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                                         NEW YORK UNIVERSITY
                                          Stern School of Business
                               Advanced Managerial Accounting
        Cost Analysis For Decision Making, Forecasting And Performance Measurement
                                          Fall 2007
Prof. Alex Dontoh
Room 10-72 KMEC, x 80064
Off. Hrs: TR: 3:30-5:00p and by appointment.
E-mail: adontoh@stern.nyu.edu

COURSE OBJECTIVES
Cost information and management initiatives provide accurate cost and other relevant information
for business decision making. In particular, cost management plays a key supporting role in efficient
running of businesses in highly competitive environments. The course is designed to give students
insight into the use and limitations of cost accounting information in business decision making. The
objective is to teach the tools and techniques for successfully implementing cost management
strategies and techniques including the design and use of cost measurement and evaluation systems
in manufacturing and service businesses. The skills learned in this course should be highly relevant
for accountants and managers including consultants and managers of financial services.

COURSE FOCUS
The course focuses on using accounting information as a decision maker, rather than on preparing
the information. An ability to think systematically about how the existing reporting systems in any
given setting can be improved upon so as to better serve managerial informational needs for planning
and control will be stressed. The skills learned in this course should be highly relevant for all
managers, particularly consultants and managers of financial services. The tools include designing
and using measurement systems and incentive systems. The course tools are applicable for both
manufacturing and service companies. The tools are equally applicable to established companies as
well as startups. The key issue is that any of these organizations can benefit from cost management
systems that accurately provide information and that facilitates integration of initiatives such as total
quality, new product and service design, and cost reduction and business process improvement that
enhances their competitiveness and profitability of operations. Students will be given ample
opportunity to apply cost concepts to analyzing real world business problems through a series of
problems and case studies. Students will be required to define, analyze, solve and communicate their
solutions to unstructured problems.

COURSE CONTENT AND ORGANIZATION
The course starts with an introductory section on the structure and design of cost systems and moves
on to examine the role of information systems in cost control, and employees learning and
continuous improvement activities. There will be a comprehensive coverage of Cost information in
decision analysis. Numerical and computer exercises will be used throughout the course for hands-
on experience with measurement systems and for reinforcing concepts learned in the cases.

Course text (required): Custom text comprising of chapters 1-9 of Quantitative Methods for Business 10th
edition by David R. Anderson, Sweeney and Williams and chapters 8-10 of Management Accounting: The
Cornerstone for Business Decisions by M. Mowen and D. Hansen Thomson Southwestern Publishing 2006)
GRADING POLICY AND DESCRIPTION
      Makeup of Course Grade:
                Final Exam                           35 %
                Midterm Exam                         25 %
                Class Participation                  15 %
                Quizzes                              10 %
                Homework Assignments                 15 %

COURSE POLICIES
    Attendance
         Class attendance is mandatory and part of a student’s grade. Absences may be
           excused only in the case of documented serious illness, family emergency, religious
           observance, or civic obligation. If you will miss class for religious observance or
           civic obligation, you must inform me no later than the first week of class. Recruiting
           activities are not acceptable reasons for class absence.
         Students are expected to arrive to class on time and stay to the end of the class
           period. Chronically arriving late or leaving class early will have an impact on a
           student’s grade. Students may enter class late only if given permission by the
           instructor and can do so without disrupting the class.

       Class Participation
           Individual and Group participation is an essential part of learning in this course.
              Students are expected to participate in all facets of classroom learning.

       Reading/Homework
           Students are expected to come to class prepared having read text and assigned
             readings prior to class. Homework, case studies, and other assignments are expected
             to be completed and handed in on time.

       Late Assignments and Make-up Policy
           Late assignments will either not be accepted unless due to documented serious illness
              or family emergency or will incur a grade penalty unless due to documented serious
              illness or family emergency.
           Exceptions will be made for religious observance or civic obligation only when the
              assignment cannot reasonably be completed prior to the due date and the student
              makes arrangements for late submission with the professor in advance.

       Classroom Norms
           If applicable, note your preference regarding food in class.
           Laptops, cell phones, Smartphones and other electronic devices are a disturbance to
              both students and professors. All electronic devices must be turned off prior to the
              start of each class meeting.

