2010-11 academic year

Cost Accounting I (21853)

Degree/study: degree in Business Sciences
Year: 2nd
Term: 2nd
Number of ECTS credits: 5 credits
Hours of studi dedication: 125 hours
Teaching language or languages: Catalan
Teaching Staff: Jordi de Falguera and Ramon Bastida

1. Presentation of the subject

Cost Accounting I is a compulsory subject for the Business Sciences degree course.

The basic objective of the subject is to ascertain the procedures used by businesses to calculate the cost of the products and services they offer, in order to take the correct decisions.

Cost accounting is strategically important in an increasingly competitive environment.

This subject has been adapted to the European credits system, as stipulated in the European Higher Education Area. The competences to be achieved by the student when passing this subject have been defined with this in mind.

Attendance at classes has been reduced and replaced by a more active learning process for the student. This means that the student is more continuously involved in the development of the subject, by means of continuing assessment and personal study of the bibliography. Meanwhile, more emphasis has been placed on teamwork and the ability to communicate, both orally and in writing, as these competences are very important for the professional career of a Business Sciences graduate.

2. Competences to be attained

The learning to be achieved in the subject Cost Accounting I, in terms of general and specific competences, is as follows:

General competences

Specific competences

Interpersonal:

- Agreement when solving practical cases by teamwork.

- Communicative ability to present the conclusions of a report in writing and orally (public expositions).

Instrumental:

- Production of clear and easily understood structured written reports.

- Planning of the time necessary to complete tasks and activities.

- Organized problem solving, applying the appropriate adequate methodology.

Systemic:

- Transfer of knowledge to practice.

- Understanding of the functions of Cost Accounting in the accountancy area.

- Differentiation of cost types.

- Application of accounting procedures:

- Ordering of data.

         - Calculation of the costs of
            items comprising a product or
            service.

         - Differentiation and application of
           costing systems according to the
           company's casuistry.

- Production of analytical results accounts.

3. Contents

Subject 1. Introduction
Management Accounting 1.2. Financial accounting versus cost accounting. The difference between expenditure, cost, payment and investment.

Subject 2. Classification of costs
Costs by type. Costs by function. Direct costs and indirect costs. Product costs and period costs. Variable costs and fixed costs. Opportunity costs.

Subject 3. Direct costing systems
Single-product companies. Multi-product companies. Direct costing systems. Advanced direct costing systems.

Subject 4. Variable costing systems
Variable costing systems. Advanced variable costing systems. Point of equilibrium and cost-volume-profit analysis.

Subject 5. Order costing system
Work order. Treatment of direct costs. Attribution of indirect costs to orders. Estimation of the result in work-in-process.

Subject 6. Process costing system
Direct partial cost versus complete cost. Complete costing system per process. Valuation of work-in-process.

Subject 7. Complete costing system by sections
Division of the company into main and auxiliary sections. Work units and equivalent units. Product unit costs.

Subject 8. Activities based costing (ABC) systems (Introduction)
Changes in the business environment and the impact on cost calculation and management. The ABC Model. Activities. Cost drivers.

Subject 9. Cost-based decision-making
Relevant costs. Setting sale prices. Manufacturing or subcontracting. Elimination of segments. Replacement of production equipment. Controllable costs and uncontrollable costs. Cost reduction techniques. Limitations of costs data for decision-making.

Application of procedures

Calculation of the costs of the items comprising a product or service.

