Name of University: Addis Ababa University

Name of College/Faculty: Business and Economics

Name of Department: Accounting and Finance
Department Accounting & Finance
Program BA degree in Accounting & Finance
Module Cost & managerial Accounting
Number/Title
Module Code ACFN-3030
Objective of the This module will cover cost accumulation concepts and techniques for Product and Service Costing
module and Planning and Control, as well as Non-routine Managerial Decisions. Modern management
accountants are not only concerned with how cost data are transformed into cost accounting
information but more importantly how to use cost accounting information to aid managerial goals. It
is the case, however, that one cannot effectively use cost information without a good understanding
of how various cost accounting information are generated.
The module should develop the student's understanding, skill, and analytical ability in cost and
management accounting to the level where he or she can function effectively (and efficiently) as a
professional cost and management accountant in industry, public accounting, management
consulting, government, or personal business management.

Total ETCTS ETCTS: 10

and Credit Credit Hours: 6
Hours of the
module
Addis Ababa University
Course Development Template
College: Business and Economics
Department: Accounting and Finance
Program: BA Degree in Accounting and Finance
Course Title: Cost and Management Accounting-I
Year: II Semester: I
Instructor:
 Name: _______________________________
 Contact information ___________________
 Office hours: _________________________
N Section Contents Remarks
o
1. Module to which the course
belongs:
1.1. Module Title Cost and Management Accounting
1.2. Type of Module
2. Competencies Upon the successful completion of this module,
students should be able to:

 Apply techniques to support management

decision making, including product costing and
cost classifications.
 Apply appropriate quantitative techniques to
analyze cost behavior and the drivers of costs.
 Analyze financial and non-financial data to
provide relevant information for management
decision making.
 Apply cost accumulation methods to determine
cost of cost objects.
 Classify costs on different basis within the
organization.
3. Course Type Cost and Management Accounting-I a basic Cost and
Management Accounting Module course. It is mostly
lectured based course delivered to students face to face
and synchronous where students are required to
punctually attend classes. They are also required to
submit assignments and projects given on time and take
exams to complete the course.
4. Course Identifiers
4.1. Course Code ACFN 3031
5. 4.2. Credit Point in ECTS 5
6. Prerequisite Fundamentals of Accounting-II

7. Course Description Cost and management accounting-I is concerned

with fundamental cost concepts, behavior, and
analysis and the use of cost information to develop
superior decision making process and outputs. It
introduces students with the definition and
classification of costs. It will also introduce students
with various cost functions and cost accumulation
methods commonly used in organizations.
8. Learning Outcomes Upon the successful completion of this module,
students should be able to:
 Understand various classifications to analyze
costs within the organization.
 Describe and apply the principles relating to the
costing of the different resource inputs into a
business.
 Demonstrate output costing methods
appropriate to a variety of different businesses.
 Clearly understand the differences between job
order costing and process costing.
 Apply cost accumulation methods (job and
process costing) in organization
 Apply and analyze different types of activity-
based management tools through the
preparation of estimates.
9. Course Contents Chapter-1: Overview of Cost and Management
Accounting 2WEEKS
{1ST&2ND }
Learning Outcomes
Up on completion of this chapter students should
be able to:
 Understand Definitions of costs
 Differentiate Cost Accounting, Managerial
Accounting and Financial Accounting
 Classify costs based on various attributes
 Understand various cost functions their
calculations and analysis

1.1. Objectives of Cost & Management Accounting

1.2. Cost and management accounting in
comparison with financial accounting: their
purposes, the role of cost accounting as part
of a management information system, and the
need for both financial as well as non-
financial information
1.3. Cost classification concepts and terms, such
as:
 Direct and indirect costs,
 Fixed and variable costs,
 Period and product costs,
 Controllable and uncontrollable costs,
 Avoidable and unavoidable costs,
 “Sunk” costs,
 Budgeted, standard and actual costs and
their comparisons and analyses
1.4. The use of linear, curvilinear and step
functions and how their calculations are used
to analyze cost behavior
1.5. The concepts of cost units, cost centers and
profit centers
10. Chapter-2:.Cost determination: The costing of
resource inputs

Learning Outcomes 3 WEEKS

Up on completion of this chapter students should {3RD-5TH }
be able to:
 Determine or calculate costs of material and
labor
 Compute overhead costs
 Record cost of inputs

2.1. Materials
 Accounting for stock (inventory)movements
 Determination of optimum purchase
quantities
 Identification of accounting for stock losses
2.2. :Labor
 The difference between direct and indirect
labor
 Types of labor remuneration methods
2.3. :Overheads
 Overhead cost analyses
 The apportionment and absorption of
overhead costs, including allocation of
service department costs.
 Accounting for the over- and under
absorption of costs
 IAS 2 inventories on Overhead allocations
2.4. : Recording of costs and schedule of costs
of products.
11. Chapter-3: Costing methods: The costing of
resource outputs-Job Order Costing

Learning Outcomes
Up on completion of this chapter students should 3 WEEKS
be able to: 8 TH
{6TH - }
 Define and understand Job order costing
 Illustrate the application of cost accumulation
methods ( Job, batch…costing)
 Determine costs of cost objects including
allocation of overhead costs and treatment of
under or over applied overhead cost.