ETHICAL GUIDELINES
     Student Code of Conduct
            All students are expected to follow the Stern Code of Conduct
            (http://www.stern.nyu.edu/uc/codeofconduct)
            A student’s responsibilities include, but are not limited to, the following:
                 A duty to acknowledge the work and efforts of others when submitting work as
                    one’s own. Ideas, data, direct quotations, paraphrasing, creative expression, or
                    any other incorporation of the work of others must be clearly referenced.
                 A duty to exercise the utmost integrity when preparing for and completing
                    examinations, including an obligation to report any observed violations.

      STUDENTS WITH DISABILITIES
           Students whose class performance may be affected due to a disability should notify
             the professor immediately so that arrangements can be made in consultation with the
             Henry and Lucy Moses Center for Students with Disabilities
             http://www.nyu.edu/csd/ to accommodate their needs.


                   TOPICAL OUTLINE AND COURSE SCHEDULE

9/4        Preliminaries – Course policies
9/6        Introduction to Decision Models
               Reading: Ch. 1 of ASW
               Discussion Problems: 1-10, 1-12, 1-14

SECTION I
A.      DECISION MAKING UNDER UNCERTAINTY - THE VALUE OF INFORMATION
9/11 - 9/13 Assessing Uncertain Events
            - Review of Probability Theory and Distributions
              Reading: Chs. 2&3 of ASW
              Discussion Problems: 2-8, 2-21, 3-14, 3-26
              Case: Problem: Carstab Corporation
              Homework Assignment 1 Due 9/18: 2-4;2-22;3-7; 3-26

9/18-9/20 Decision Analysis under Uncertainty
            Reading: Ch. 4 of ASW
            Discussion Problem: 4-9, 4-18, 4-19
            Case: Problems: Oceanview Dev. Corp (pg. 144 of ASW), Edgarton Fisheries
           Homework Assignment 2 Due 10/2: 4-4; 4-14; 4-21
9/25       Section Recap and Quiz

B.     STRATEGIC DECISION MAKING
9/27; 10/2 Utility Maximization in Decision Making
              Reading: Ch. 5 pgs.154-164 of ASW
              Discussion Problem: 5-2, 5-4
              Case: Problem: Alberson
               Homework Assignment 3 Due 10/4: 4-4; 4-14; 4-21
10/4;      Strategic Decision Making – Introduction to Game Theory
             Reading: Ch. 5 pp/ 164-172. of ASW
             Discussion Problem: 5-11, 5-12
10/9         Section Recap and Quiz

C.     PRODUCT AND SERVICE COST OPTIMIZATION MODELS
10/11;10/16 Introduction to Linear Programming
             Reading: Ch. 7 of ASW
            Discussion Problem: Fraser Farms
            Group HW Assignment (4): Katastrofik Chemicals - Due 10/25

10/18;10/23 Linear Programming – Multiple Product Cost Accounting
             Reading: Ch. 8 of ASW
             Case Problem: Cholestrol Chemicals

10/25       Linear Programming – Service Costing Applications
             Reading: Ch. 9 of ASW
             Case Problem: Investment Strategy;
10/30        Section Recap and Midterm Exam Review
 11/1        Midterm Exam

SECTION II
COST PREDICTION AND FORECASTING
11/6-11/8   Cost Estimation - Regression Analysis
            Reading: Ch. 6 of ASW
            Case Problem: Franklin Furniture;
            Group HW Assignment (5): Forecasting Sales - Due 11/15
11/13-11/15 Cost Estimation - Regression Analysis
            Reading: Ch. 8 of H&M
            Case Problem: Franklin Furniture;
11/20       Section Recap and Quiz

SECTION III
MEASURING BUSINESS AND FINANCIAL PERFORMANCE
11/27; 11/29 Standard Costing, Kaizen and Target Costing
             Reading: Chapter 9 and Appendix 9B of M&H
             Discussion Problem: Ex 9-14, Problem 9-2
             Case: Problem 9-14 of M&H.
             Group HW Assignment (6): 9-12, 9-13; 9-14- Due 12/6

12/4; 12/6 - Budgets and Profit Planning For Future Operations
              Role of budgets in planning, control, and decision making.
              Reading: Chapter 8 of M&H
              Discussion Problem: Ex 8-10, 8-11, 8-12
              Case: Fraser Farms
12/11         Section Recap and Final Exam Review

								
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