There are no prerequisites

Course Description

This course covers the managerial use of accounting, financial, and operating data for planning, control, and decision making. The course is designed for managers and entrepreneurs who need hands-on knowledge and tools in processing, developing, and analyzing financial, cost, and business data for managerial use. Topics include strategic cost management, cost analysis, break-even and contribution analysis, cost behavior analysis, activity-based costing, responsibility accounting and corporate balanced scorecard, budget for profit planning, short-term decisions, and capital budgeting.


Delta Publishing

For many years, Delta Publishing has offered a wide variety of continuing education courses for financial professionals. Topics covered by Delta’s courses include accounting, financial management, budgeting, investments, financial statement reporting, business management, IFRS, ethics, valuations, real estate, and business writing. The diversity and breadth of Delta’s course offerings make the company a prolific and unique contributor to the CPE world. Delta’s well-credentialed authors and contributors have also been published in numerous academic and professional journals and quoted by some of the leading financial media outlets.

Course Specifics

Jun 19, 2017
There are no prerequisites

Compliance Information

Qualifies for CA Fraud: No

Learning Objectives

Upon successful completion of this course, participants will be able to:

Chapter 1

  • Define management accounting.
  • Distinguish between management accounting and its related fields such as cost accounting and financial accounting.
  • Identify the three broad purposes for which the manager needs cost information.
  • Identify the role of the controller, the treasurer, and the chief financial officer (CFO).
  • Cite the role of the Cost Accounting Standards Board (CASB).
  • Identify some new developments that took place in the cost/management accounting discipline over the last two decades.
  • List three popular certificates that recognize the expertise in the fields of cost/managerial accounting and internal auditing - the Certified Managerial Accountant (CMA), the Certified in Financial Management (CFM), and the Certified Internal Auditor (CIA).

Chapter 2

  • Identify and cite examples of each of the basic cost elements involved in the manufacture of the product.
  • Define various cost concepts.
  • Distinguish between variable costs and fixed costs and explain the difference in their behavior.
  • Differentiate between the financial statements of a manufacturer and those of a merchandising firm.
  • Differentiate between the traditional income statement and the contribution income statement and their uses.
  • Define contribution margin.

Chapter 3

  • Define job order costing and process costing.
  • List the components of a job cost sheet.
  • Identify how to prepare journal entries for a job order cost system.
  • Identify how to develop a predetermined overhead rate.
  • Identify how to dispose of over-applied or under-applied overhead.

Chapter 4

  • Cite the problems associated with traditional overhead costing methods.
  • Cite how activity-based costing (ABC) would enhance product costing accuracy.
  • Identify the four-step procedure involved in activity-based costing.
  • Classify different cost drivers with different cost pools.
  • Define activity-based management (ABM).

Chapter 5

  • List and define various contribution margin concepts.
  • Compute the sales necessary to break even or to achieve a target income.
  • Identify how to prepare break-even and profit-volume charts.
  • Identify how to perform 'what-if' analysis using the contribution approach.
  • Define margin of safety.
  • Identify the impact of a change in sales mix on profitability.

Chapter 6

  • Define and cite examples of variable costs, fixed costs, and mixed costs.
  • Identify four methods of estimating cost functions: engineering analysis, account analysis, high-low method, and least-squares regression method.
  • List the advantages and disadvantages of the high-low method for developing a cost-volume formula.
  • Distinguish between committed and discretionary fixed costs.
  • Identify how to develop a formula using the high-low method.
  • List the advantages and disadvantages of the least-squares method.
  • Identify how to develop a cost-volume formula using the least-squares method.
  • Identify various regression statistics such as the coefficient of determination and t-value.
  • State the need for multiple regression analysis.

Chapter 7

  • Define budgeting.
  • Cite important aspects of master budget interrelationships.
  • Identify how to prepare sales, production, cost, and cash budgets.
  • Identify how to develop a pro forma balance sheet and pro forma income statement.
  • State how budgets aid in planning and control and how a computer-based financial modeling approach may be used in the planning process.
  • Distinguish between traditional budgeting and zero base budgeting (ZBB).

