ETLS 505 -- Managerial Accounting & Performance Management

George Gleeson
Spring Semester 2008

Course Description

Class Outline

About the Instructor

Grad Engineering Home

Instructor:

Mr. George G. Gleeson

Web Links:

Garrison & Noreen Website: http://www.mhhe.com/garrison11e
Blackboard: http://blackboard.stthomas.edu

Blackboard site is for registered students only and requires a UST username and password.

Time:

Section 17, Saturdays, 8:30-11:30 AM

Location:

Saturdays-St. Paul Campus, OSS LL10

Telephone:

(651) 962-5757 (UST)
(651) 962-6419 (Fax)
(612) 825-8878 (Home)
gggleeson@stthomas.edu (E-Mail)

Required Text:

Required
Readings:

Garrison, Ray H., and Eric W. Noreen. Managerial Accounting (11th edition). Burr Ridge, IL: Irwin, 2006.
Readings notebook of topic outlines and handouts.

A copy of the following articles should be obtained by each student as a download from the University of St. Thomas library website. (See access and download instructions)

Collins, Jim. “Level 5 Leadership: The Triumph of Humility and Fierce Resolve.” Harvard Business Review, July-August 2005.
Drucker, Peter. "What Makes an Effective Executive." Harvard Business Review, June 2004.
Kaplan, Robert S. and David P. Norton. "Using the Balanced Scorecard as a Strategic Management System." Harvard Business Review, January-February, 1996.
Nohria, Nitin, William Joyce and Bruce Roberson. "What Really Works." Harvard Business Review, July 2003.
University of St. Thomas. Library Research Access. Link available on Blackboard.

Recommended Supplements:

Friedlob and Plewa. Financial and Business Statements. Barrons

Shim and Siegel. Modern Cost Management and Analysis. Barrons

Major
Assignments:

Readings: Readings are assigned for each topic area from the textbooks, articles and the handout materials. Supplemental readings are also identified as pertinent. Depending on individual skills and experience, it may also be useful for students to obtain a book on Excel. Readings should be done prior to class. Student Internet access and capability will be necessary.

Assignments: Problems, Internet exercises, or Case studies are due the next class following the assignment date. Please note that the assignments are QUESTIONS, PROBLEMS, INTERNET EXERCISES OR CASE STUDIES NOT EXERCISES. Problems will be graded on a 5-point basis with a grade of 5 being highest. Solutions should be neat and complete, including all supporting calculations. ALL assigned problems, exercises or case studies must be done utilizing computer spreadsheets or word processing. Student partners will present the solution for at least one assignment during the semester and will also present answers to assigned questions. Discussion questions will be discussed in class.

Examinations: Periodic quizzes will be short and emphasize definitions and concepts. The final examination will be comprehensive and will also cover concepts and definitions. See Blackboard for sample quizzes and exams.

Enterprise analysis case study: This case study requires analysis of the financial and non-financial information related to a selected company. Quantitative techniques and tools of analysis are used to evaluate published financial statements. Student analysis must cover the basic statements of an enterprise over a four-year period: Balance Sheets, Income Statements, and Cash Flow Statements. Students will need to obtain copies of company published annual reports. Additional information should be obtained on company and management performance utilizing source materials outside the company. The resulting paper will be graded on: 1) organization; 2) correct use and application of course materials; and 3) source materials and references. See Blackboard for required paper outline, recommended source materials and grading criteria.

Performance management paper: Students have two options for this assignment.

Balanced Scoreboard. Develop a balanced scoreboard for the student's work unit that is based upon the unit's mission, strategies, tactics and critical success factors.
Performance Improvement. Provide a plan of implementation for the student's work unit using one of the performance improvement techniques covered in this course identifying its usefulness and expectations for measurable improvement.

This paper will be graded on: 1) organization; 2) definition and applicability of key measurements; 3) relevance of critical success factors; and 4) references. A topic other than performance management can be selected with prior consent of the instructor. See Blackboard for recommended paper outline, reference materials and scorecard templates.