Concepts

Procedures

Attitudes

1. Financial Accounting / cost accounting.

2. Management Accounting

3. Classification of costs:

3.1. Costs by type

3.2. Costs by function

3.3. Direct costs and indirect costs

3.4. Product costs and period costs

3.5. Variable costs and fixed costs

3.6. Opportunity costs

1. Procedures related to management accounting:

1.1. Management accounting versus cost accounting

1.1.1.   Processing of the information generated in various areas

1.2. Financial accounting versus cost accounting

1.2.1.   Relationship between financial accounting and costs accounting

1.2.2. Information transfer. Shared information

1.2.3. Distinction between expenditure, cost, payment and investment

2. Procedures related to classification of costs:

2.1. Differentiation and use of costs by type

2.2. Differentiation and use of costs by function

2.3. Differentiation and use of direct and indirect costs

2.4. Differentiation and use of product and period costs

2.5. Differentiation and use of fixed and variable costs

2.6. Differentiation and use of opportunity costs

1. Proactive attitude in the learning process

2. Active participation in sessions

3. Ability to order the data provided in the cases

4. Thoroughness in solving exercises/cases

5. Good formal presentation of work

Differentiation and application of cosing systems according to the company's casuistry

Concepts

Procedures

Attitudes

1.    Costing systems:

1.1. Direct costing systems

1.2. Variable costing systems

1.3. Order costing systems

1.4. Process costing system

1.5. Complete section costing system

1.6. Activities based costing system (ABC)

2.    Cost-based decision-making

1.    3. Attribution of costs in the direct costing system:

1.1. Single-product companies

1.2. Multi-product companies

1.3. Attribution of costs in the direct costing system

1.4. Attribution of costs in the advanced direct costing system

2.    Attribution of costs in the variable costing system:

2.1. Variable costing system

2.2. Advanced variable costing system

2.3. Point of equilibrium and cost-volume-profit analysis

3.    Attribution of costs in the order costing system

3.1.1.   Dealing with work orders

3.1.2.   Treatment of direct costs

3.1.3.   Attribution of indirect costs to orders

3.1.4.   Estimation of results of work-in-process

4.    Attribution of costs to the process costing system

4.1.1.   Direct partial cost versus complete cost

4.1.2.   Complete process costing system

4.1.3.   Valuation of work-in-process

5.    Attribution of costs in the completed sections costing system

5.1.1.   Differentiation and division of the company into main and auxiliary sections

5.1.2.   Treatment of work units

5.1.3.   Treatment of equivalent units

5.1.4.   Calculation of costs per product unit

6.    Introduction to the attribution of costs in the activity-based costing system (ABC)

6.1.1.   Consideration on changes in the business environment

6.1.2.   Impact on calculation and cost management

6.1.3.   Attribution of costs in the ABC model

6.1.4.   Treatment of activities

6.1.5.   Treatment of cost drivers

7.    Decision-making linked to costs

7.1.1.   Treatment of relevant costs

7.1.2.   Settings sale prices

7.1.3.   Valuation and decisions on manufacturing or subcontracting

7.1.4.   Valuation and decision-making on the removal of segments and replacement of productive equipment

7.1.5.   Identification of controllable and uncontrollable costs

7.1.6.   Application of cost reduction techniques

7.1.7.   Limitations of costs data for decision-making

1. Proactive attitude in the learning process

2. Respect for accounting regulations

3. Ability to order the data provided in the cases

4. Thoroughness in solving exercises/cases

•5.    Good formal presentation of work

4. Assessment

The assessment system is focused on that the lecturer and the student having access to information on the progress made in learning and how this process is completed within the timeframe of the term.

General assessment criteria

Weighting:

1. Continuing assessment: 40% of the final grade

1.1. Practical classes: 20%
1.2. Presentation: 20%

2. Final assessment: 60% of the final grade

1. Continuing assessment (40%):

Continuing assessment takes place by means of:

1.1. Practical classes: production and hand-in of practical work set (20%).
1.2. Problem solving and public presentation of exercises or cases: presentation of an exercise or case

1.1. Practical classes (20%)

Objective
The objective of the practical classes is to contextualise the procedures or concepts explained and apply them to numeric cases.

Grouping
Practical classes take place in groups of 4 to 7 people.

Presentation conditions
Practical activities should be well presented and clearly and coherently structured. The work must be produced with a word processor (Word or similar).