Chapter 8

  • Define responsibility accounting and state how important it is for managerial control.
  • Distinguish between three types of responsibility centers and see how they are evaluated.
  • Calculate different types of variances for manufacturing costs--direct materials, direct labor, and manufacturing overhead.
  • Prepare a flexible budget and explain its advantage over the static budget format.
  • Calculate and properly interpret the fixed overhead spending and volume variances.
  • Distinguish between the two-way, three-way, and four-way variance analysis for factory overhead.

Chapter 9

  • Compute return on investment (ROI) by means of the Du Pont formula and state how changes in sales, expenses, and assets affect the investment center's performance.
  • Calculate the residual income (RI) and explain how it differs from ROI in measuring divisional performance.
  • Identify how ROI and RI measures affect the division's investment decision.
  • Cite the basic features of the Corporate Balanced Scorecard.
  • Identify how to establish the right transfer price.
  • List the strengths and weaknesses of various transfer prices between segments of an organization.

Chapter 10

  • Identify the costs that are relevant for a particular decision.
  • Identify how to decide if an order should be accepted at below the normal selling price.
  • Determine the bid price on a contract.
  • Identify how to determine whether to drop or keep a product line or service.
  • State why the contribution margin per unit of limited resource is the deciding factor in product mix decisions with limited resources (such as warehouse or display space).

Chapter 11

  • List and describe the types and special features of capital budgeting decisions.
  • Define the time value of money concept.
  • List five capital budgeting techniques.
  • Identify how to select the best mix of projects with a limited capital spending budget.

Chapter 12

  • State how income tax factors affect investment decisions.
  • Calculate after-tax cash flows, initial outlay, differential cash flows, and terminal cash flow.
  • List the types of depreciation methods.
  • Identify the effect of Modified Accelerated Cost Recovery System (MACRS) on capital budgeting decisions.

Table of Contents

Chapter 1 – Introduction to Management Accounting

Learning Objectives

Financial Accounting vs. Management Accounting

The Work of Management

Cost Accounting vs. Management Accounting

The Organizational Aspect of Management Function


Cost Accounting Standards Board

Managerial Accounting in the New Production Environment

Total Quality Management and Quality Costs

Continuous Improvement (CI) and Benchmarking

Business Process Reengineering (BPR)

Corporate Balanced Scorecard

Theory of Constraints (TOC) and Bottlenecks Management

The Certified Management Accountant (CMA)

The Certified Internal Auditor (CIA)

Chapter Summary

Chapter 1 – Review Questions

Chapter 2 – Cost Classifications and Profit Concepts

Learning Objectives

Cost Classifications

Costs by Management Function

Product Costs and Period Costs

Direct Costs and Indirect Costs

You Should Remember

Variable Costs, Fixed Costs, and Mixed Costs

Unit Costs and Total Costs

Costs for Planning, Control, and Decision Making

Merchandising vs. Manufacturing Organizations


Manufacturing organizations

Income Statements and Balance Sheets-Manufacturer

The Contribution Income Statement

Chapter Summary

Chapter 2 – Review Questions

Chapter 3 – Accumulation of Costs-Job Order Costing

Learning Objectives

Job Order Costing and Process Costing Compared

Job Order Costing

Job Cost Records

Factory Overhead Application

Predetermined Factory Overhead Rate

Disposition of Under- and Over-Applied Overhead

Plant-wide vs. Departmental Overhead Rates

Chapter Summary

Chapter 3 – Review Questions

Chapter 4 – Activity-Based Costing and Activity-Based Management

Learning Objectives

Composition of Product Cost

Overhead Costing: A Single-Product Situation

Overhead Costing: A Multiple-Product Situation

Plant-Wide Overhead Rate

Departmental Rates

Plant-wide Rate vs. Departmental Rates

Problems with Costing Accuracy

Why Volume-Related Cost Drivers Fail

Activity-Based Product Costing

First-Stage Procedure

Second-Stage Procedure

Comparison of Product Costs

The Choice of Cost Drivers

Using Activity-Based Costing To Make Marketing Decisions

Activity-Based Management

Process Value Analysis

Understanding What Causes Costs

Value-Added and Nonvalue-Added Activities

Activity Drivers and Categories

The Value Chain of the Business Functions

Strategic Cost Analysis

Chapter Summary

Chapter 4 – Review Questions

Chapter 5 – Break-Even and Cost-Volume-Profit Analysis

Learning Objectives

Questions Answered by CVP Analysis

Contribution Margin (CM)

