COURSE NUMBER: MBA224A.2

COURSE TITLE: Managerial Accounting

UNITS OF CREDIT: 2 units

INSTRUCTORS: Jose Plehn-Dujowich

CLASS WEB PAGE LOCATION: http://bspace.berkeley.edu

MEETING DAY(S)/TIME: Thursday, 4:00-6:00PM

PREREQUISITE(S): MBA202

CLASS FORMAT: There will be lectures and a team based project involving financial data analytics and designing a management performance dashboard in a cloud-based platform.

REQUIRED READINGS: A textbook will be used.

BASIS FOR FINAL GRADE:

Final Presentation (Team) 25%

Final Dashboard (Team) 25%

Final Exam 20%

Homework 20%

Class Participation 10%

ABSTRACT OF COURSE'S CONTENT AND OBJECTIVES:

You will learn how to make both high-level and practical business decisions using accounting information. In many ways, managerial accounting represents the intersection of accounting and strategy. With the advent of cloud technology, business intelligence platforms, and Big Data, much of managerial accounting in practice is now being performed on the cloud using data analytics through reporting tools like Tableau. We will leverage such technology in the final project, for which you will have access to a unique dataset on the financial performance of companies and households in the US. The final project requires you to build a customized cloud-based dashboard to evaluate the risk, profitability, and growth potential of a market and plan your budget, all using accounting information.

The course is designed for non-accounting specialists: we will focus on the kind of accounting you need to know to be able to make business decisions in your own functional area, such as sales, marketing, finance, product development, engineering, or operations. The aim of the course is to be solution-oriented: How can accounting information assist with solving a problem?

The main learning objectives of the course are that you be able to:

1. Use accounting information in managerial decision-making.

2. Design a performance management system and dashboard using data analytics, business intelligence, and cloud technology (final project).

3. Know how managerial accounting reacts to technological and environmental changes.

4. Understand how accounting cost data must be tailored to specific management issues.

5. Use budgets and costs for planning and control, so as to formulate a business plan.

6. Utilize the relation between costs, profits, and level of sales activity, such as to estimate the level of sales required to reach a target level of profit.

7. Evaluate the reporting of managerial accounting information in terms of ethical considerations.

8. Apply both the single cost-driver approach and activity-based costing (ABC) to the allocation of overhead, and compare them in terms of cost information quality; this is especially relevant when resources are shared across multiple product lines and markets.

9. Analyze accounting data by application of cost-volume-profit concepts, such as calculating your breakeven point.

10. Analyze accounting data for making short run decisions, such as deciding which products to kill, which markets to enter, and how to price your products.

11. Evaluate operational budgeting in terms of the process by which it is implemented and its benefits to the organization, so as to assist with business plans.

12. Apply the concept of flexible budgeting for variance analysis, so as to understand what went wrong versus right in the business planning process.

13. Apply commonly used techniques such as ROI and Residual Income for measuring the performance of investment center managers.

14. Evaluate proposed capital budget expenditures on the basis of commonly used project assessment techniques.

15. Understand the balanced scorecard concept to understand how the overall business is performing in the context of the marketplace and competitors.

BIOGRAPHICAL SKETCHES:

I am a new Visiting Professor of Accounting at Haas. I got my PhD in economics from the University of Chicago, and got undergraduate degrees in economics and management science from MIT. I have published in accounting, economics, management information systems, innovation, and entrepreneurship. I am the Earl Smith Professor of Accounting at Saint Mary’s College of California, where I teach managerial accounting. I recently moved to the Bay Area, having previously been an accounting professor at Temple University in Philadelphia, PA.

I am also an entrepreneur. I am Chairman, Co-Founder, and Chief Research Officer of Powerlytics. We have a proprietary database of the tax returns of all companies and households in the US. This means we have complete financial statements on all 27M companies in the US, and complete 1040’s and associated schedules (itemized deductions, Schedule C, etc.) on all 140M tax filers in the US. The data is de-identified, so we aggregate it by industry / region / size / demographics. The data can be used for credit scoring, benchmarking your financial performance, and sizing granular markets.