3.1: Job order, batch and contract costing

methods
3.1. Characteristics of each method
3.2. Accounting for direct and indirect costs,
including the treatment of waste, scrap,
spoilage and re work costs,
12. Chapter-4: The Process and Operation or service
costing methods:
2 WEEKS
Learning Outcomes {9TH - 10 TH }
Up on completion of this chapter students should
be able to:
 Define and understand Process and operation
costing
 Apply of process and operation costing
 Assign costs to products under FIFO and
Weighted Average methods in process costing

4.1. Characteristics of the process costing

method,
4.2. Identification and use of appropriate cost
units,
4.3. Valuation of process transfers and work in-
process using equivalent units of
production and based on FIFO and average
costing methods,
4.4. Accounting for normal and abnormal losses
and gains, joint and by-products
4.5. Scope of operation or service costing,
4.6. Identification of appropriate cost units,
Considerations relating to the collection,
classification and ascertainment of costs
13. Chapter-5: Cost Allocation
2 WEEKS
Learning Outcomes {11TH &12tTH}
Up on completion of this chapter students should
be able to:
 Define cost allocation and understand the
nature of cost allocation
 Allocate joint costs, common costs and
support department costs to cost objects

5.1. Explain the notions of ‘overhead costs’,

‘indirect costs’, ‘direct costs’, ‘traceable
costs’ and ‘allocated costs’.
5.2. Explain how accountants choose to create
‘cost centers or ‘cost pools’ in which to
gather together cost data.
5.3. Explain why and how costs may be allocated
from one cost pool or center to another.
5.4. Support department cost allocation
5.5. Joint and By-products
5.6. Common cost allocation
14. Chapter-6: Activity-Based Costing and
Management
2 WEEKS
Learning Outcomes {13TH& 14TH
Up on completion of this chapter students should
be able to:
 Define and understand Activity Based Costing
and its application
 Define and understand Activity based
management
 Determine cost of cost objects using Activity
Based Coting.

6.1. Activity-based costing; use of cost drivers

and activities
6.2. Activity Based Costing for Customer
Profitability
6.3. Activity Based Management
15. Teaching and learning Teaching and learning methods include among
techniques other:
 Lectures
 Discussions
 Projects
 Assignments
16. Assessments The evaluation scheme will be as follows:
Component Weight coverage
Test 1 25% Chapter 1, 2 &3
Test 2 15% Chapter 3 and 4
Assignment 10% Chapter 1 ,2,3
Final Exam 50% All chapters
17. Course Policy The success of this course depends on the
students’ individual and collective contribution
to the class discussions.
Students are expected to participate
voluntarily, or will be called upon, to contribute
to set exercises and problems. Students are also
expected to read the assigned readings and prepare
the cases before each class so that they could
contribute effectively to class discussions. They
m u s t attempt assignments by their own.
Proficiency in this course comes from
individual knowledge and understanding.
Copying the works of others is considered as
serious offence and leads to disciplinary actions.
18. Learning Resources Text Book:
 Horngren, Foster, &Datar. Cost Accounting: A
Managerial Emphasis. 9th Ed. 1997
 Horngren, Sunden& Stratton. Introduction to
Management Accounting. 11th Ed. 1999
Reference Books
 C.T Homgren, Introduction to Management
Accounting 4th to 8 th editions, 1999 USA
 C.T. Homgren, Cost Accounting: A Managerial
Emphasis 5th to 8th ecitionsprentice Hall Inc.
1982 to 1994
 Homgren, foster, &Datar, Cost Accounting A
Managerial Emphasis. 10 thEcition
 L.E. Heitger Managerial Accounting 1th and 2
nd editions, McGraw Hill , 1998, India
 GetuJemaneh, Management Accounting 1996.
 Ray H.Garrison, Managerial Accounting. 6th
edition
 Caluinengler, Managerial Accounting 2nd
edition
 L. Gayle Rayburn Principles of cost Accounting
using a cost Mangement Approach 4th edition
Richard DIR WIN Inc. 1989.
 Robert X. Kaplan Advanced Management
Accounting 1st and 2nd edition prentice
Haill, Inc, 1982 and 1989 (Chapters 2, 11,12,
and 13 only)