Number of practical classes
The total weight of the practical classes in the final grade will be 20% of the final mark.

Hand-in
The reports must be handed in at the seminars, and will be analysed afterwards.

1.2. Presentation at seminars (20%)

Objective
The objective of the presentations is to solve a practical case and explain a reasoned solution to classmates.

Grouping
This session involves oral presentations of approximately 20 minutes' duration, by groups of 4 to 7 people.

Assessment
The total weight of the presentation will be 20% of the final mark.

Tutorship
The groups will have the opportunity to meet the lecturer a few days before the presentation.

2. Final assessment (60%):

Objective
Individual application of the procedures and methods learned during the term to the cases considered.

Characteristics
This will consist of an individual written theoretical and practical examination. The examination must be passed, i.e. a minimum mark of 5 (out of 10) is required to pass the subject.

3. Self-evaluation:

Objective
Learning and consolidation of the content presented in the plenary sessions and seminars.

Characteristics
- Activities included in the block of exercises not covered in the plenary sessions.
- Publication of the solution in the subject's Aula Global.
- Optional; it is not weighted in the final grade.

Summary of assessment criteria

Continuing assessment(40%)

  Final examination

(60%)



Maximum grade

Practical classes (20%)

Presentation

(20%)



Yes

Yes

The continuing assessment is weighted with the examination mark providing that the final assessment has been passed, from a minimum of 5 (out of 10)

10.0

5. Bibliography and teaching resources

5.1. Basic bibliography

ACCID (2010): "Noves tendències en control i reducció de costos." Monografia de la Revista de Comptabilitat i Direcció, Barcelona.

Amat, O. and Soldevila, P. (2009): Comptabilitat i gestió de costos, SCCID-Profit, Barcelona.

Drury, C.: Costing an introduction. Ed. Chapman and Hall.

Lucey, T. (2007): Costing, Thomson Learning, London.

Rosanas, J. M. (1994): Contabilidad de costes para la toma de decisiones. Desclée de Brouwer, Bilbao.

5.2. Teaching resources (Aula Global)

- Exercise book.
- Transparencies.
- Notes.

6. Methodology

This subject uses various types of sessions and working methods for the student to obtain knowledge described in the programme. These sessions are divided into two groups: classroom sessions and consultation and study sessions.

Classroom sessions

Plenary sessions last one and a half hours for the whole group. The lecturer has most of the workload in the session, and sets out the key concepts of cost accounting and explains the correct procedures to use in problem-solving.

Seminar lectures are sessions lasting one and a half hours. The objective of these sessions is the consolidation and implementation of knowledge, based on the student's active participation.

a. In the first 20-30 minutes, the group assigned has to solve the exercise of the case established for that week.

b. The second part looks at the practical work assigned for that seminar and resolves the doubts that have emerged during the plenary sessions.

Consultation and study sessions

Consultation tutorial: e-mail your assigned lecturer or find out his/her tutorial hours using the Aula Global to arrange meetings.

Individual work: covers the personal study time for assimilating the concepts and procedures discussed in lectures. It includes the study of basic teaching resources and undertaking self-assessment exercises. The objective is to prepare for the practical classes and the presentations and to study for the final examination.

Group work: working time in groups for preparing the presentation.

