• Managerial Accounting

    Master Budgeting

    Submitted by: Lisa Banks, Mott Community College

    I generally assign a personal budgeting problem to my students in the Master Budgeting chapter. The problem includes decision analysis in that they also have to determine the true cost of continuing on for their Bachelor's degree (including opportunity cost of foregone wages).

    Manufacturing Simulation

    Mabel Machin, Valencia College

    Manufacturing simulation with Legos. Download the PDF.

    Fixed Versus Variable Costs: An Individual Field Trip

    Submitted by Janet Jamieson, University of Dubuque

    Fixed Versus Variable Costs: An Individual Field Trip.
    Jamieson Field Trip Doc

    Purchasing and Selling Merchandise Inventory

    Submitted by Scott Birk, Portland Community College

    I have two decision trees that help students understand the use of cash receipts and cash payments journals in a merchandising environment.

    Auditing Internal Controls

    Submitted by Martha Cranford, Rowan Cabarrus Community College

    I have my students in groups of 4 go to a local restaurant (not expensive) and watch the operations of the business. They then write a report on the Internal Controls of the Restaurant; what is missing and what is being done correctly. A lot of times; the manager likes to receive a copy of the report.

    Plant Tour Visit

    Submitted by Calian Bridgemohan, Lonestar College

    A good idea is to schedule a plant tour of a manufacturing facility for students to get a firsthand look at the stages of manufacturing. This will certainly help with understanding cost and managerial accounting concepts related to inventories, cost of goods sold, and finished goods inventory. It will also help in recognizing concepts like JIT, MOH, Indirect Costs, FIFO, LIFO, Process Costing, Job Costing and other related written concepts.Additional Materials.

    Budgeting, Planning and Time Value of Money

    Submitted by Todd A. Jensen, CPA Sierra College, Rocklin, CA

    It's no secret that an eighty minute class can be easily broken into two shorter and more digestible 35 minute sessions if a ten minute class activity is inserted in the middle to break-up the lecture. The issue is finding activities that pertain to the topic at hand, are engaging, and take only ten minutes.

    In my accounting classes when we are talking about budgeting and planning or time value of money, I like to take a break and remind the students how long they will likely live based on The Longevity Game that is at Northwestern Mutual's (an insurance company) website.

    This is a great tool because it clearly demonstrates how behavior (eating, drinking, stress, seatbelt usage, exercise) directly influences lifespan. Also, the graphics are great fun and there is always a student willing to volunteer to answer the rather personal questions. Many times, I'll end up with a student that is expected to live past 100. This really makes them think twice about planning for the future.

    Process Cost Accounting and Calculation of Ending Inventories

    Submitted by Sandra J. Kemper, CPA, Front Range Community College

    Divide class into production teams. Each team selects a supervisor who assigns students to each production line step based on the process listed in the handout (Manufacturing Process and Costing Activity). After the team completes the assemblies, they are asked to calculate the cost of raw materials remaining, goods in process, and finished goods, and submit this information for their team. Completion of the activity is part of their class participation grade for the course. The activity takes 10-15 minutes total.

    Provides a hands-on example of a manufacturing process, an opportunity for the students to work together in teams, and students get to keep the bags of candy assembled.

    Additional Materials

    • Manufacturing Process and Costing Activity handout
    • Ziplock sandwich bags and various candies. I have used chocolate for one subassembly and hard candies for the second subassembly.
    • Manufacturing Process and Costing Activity
     

    Profit Planning

    Submitted by Traci Nobles, Austin Community College

    Learning Objectives included:

    • How to prepare a sales budget
    • How to prepare cash collections budget
    • How to prepare purchase budget
    • How to prepare cash disbursements budget
    • How to prepare operating expense budget
    • How to prepare cash budget
    • How to prepare the budgeted income statement
    • How to prepare the budgeted balance sheet
    • Demonstrate appropriate use of Excel

    This project requires the student to demonstrate the ability to prepare a profit plan (budget) for a merchandise company. It requires the students to complete various parts of the budget and also requires knowledge of financial accounting subjects such as FIFO, income statement, and balance sheet preparation.

    I also use this project as a demonstration of the student’s ability to use Excel properly. They are required to use only formulas and cell-referencing for most of the spreadsheet.

    I assign an additional writing component to this project that requires the student to outline the steps required in preparing the budget and any problems encountered. They also have to come up with 3 suggestions for increasing net operating income and use their budget to prove that net operating income does increase.

    Note: This budget project was developed by several faculty members at Austin Community College. Specifically, the write-up of the budget was given to me by Professor Denise White.

    Rationale

    I have had excellent results utilizing this in my classroom. My students learn that budgets can be very powerful tools especially when prepared using Excel. They are also required to remember the concepts that were taught in principles of financial accounting and this is a great refresher.

    Additional Materials

     

    Various Concepts in Managerial Accounting

    Including Job order costing, the management process (plan, do check act), project management, variable costing, standard setting and scrap management.

    Submitted by Jen Oliver, Quinebaug Valley Community College

    On the first day of class, the class is broken up into groups of 4-5 students. Each group is given a bag containing 50 straws and 25 paper clips and the simple instructions: create the tallest free standing straw tower you can in 20 minutes. At the end of the 20 minute period (or sooner if the group is satisfied with their tower), I measure the height of each tower and ensure that it is indeed free standing. I also determine how many straws and paperclips were used, unused and damaged (i.e. chewed). I take pictures of each tower and the group.

    In the next class, we discuss job order costing. I import the pictures I have taken into a PowerPoint presentation and reflect back on the similarities and differences in each tower. I set the price per unit of direct material and ask the groups to determine the direct material cost of their project. (Scrapped material is included!) I set a wage rate and ask them to calculate direct labor for 20 minutes of work and tell them the variable overhead per unit (we have not learned how to calculate that yet). I set a selling price per inch (non-free standing towers don't fetch as high a price as freestanding ones, I call these the "value" products) and ask them to determine the unit contribution margin. Students enjoy seeing whose tower was the most profitable, and talk about why even ones with lower CM might be produced (i.e. sturdier, more expensive towers can be marketed as "industrial strength".) Prizes are awarded for tallest and highest CM.

    We also spend time talking about the production process, i.e. who evolved as the leader, how duties were assigned (did it help?), the impact of the plan/do/check/act cycle, standard setting for future production. We also discuss how better communication with workers on the line can lower costs (i.e. they might have been more careful about wasting the materials under their control), and what we might do differently in production next time.

    Rationale

    This project works because it provides students with active learning that can easily be recalled in later lectures to enhance their understanding of the material. I like this activity because it allows me to introduce concepts on the first day of class, when I know that most students have not started reading the text yet. It also provides students with friendly competition and a way to get to know each other. The pictures I take help me learn everyone's name, too!

    Additional Materials

    • 1 bag, 50 straws and 25 paperclips per group
    • Tape measure
    • Digital camera
     

    Process Costing and Variances

    Submitted by Idalene R. Williams, PhDMetropolitan Community College Omaha, NE

    Take students on a service learning trip, i.e. manufacturing plant (bakery, chocolate).

    Students will have hands on experience in identifying the various departments (for example, a bakery: mixing department, shaping department, or packaging); the tour guide can speak to/address standard versus actual variances; they will see in action how processes move from one department to another.

    Additional Materials

    Approval from your institution to take students on a trip off campus grounds.