Learning Outcomes:

Students will demonstrate:

Students will understand the purpose and use of standard financial statements such as Balance Sheets, Income or Operating Statements and Cash Flow Statements and common ratios and tools utilized for statement analysis. Students will have the ability to utilize published statements for purposes of analysis and comparisons. (SE12) (T, TP, W)
Students will learn how to solve representative problems associated with cost behavior, cost-volume-profit analysis, process and job costing systems, budgeting, overhead allocation, transfer costing and pricing, productivity learning curves, activity based costing and capital investment. (TM4, MS1, MS6, SE1, SE6, SE7) (H, W)
Students will learn how to solve problems and make presentations as individuals, with another student partner and as members of a team. (MS2, SE9, TM2, TM3) (H, P, W)
Students will understand and learn how enterprise vision, values, mission, strategies, and initiatives should integrate and align within organizations and are reinforced by the use of financial and non-financial performance measurements throughout the organization. (MS9, MS7, SE15, TM1, TM7) (T, TP, W)
Students will learn to perform an enterprise analysis report including financial performance, peer comparisons, enterprise culture and history and organization management. (SE16, TM6) (TP, W)
Students will learn the application and importance of ethics, integrity and accountability in the enterprise culture and long-term success. (MS3, TM5, SE16, SE13) (P, W)

Outcomes Validation legend:
T -- Tests
TP -- Term Paper
CP -- Class Participation
P -- Presentation
H -- Homework
W -- Website Interaction

For example, for Learning Outcomes #1, students are tested (T) on financial statement format and ratios knowledge, and required to complete an Enterprise Analysis term paper (TP) of a public company from financial statement and other company information obtained by utilizing website (W) information and Excel templates provided.

Instructor Biography:

George Gleeson has been an instructor in the Engineering and Technology Management and M.B.A. graduate programs at St. Thomas since 1986. He has a B.B.A. degree from the University of Minnesota and has done graduate work there in Industrial Relations as well as the University of St. Thomas. He has worked as an accounting manager, human resource manager, logistics manager, sales manager, and general manager in distribution, service and manufacturing industries. He has also worked as a group controller at Control Data Corporation and as Chief Financial Officer at two other companies. Currently he works as a consultant with a primary focus on enterprise performance improvement and is principal in the training and consulting company, Performance Improvement Associates.

Grading Policy:

Enterprise analysis (TP, P) Performance management Papers (TP) Periodic quizzes (T) Final examination (T) Assignments and class participation (CP, P)			25% 10% 20% 25% 20%
Score to grade conversion is as follows:
92.0+ 90.0 to 91.9 87.5 to 89.9 82.5 to 87.4	A A- B+ B	80.0 to 82.4 77.5 to 79.9 72.5 to 77.4 70.0 to 72.4	B- C+ C C-
During the semester, student scores may be posted on Blackboard.

Course Objectives:

This course is specifically designed to provide orientation and understanding of financial and accounting terms, concepts, techniques, and statements as applicable to enterprise decision making. In that context, some time is spent on the principles of accounting and the traditional financial statements. However, the majority of course time and materials are focused on operations accounting and measurement. Performance management is covered in the context of financial and non-financial measurement. It is not necessary that students have prior course work in financial accounting or finance. Whenever possible, contemporary articles and experiences are utilized to provide real-world examples of the application of concepts and techniques. Spreadsheet software templates to facilitate analysis and measurement are also provided. Specific course objectives are as follows:

Provide orientation to and understanding of basic financial terms, principles, concepts, techniques, and statements.
Utilize aspects of this learning to perform representative analysis and problem solving.
Review and explore other techniques of enterprise control and performance measurement.
Compare and contrast financial management and performance measurement typical with industry practices.
Enable and facilitate the transfer of knowledge from principles, theories and general techniques to real world general and specific applications.

Course Methodology:

The assigned texts and readings will be used for approximately 50% of the material covered. Additional information will come from supplemental readings, lectures, multi-media materials, and class participation. Students are encouraged to introduce questions and materials on work related issues and other contemporary situations. This syllabus is utilized as a learning plan for assigned materials and may be changed to meet class needs.

Course Description:

This course integrates the concepts of financial accounting, cost accounting and performance measurement as they are applied in the enterprise. The course emphasizes the concepts, terms, and techniques for using accounting and measurement information in planning, decision-making, and performance evaluation. Topics include analysis of financial statements, manufacturing and operations costs, fixed and variable costs, capital investment analysis, pricing, job and process cost systems, budgeting, responsibility accounting, cost allocation, and activity-based costing. Also covered are operational measures emphasizing physical units, process analysis, productivity measurement, and other non-accounting operational key indicator measurements. Consideration is also given to the influence of such concepts as Total Quality Management (TQM), Just In Time (JIT), Benchmarking, the Balanced Scorecard, Reengineering, Six Sigma, and Baldrige Awards as they relate to accounting and performance measurements.

Students with Disabilities:

Qualified students with documented disabilities who may need classroom accommodations should make an appointment with the Enhancement Program – Disability Services office during the first two weeks of the semester. Appointments can be made by calling 651-962-6315 or in person in O’Shaughnessy Educational Center, room 119.

