NYU Stern School of Business

Undergraduate College


Summer 2011

Instructor Details

Zoni, Laura



10- 180 KMC

Laura Zoni, Ph.D. in Accountancy, Università Bocconi; SDA Professor in Accounting, Finance and Control. Associate Professor at Catholic University (Piacenza, Italy). Area coordinator for MBA Program SDA Bocconi. Associate Visiting professor at STERN School of Business, New York University (1995-1998 and 2008-2010), at INSEAD, Fontainebleau (1999-2000). Member of the European Accounting Association (EAA), European Institute of Advanced Studies in Management (EIASM). Sometimes consultant to the United Nation Development Program and the European Union for management training projects in Eastern Europe, Russia, Kirghizstan, Kazakhstan and Mongolia. Management Control Systems and Performance Evaluation Consultant.


Course Meetings

MW, 6:00pm to 9:00pm

Tisch T-LC21

Final Exam: June 15, 2011

Schedule exceptions

Class will not meet on: Monday, May 30 (Memorial Day)


Course Description and Learning Goals

Managerial accounting includes a broad array of tools necessary to articulate, implement, monitor and refine an organization’s strategy. Managing the modern firm requires a significant amount of financial and non-financial information about the firm’s products, processes, assets, and customers, as well as the external environment.  This information is a key input to operational and strategic decisions: managing product-line portfolios, setting prices, managing customers’ relations, translating the strategy into a series of objectives, measures and targets, monitoring strategy implementation, and so on.

The main objective of this course is for the students to develop a comprehensive framework to think about managerial accounting issues and understand their broader implications for the organization, so as to be able to make more informed (and, thus, “better”) decisions in an uncertain environment. To develop such a framework, students will be required to become familiar with the mechanics of a number of management accounting tools, but ultimately the emphasis will be on obtaining a good grasp of the key conceptual issues. 


Course Outline

Outline at a Glance






Case to prepare






Introduction to the course

Management accounting as a lever for strategy implementation

Cost-Volume-Profit Analysis



Case Omero Orlandi





Measuring relevant costs and revenues for decision making (short term)

(Short-term) Decision analysis: strategic consideration



Case Baldwin Bycicles





Measuring and managing the product and customer performance

Traditional versus ABC cost accounting system

Case Destin Brass


Case Khanthal (A)


7, 8

Mid term exam





Strategic planning and strategic decision making through the use of profit plan


Newport Stationary Store (Exercise)

Case Cafes Monte Bianco





Integrated target setting (financial and non-financial) through the use of the balanced scorecard

Review for the final exam



Case Transworld Auto Parts (A)


13, 14

Final exam



Teaching Materials

The required textbook is Garrison, Noreen and Brewster, Managerial Accounting, McGrawHill, 13th edition, from now on GNB.

Practice problems are taken form the text. The solutions to the problems will be published on BB under the folder “Solutions”.

Class participationThe grade for class participation will depend on the quality of your interaction and participation in class discussions.  You are expected to prepare and discuss the case questions and any other assigned readings.

Midterm and Final Exam.  Both midterm and final exam will be in-class, closed-book exams.  You may use a double sided sheet of notes (typed or hand written). You must use a pen (NOT a pencil).


Assessment Components

The course grade will be based on class participation, a midterm exam and a final exam, as follows:



At NYU Stern we seek to teach challenging courses that allow students to demonstrate their mastery of the subject matter.  In general, students in undergraduate core courses can expect a grading distribution where: 

Note that while the School uses these ranges as a guide, the actual distribution for this course and your own grade will depend upon how well you actually perform in this course.



The process of assigning grades is intended to be one of unbiased evaluation. Students are encouraged to respect the integrity and authority of the professor’s grading system and are discouraged from pursuing arbitrary challenges to it.

If you believe an inadvertent error has been made in the grading of an individual assignment or in assessing an overall course grade, a request to have the grade re-evaluated may be submitted. You must submit such requests in writing to me within 7 days of receiving the grade, including a brief written statement of why you believe that an error in grading has been made.


Professional Responsibilities For This Course




In-class contribution is a significant part of your grade and an important part of our shared learning experience. Your active participation helps to evaluate your overall performance.


Classroom Norms


Stern Policies

General Behavior
The School expects that students will conduct themselves with respect and professionalism toward faculty, students, and others present in class and will follow the rules laid down by the instructor for classroom behavior.  Students who fail to do so may be asked to leave the classroom. 


Collaboration on Graded Assignments
Students may not work together on graded assignment unless the instructor gives express permission. 


Course Evaluations
Course evaluations are important to us and to students who come after you.  Please complete them thoughtfully.


Academic Integrity

Integrity is critical to the learning process and to all that we do here at NYU Stern. As members of our community, all students agree to abide by the NYU Stern Student Code of Conduct, which includes a commitment to:

The entire Stern Student Code of Conduct applies to all students enrolled in Stern courses and can be found here:

Undergraduate College: http://www.stern.nyu.edu/uc/codeofconduct
Graduate Programs: http://w4.stern.nyu.edu/studentactivities/involved.cfm?doc_id=102505

To help ensure the integrity of our learning community, prose assignments you submit to Blackboard will be submitted to Turnitin.  Turnitin will compare your submission to a database of prior submissions to Turnitin, current and archived Web pages, periodicals, journals, and publications.  Additionally, your document will become part of the Turnitin database.