Break-Even Analysis

Graphical Approach in a Spreadsheet Format

Determination of Target Income Volume

Impact of Income Taxes

Margin of Safety

Some Applications of CVP Analysis and What-If Analysis

Sales Mix Analysis

Assumptions Underlying Break-Even and CVP Analysis

Chapter Summary

Chapter 5 – Review Questions

Chapter 6 – Analysis of Cost Behavior and Cost Estimation

Learning Objectives

A Further Look at Costs by Behavior

Types of Fixed Costs—Committed or Discretionary

Analysis of Mixed (Semi-variable) Costs

Relevant Range

Engineering Analysis

Account Analysis

The High-Low Method

Regression Analysis

Regression Statistics

Correlation Coefficient (R) and Coefficient of Determination (R2)

Use of a Spreadsheet Program for Regression

Using Regression on Excel

Excel Regression Output

Chapter Summary

Chapter 6 – Review Questions

Chapter 7 – Budgeting for Profit Planning and Financial Modeling

Learning Objectives

Types of Budgets


The Sales Budget

Monthly Cash Collections from Customers

The Production Budget

Inventory Purchases—Merchandising Firm

The Direct Material Budget

The Direct Labor Budget

The Factory Overhead Budget

The Ending Finished Goods Inventory Budget

The Cash Budget

The Budgeted Income Statement

The Budgeted Balance Sheet

Chapter Summary

Chapter 7 – Review Questions

Chapter 8 – Responsibility Accounting and Cost Control through Standard Costs

Learning Objectives

Responsibility Accounting and Responsibility Center

Standard Costs and Variance Analysis

Materials Variances

Labor Variances

Variable Overhead Variances

Flexible Budgets and Performance Reports

Fixed Overhead Variances

Methods of Variance Analysis for Factory Overhead

Nonfinancial Performance Measures

Chapter Summary

Chapter 8 – Review Questions

Chapter 9 – Performance Evaluation, Transfer Pricing and Decentralization

Learning Objectives

Rate of Return on Investment (ROI)

The Breakdown of ROI - Du Pont Formula

ROI and Profit Planning

Residual Income (RI)

Residual Income and Economic Value Added

Investment Decisions under ROI and RI

Corporate Balanced Scorecard

Transfer Pricing

Market Price

Cost-Based Price—Variable or Full Cost

Negotiated Price

These transfer pricing strategies are summarized in Figure 3.

Chapter Summary

Chapter 9 – Review Questions

Chapter 10 – Relevant Costs and Short-Term Decisions

Learning Objectives

Relevant Costs Defined

Pricing a Special Order

Bid Price

Outsourcing: The Make-or-Buy Decision

The Sell-or-Process-Further Decision

Keeping or Dropping a Product Line

Product Mix Decisions in the Presence of Limited Resources

Theory of Constraints

Chapter Summary

Chapter 10 – Review Questions

Chapter 11 – Long-Term Investment and Capital Budgeting Decisions

Learning Objectives

What Are the Types of Investment Projects?

What Are the Features of Investment Projects?

Understanding the Concept of Time Value of Money

How Do You Calculate Future Values—How Money Grows?

Future Value of an Annuity

What Is Present Value—How Much Money Is Worth Now?

Present Value of an Annuity

Use of Financial Calculators and Spreadsheet Programs

How Do You Measure Investment Worth?

Payback Period

Accounting Rate of Return

Internal Rate of Return

Net Present Value

Can a Computer Help?

Summary of Decision Rules Using Both IRR and NPV Methods

Profitability Index

How to Select the Best Mix of Projects with a Limited Budget

Chapter Summary

Chapter 11 Review Questions

Chapter 12 – A Further Look at Capital Budgeting

Learning Objectives

How Do Income Taxes Affect Investment Decisions?

The Long and Short of After-Tax Cash Flows

Initial Investment—Incremental Investment

Tax Effects of Disposal

Differential Flows over the Project's Life

Terminal Cash Flow

Types of Depreciation Methods

Straight-Line Method

Sum-of-the-Years'-Digits (SYD) Method

Double-Declining-Balance (DDB) Method

Units of Production Method

Which Method to Use

How Does MACRS Affect Investment Decisions?

Chapter Summary

Chapter 12 Review Questions

Review Question Answers and Rationales



Final Examination

Answer Sheet

Course Evaluation

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