Attendance
Policy:

Students are expected to attend all class sessions. Circumstances which prevent attendance will be honored up to two instances. Absences in excess of two times may result in a lower grade for the course. Contact the instructor when a special situation arises. All absences require that the instructor be informed in advance.

Academic Integrity:

All students are expected to understand and follow the University of St Thomas policies on Academic Integrity. These are described at:
http://www.stthomas.edu/engineering/graduate/policies

Exams: Exams are one of the instruments used to evaluate the knowledge gained by an individual student of the class subject matter, and the progress towards meeting the outcomes of the class and the degree. To this end all exams (in class or take home) are intended to represent the effort of the individual and not a group effort unless specifically stated otherwise.

ETLS 505 Managerial Accounting & Performance Management

Course Schedule for Spring Semester 2008

Mr. George G. Gleeson

ETLS 505 Section 17 – Saturdays 8:30-11:30 AM

NOTES: Registered class members can go to the UST Blackboard Website
to access the “Topics” lectures prepared by George.
This requires your UST username and password.

Class / Date

Topics

Readings & Resources

Assignments

Session 1

Sat., Feb. 2

1) Accounting profession, function, standards, and ethics

2) Basic accounting principles, equations, and processes

Garrison & Noreen, Chp. 1

Peter Drucker HBR Article

Jim Collin’s HBR Article

Handouts

Friedlob & Plewa,
Pp. 1-24

G&N PowerPoint Chp. 1

Gleeson - Topic - Learning/Teaching Methodology

Gleeson - Topic - Performance Management Systems Intro

Topic 1 - Accounting profession, function, standards and ethics

Topic 2 - Accounting principles and equations

ALL

Questions:
1-3, 5, 8, 11, Handout Question

CLASS PHOTOS

Enterprise Analysis Assignments

Discussion topic:
What do employees at various levels need to know to be successful?

Session 2

Sat., Feb. 9

3) Traditional financial statements

4) Financial statements analysis and measurements

Garrison & Noreen,
Chps. 17 & 16

Friedlob & Plewa,
Pp. 25-99

G&N PowerPoint Chp. 17

G&N PowerPoint Chp. 16

Topic 3 - Financial Statements

Gleeson – Topic 4

ALL

Questions:
17-1, 2; 16-1, 3, 9

Problem:
17-12

Discussion topic:
Can we rely on published financial statements?

Session 3

Sat., Feb. 16

5) Cash flow statements

6) Sources and uses of financial information

7) Use of computer spreadsheet software for analysis

Friedlob & Plewa,
Pp. 101-213

Gleeson – Topic 5

Gleeson – Topic 6

Gleeson – Topic 7 (Excel)

ALL

Problem:
16-14

Discussion topic:
How can spreadsheet software and the internet be used in performance analysis?

Session 4

Sat., Feb. 23

8) Cost concepts and cost measurement

9) Cost behaviors and estimation

Garrison & Noreen, Chps. 2 & 5

Shim & Siegel,
Pp. 1-18; 115-131

G&N PowerPoint Chp. 2

G&N PowerPoint Chp. 5

Gleeson – Topic 8

Gleeson – Topic 9

A	Problem: 2-24 Questions: 5-1, 14, 15
B	Problem: 5-14 Questions: 2-2, 5, 9
ALL	ENTERPRISE ANALYSIS SPREADSHEET DUE Discussion topic: Enterprise research and use of UST library

Session 5

Sat., Mar. 1

Quiz

10) Cost-Volume Profit Relationships

11) Variable costing

12) Quality costs

Garrison & Noreen,
Chps. 6 & 7

Shim & Siegel,
Pp. 134-153

G&N PowerPoint Chp. 6

G&N PowerPoint Chp. 7

Gleeson – Topic 10

Gleeson – Topic 11

Gleeson – Topic 12

A	Problem: 7-13 Questions: 6-2, 4, 10
B	Problem: 6-19 Questions: 7-1, 3, 10
ALL	Discussion topic: What tools and techniques are useful for cost analysis? Discussion topic: Do we wish to project past cost behavior into the future?

Session 6

Sat., Mar. 8

13) Cost and overhead allocation

14) Activity-based costing

Garrison & Noreen,
Chps. 8 & 15

Shim & Siegel,
Pp. 67-101

G&N PowerPoint Chp. 8

G&N PowerPoint Chp. 15

Gleeson – Topic 13

Gleeson – Topic 14

Gleeson – Topic 15

A	Problem: 15-13 Questions: 8-2, 5, 10
B	Problem: 8-27 Questions: 15-2, 3, 6
ALL	Discussion topic: What are the various ways of allocating overhead?