Recording of Classes

Your class may be recorded for educational purposes


Students with Disabilities

If you have a qualified disability and will require academic accommodation of any kind during this course, you must notify me at the beginning of the course and provide a letter from the Moses Center for Students with Disabilities (CSD, 998-4980, www.nyu.edu/csd) verifying your registration and outlining the accommodations they recommend.  If you will need to take an exam at the CSD, you must submit a completed Exam Accommodations Form to them at least one week prior to the scheduled exam time to be guaranteed accommodation.


Course Schedule


May, 23

Session 1, 2


  • Introduction to the course
  • Differences between financial accounting and management accounting
  • Management accounting to support strategy implementation
  • Cost-volume-profit analysis:
  • Single-product analysis
  • Multiple-product analysis
  • Degree of operating leverage


Case: Omero Orlandi  (on Blackboard SS 1-2)




  • Complete the business area strategic analysis based on the information available in the case - Table 1. Some of the information required in Table 1 may not be available.


  • Using financial statement analysis diagnose the financial weaknesses of the company – Table 2


  • Using attachments 3-7 in the case, prepare a segmented income statement – Table 3


  • Articulate ratio analysis by business area – Table 4 (attempt only)


  • Based on the above information, make suggestions to improve the business.

May 25

Session 3, 4


  Measuring relevant costs and revenues for decision making


  • Capacity Allocation Decisions
  • Special pricing
  • Make or Buy
  • Discontinuation Decision


  (Short-term) decision analysis: strategic consideration


  Case:  Baldwin Bicycles (on Blackboard SS 3-4)




  • Should Baldwin Bicycles accept the Challenger deal? What are the risks involved with the decisions?


June 1st

Session 5, 6


  Measuring and managing the product and customer performance


Cost assignment

  • Distinguishing between direct and indirect costs
  • Plant-wide vs departmental overhead rates
  • Under- and over-recovery of overheads

Activity-based costing

  • The differences between traditional and activity-based costing systems
  • The functioning of activity-based costing systems
  • The design of activity-based costing systems



Case Destin Brass (Harvard Business School Case 9-190-089)




  • Be prepared to explain the allocation scheme proposed by the three costing systems mentioned in the case:
    • allocation based on labor cost (Exhibit 3)
    • allocation based on machine hours (Exhibit 4)
    • allocation based on transaction analysis by activity (Exhibit 5)


  • Identify pros and cons of each allocation scheme.
  • Compute the cost of each product using the third allocation scheme.
  • Which are the market implications of the cost information developed in 3.? Should Destin Brass Products drop pumps?


Case: Kanthal (A) (Harvard Business School Case 9-190-002)


  • Using a two-stage cost allocation diagram, describe Khantal’s old cost system. Why have selling and administrative costs not traditionally been traced to individual products and customers? Why did Ridderstrale feel it was inadequate for the new strategy? 
  • Evaluate the approach taken at Kanthal to compute profit of individual order-lines, including assigning S&A costs to each customer order. How were the costs of customer orders and of producing non-stocked items estimated?
  • Consider a product-line with 50% gross margin (after subtracting volume related costs from prices). The cost of handling an individual customer order is SEK 750, and extra cost to handle a production order for a non-stocked item is SEK 2,250.
    • Compare the operating profits and profit margins of two small orders both for SEK 2,000. One order is for a stocked item, and the other order is for a non-stocked item.
    • Compare the operating profits and profit margins for two large customers. Customers A and B both purchased SEK 160,000 worth of products this year. Customer A placed three orders, for three different non-stocked items. Customer B placed 28 orders; 6 for stocked items and 22 for non-stocked items.
  • What should Ridderstrale do about the large number of unprofitable customers revealed by the account management system? Should sales persons be allowed to accept an unprofitable order from a customer?

June 6th

Session 7,8


Midterm exam

June 8th

Session 9,10


Strategic planning and strategic decision making through the use of profit plan

  • The multiple functions of budget and its conflicting roles
  • Structure of the master budget
  • Implication of budget setting on strategic decision making 


Incident Newport Stationary Store (BB session 8,9, will be solved in class)


Case: Cafes Monte Bianco (Harvard Business School Case 9-198-088)



  • Evaluate the attractiveness of switching all production to private brand coffee. Estimate the net profit, the cash flow and the ROE (with its determinants).
  • What assumptions did you make to complete your analysis? How critical are these assumptions to your conclusions?
  • Based on your analysis, what recommendations would you make to Giacomo Salvetti?


June 13th

Session 11, 12

Integrated (financial and non-financial) performance measurement and management through the use of the balanced scorecard

Case: Transworld Auto (A) (Harvard Business School Case 9-110-027)


  1. What is Transworld Auto Part’s rationale for implementing a strategy map and balanced scorecard exercise?
  2. How well do the strategy map and BSC of the two divisions reflect the divisions’ strategies?
  3. How helpful are the strategy maps and BSC of two divisions in directing actions? And in assessing the division’s performance?
  4. Would you propose any change to the strategy maps and BSC of the two divisions?



June 15th

Session 13,14


Final Exam


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