topic. As you go through each topic, you shouldfrequently refer to these learning outcomes. By doing this, you can continuouslygauge your understanding of the topic.

Self Check: This component of the module is inserted at strategic locationsthroughout the module. It may be inserted after one sub-section or a few sub-sections. It usually comes in the form of a question. When you come across thiscomponent, try to reflect on what you have already learnt thus far. By attemptingto answer the question, you should be able to gauge how well you haveunderstood the sub-section(s). Most of the time, the answers to the questions can

be found directly from the module itself.

Activity: Like Self-Check, the Activity component is also placed at variouslocations or junctures throughout the module. This component may require youto solve questions, explore short case studies, or conduct an observation orresearch. It may even require you to evaluate a given scenario. When you comeacross an Activity, you should try to reflect on what you have gathered from themodule and apply it to real situations. You should, at the same time, engageyourself in higher order thinking where you might be required to analyse,synthesise and evaluate instead of only having to recall and define.

Summary: You will find this component at the end of each topic. This componenthelps you to recap the whole topic. By going through the summary, you should

be able to gauge your knowledge retention level. Should you find points in thesummary that you do not fully understand, it would be a good idea for you torevisit the details in the module.

Key Terms: This component can be found at the end of each topic. You should gothrough this component to remind yourself of important terms or jargon usedthroughout the module. Should you find terms here that you are not able toexplain, you should look for the terms in the module.

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References: The References section is where a list of relevant and usefultextbooks, journals, articles, electronic contents or sources can be found. The listcan appear in a few locations such as in the Course Guide (at the References

section), at the end of every topic or at the back of the module. You areencouraged to read or refer to the suggested sources to obtain the additionalinformation needed and to enhance your overall understanding of the course.

PRIOR KNOWLEDGE

Learners of this course are required to pass BBAW2103 Financial Accounting course.

ASSESSMENT METHOD

Please refer to myVLE.

REFERENCES

Horngren C. T., Harrison, W. T. Jr., & Bamber, L. S. (2002). Accounting(5th ed.).New Jersey: Prentice Hall.

Larson, K. D., Wild, J. J., & Chiappetta, B. (2004). Fundamental accountingprinciples(17th ed.). New York: McGraw-Hill.

Roger, H. H. et al. (1997). Accounting: A business perspective (7th ed.). UnitedStated: Irwin US.

Warren, C. S., Reeve, J. M., & Fess, P. E. (2004). Accounting (21st ed.). Ohio,United States: International Thompson Publishing.

Weygandt, J. J., Keiso, D. E., & Kimmel, P. D. (2004). Accounting principles (7thed.). Hoboken, New Jersey: John Wiley & Sons. Inc.

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TAN SRI DR ABDULLAH SANUSI (TSDAS)DIGITAL LIBRARY

The TSDAS Digital Library has a wide range of print and online resources for theuse of its learners. This comprehensive digital library, which is accessible throughthe OUM portal, provides access to more than 30 online databases comprisinge-journals, e-theses, e-books and more. Examples of databases available areEBSCOhost, ProQuest, SpringerLink, Books24x7, InfoSci Books, EmeraldManagement Plus and Ebrary Electronic Books. As an OUM learner, you areencouraged to make full use of the resources available through this library.