Session 7

Sat., Mar. 29

Quiz

15) Job and project costing

16) Process costing

Mid-Semester Course Evaluations

Garrison & Noreen, Chps. 3, 4 & Appendix 3A

Shim & Siegel,
Pp. 19-41

G&N PowerPoint Chp. 3

G&N PowerPoint Chp. 4

Gleeson – Topic 16

A	Problem: 4-20 Questions: 3-4, 5, 16
B	Problem: 3-27 Questions: 4-2, 4, 13
ALL	Discussion topic: Where should job and process costs be used?

Session 8

Sat., April 5

17) Plans and budgets

Garrison & Noreen,
Chp. 9

Friedlob & Plewa,
Pp. 215-228

Shim & Siegel,
Pp. 155-176

G&N PowerPoint Chp. 9

Gleeson – Topic 17 – Planning and Budgeting

ALL

Problem:
9-18

Questions:
9-4, 7, 10, 11

Discussion topic:
Is planning and budgeting just a game?

Enterprise Analysis Project Paper Due

Session 9

Sat., April 12

18) Standard Costs and variance analysis

19) Inventory

Garrison & Noreen,
Chp. 10 & Appendix 9A

Friedlob & Plewa,
Pp. 229-242

Shim & Siegel,
Pp. 177-190

G&N PowerPoint Chp. 10

Gleeson – Topic 18

Gleeson – Topic 19

ALL

Performance Management Assignment

Questions:
10-2, 5, 8, 19

Discussion topic:
What are the benefits and limitations of standards?

Session 10

Sat., April 19

20) Performance management and measurement

21) Minnesota Council on Quality and Malcolm Baldrige Awards

Quiz

Handouts

Kaplan & Norton HBR Article

Nokria & Others HBR Article

Shim & Siegel,
Pp. 104-113

Topic 20 – Performance Management and Improvement

Gleeson – Topic 21

Discussion topic:
Is performance management and performance improvement really the bigger opportunity and which technique should we use?

Session 11

Sat., April 26

22) Flexible budgets and profitability analysis

23) Segment reporting-profitability analysis

Garrison & Noreen,
Chps. 11 & 12

Friedlob & Plewa,
Pp. 264-286

G&N PowerPoint Chp. 11

G&N PowerPoint Chp. 12

Gleeson – Topic 22

Gleeson – Topic 23

A	Problem: 11-22 Questions: 12-3, 7 , 12, 16
B	Problem: 12-18 Questions: 11-2, 9, 15
ALL	Discussion topic: How can we measure profits by separate product and service?

Session 12

Sat., May 3

24) Management decisions – costs pricing, special orders, etc…

25) Pricing

Garrison & Noreen,
Chp. 13

Shim & Siegel,
Pp. 191-204; 227-234

G&N PowerPoint Chp. 13

Appendix A

Gleeson – Topic 24

Gleeson – Topic 25

ALL

Enterprise Analysis Project Due

(Enterprise Analysis Resources link)

Problem:
13-18

Questions:
13-2, 9, 13, 16

Discussion topic:
What is the value of segment analysis and reporting?

Session 13

Sat., May 10

26) Capital investment and budgeting

27) New Developments

Final Course/Instructor Evaluation

Garrison & Noreen,
Chps. 14, Appendix A

Shim & Siegel,
Pp. 205-214; 236-258

G&N PowerPoint Chp. 14

Topic 26 – Capital Investment Decisions

Gleeson – Topic 27

ALL

Problem:
14-34

Questions:
14-2, 9, 10, 15

Discussion topic:
What are the non-financial factors to be considered in investment decisions?

Session 14

Sat., May 17

Final Exam

Performance Management Project Due

Learning Perspectives

The focus of this course is on financial and non-financial tools, techniques, and measurements useful to operating personnel working for profit oriented and non-profit enterprises. Operating personnel are meant to include line and staff functions of the enterprise, including manufacturing engineers and managers engaged in production or operations, as well as support personnel in functions such as logistics, purchasing, research and development, accounting, human resources, and marketing and sales. Learners should evaluate and understand how the concepts, techniques, and tools can be applied in order to improve decision-making and achieve better results. In that context, learners may wish to consider themselves as general managers or senior functional managers requiring information and understanding in order to make better decisions. Learners should utilize their own personal experiences and provide these experiences in class discussions to facilitate an understanding of the applications.