7. Planning of activities

	PLENARY SESSIONS	SEMINARS*	TIME OUTSIDE THE CLASSROOM (ESTIMATED)
Week 1	PRESENTATION INTRODUCTION TO COST ACCOUNTING		- Individual work: 2 hours
Week 2	COST CLASSIFICATION		- Individual work: 2 hours
Week 3	DIRECT COSTING SYSTEMS		- Individual work: 2 hours
Week 4	VARIABLE COSTING SYSTEM		- Individual work: 2 hours - Production of the first practical class: 2 hours - Group work: - Where appropriate, preparation of the presentation: 2 hours
Week 5	ORDER COSTING SYSTEM	DIRECT AND VARIABLE COSTING SYSTEMS - Presentation - Correction of the first practical class	- Individual work: 2 hours - Production of the second practical class: 2 hours - Group work: - Where appropriate, preparation of the presentation: 2 hours
Week 6	PROCESS COSTING SYSTEM	ORDER COSTS - Presentation -Correction of the second practical class	- Individual work: 2 hours - Production of the third practical class: 2 hours - Group work: - Where appropriate, preparation of the presentation: 2 hours
Week 7	COMPLETE SECTION COSTING SYSTEMS I	COSTS BY PROCESS - Presentation - Correction of the third practical class	- Individual work: 2 hours - Production of the fourth practical class: 2 hours - Group work: - Where appropriate, preparation of the presentation: 2 hours
Week 8	COMPLETE SECTION COSTING SYSTEMS II	COMPLETE COSTS BY SECTION - Presentation - Correction of the fourth practical class	- Individual work: 2 hours - Production of the fifth practical class: 2 hours - Group work: - Where appropriate, preparation of the presentation: 2 hours
Week 9	INTRODUCTION TO THE ACTIVITY-BASED COSTING SYSTEM	COMPLETE COSTS BY SECTION - Presentation - Correction of the fifth practical class	- Individual work: 2 hours - Production of the sixth practical class: 2 hours - Group work: - Where appropriate, preparation of the presentation: 2 hours
Week 10	COST-BASED DECISION-MAKING	ABC COSTS - Presentation - Correction of the sixth practical class	- Individual work: 6-8 hours

PLENARY SESSIONS

SEMINARS*

TIME OUTSIDE THE CLASSROOM (ESTIMATED)

Week 1

PRESENTATION
INTRODUCTION TO COST ACCOUNTING

- Individual work: 2 hours

Week 2

COST CLASSIFICATION

- Individual work: 2 hours

Week 3

DIRECT COSTING SYSTEMS

- Individual work: 2 hours

Week 4

VARIABLE COSTING SYSTEM

- Individual work: 2 hours

- Production of the first practical class: 2 hours

- Group work:
- Where appropriate, preparation of the
presentation: 2 hours

Week 5

ORDER COSTING SYSTEM

DIRECT AND VARIABLE COSTING SYSTEMS

- Presentation

- Correction of the first practical class

- Individual work: 2 hours

- Production of the second practical class: 2 hours

- Group work:
- Where appropriate, preparation of the
presentation: 2 hours

Week 6

PROCESS COSTING SYSTEM

ORDER COSTS

- Presentation

-Correction of the second practical class

- Individual work: 2 hours

- Production of the third practical class: 2 hours

- Group work:
- Where appropriate, preparation of the
presentation: 2 hours

Week 7

COMPLETE SECTION COSTING SYSTEMS I

COSTS BY PROCESS

- Presentation

- Correction of the third practical class

- Individual work: 2 hours

- Production of the fourth practical class: 2 hours

- Group work:
- Where appropriate, preparation of the
presentation: 2 hours

Week 8

COMPLETE SECTION COSTING SYSTEMS II

COMPLETE COSTS BY SECTION

- Presentation

- Correction of the fourth practical class

- Individual work: 2 hours

- Production of the fifth practical class: 2 hours

- Group work:
- Where appropriate, preparation of the
presentation: 2 hours

Week 9

INTRODUCTION TO THE ACTIVITY-BASED COSTING SYSTEM

COMPLETE COSTS BY SECTION

- Presentation

- Correction of the fifth practical class

- Individual work: 2 hours

- Production of the sixth practical class: 2 hours

- Group work:
- Where appropriate, preparation of
the presentation: 2 hours

Week 10

COST-BASED DECISION-MAKING

ABC COSTS

- Presentation

- Correction of the sixth practical class

- Individual work: 6-8 hours

* The seminars will begin in week 5.