It is important that issues and opportunities are analyzed from the point of view of the good of the enterprise and its constituency. A narrow functional focus is usually not appropriate; nor is individual self-interest an appropriate perspective.

Very little time is spent on the mechanics of gathering and assembling financial information. In other words, this is not a course in debits and credits. In general, we wish to emphasize how concepts, techniques, and tools may be used, not just what and why. Put another way, we want to understand theories and principles in order to understand and use applications in making better decisions.

Special attention will be placed on new developments in managerial accounting and other performance improvement systems such as activity-based management (ABM), activity-based costing (ABC), JIT, TQM, benchmarking, ISO 9000, target costing, theory of constraints, etc.

We will also explore the use of personal computer spreadsheets, databases, and the Internet in helping to collect and manipulate data to facilitate providing and communicating decision-making information.

You will also have the opportunity and responsibility to present selected problem solutions or abstracts of articles to the class. You will know in advance of any presentation assignments.

Class time will approximate the following breakdown:

Class objectives 5 minutes
Assigned problem discussion 15 minutes
Discussion questions 20 minutes
Presentation/Abstracts/Quizzes 30 minutes
Breaks 15 minutes
Lecture/Discussion/Video 90 minutes

"The Balanced Scorecard Connects
Enterprise Strategies and Initiatives to Objectives and Measures
and Communicates These Aspects Throughout the Enterprise"

TOPIC LIST	KNOWLEDGE & COMPETENCIES OBJECTIVES
1. Accounting profession, function, standard, and ethics 2. Basic accounting principles, equations and process 3. Traditional financial statements	Demonstrate understanding of basic financial statement principles and formats, including Balance Sheets, Operating (Profit and Loss) and Cash Flow Statements
4. Cash flow statements 5. Financial statements analysis and measures 6. Sources and uses of financial information 7. Use of computer spreadsheet software for analysis	Utilize knowledge of financial statements, techniques of analysis, library and Internet resources to prepare an analysis of an enterprise.
8. Cost concepts and cost measurement 9. Cost behaviors and estimation	Demonstrate understanding of basic concepts, terms and definitions of costs and expenses and their behavior relative to volume of enterprise activity in manufacturing, retail, service, and non-profit enterprise.
10. Cost-volume-profit relationships 11. Variable Costing and Absorption Costing 12. Quality Costs	Demonstrate understanding of cost-volume-profit relationships and capacity planning and utilization. Demonstrate understanding of costs of quality theory and the techniques of collecting and analyzing these costs.
13. Cost and overhead allocations 14. Activity-based costing and responsibility accounting	Demonstrate understanding of basic concepts, terms and definitions of costs and expenses and their behavior relative to volume of enterprise activity in manufacturing, retail, service, and non-profit enterprise. Demonstrate understanding of the various techniques of assigning and allocating overhead costs to products and services.
15. Job and project costing 16. Process costing	Demonstrate understanding of cost systems and be able to compare and contrast job or project accounting vs. process accounting and the appropriate applications for each system.
17. Plans and budgets	Demonstrate understanding purpose, process and techniques of strategic and operational planning and budgeting.
18.Standard costs and Variance analysis 19. Inventory	Demonstrate understanding of basic principles of inventory management and logistics.
20. Performance management and measurement 21. Minnesota Council on Quality and Malcolm Baldrige awards	Demonstrate understanding purpose, process and techniques of performance management and measurement. Demonstrate the application of a balanced scorecard approach to a personal situation. Understand the strategic and tactical importance of financial and non-financial performance measurement and be able to apply these concepts and techniques to an actual work situation.
22. Flexible budgets and variance analysis 23. Segment reporting-profitability analysis	Demonstrate understanding of tools and techniques of cost and profit analysis of budgets and enterprise segments.
24. Management decisions-pricing special orders 25. Pricing - External and Internal	Demonstrate understanding various alternative techniques used for making management decisions and for pricing products and services.
26. Capital investments	Demonstrate understanding techniques of capital investment justification and evaluation including strategic non-financial justification.
27. New developments	Demonstrate understanding of some recent developments in managerial accounting and performance improvement.

ETLS 505 -- Managerial Accounting & Performance Management

"The Balanced Scorecard Connects Enterprise Strategies and Initiatives to Objectives and Measuresand Communicates These Aspects Throughout the Enterprise"

"The Balanced Scorecard Connects
Enterprise Strategies and Initiatives to Objectives and Measures
and Communicates These Aspects Throughout the Enterprise"