Managerial Accounting Class Research Articles

Integrating ESG in a Managerial Accounting Class

Among organizations and businesses, there has been a growing global attention on companies’ approach to climate change and sustainable development. Concurrently, the United States, Securities and Exchange Commission (SEC) has announced the intent to require publicly traded companies to disclose information on climate-related risks (SEC, 2022), signaling a need for carbon emission reporting integrated with financial statements. Accounting practitioners and educators are thus concerned with accounting students’ preparedness in developing skillsets that will meet the current demands for integrated reporting of climate-related and other sustainability or ESG mitigation measures (AAA, 2023). Despite this growing concern, few accounting cases address sustainability/ESG management. This case requires students to use data analysis to estimate the cost-benefit analysis across three variable costing budgets in a production cycle of a manufacturing plant while integrating the estimation of carbon emissions attributed to a number of products produced and sold. Students could synthesize relevant information on ESG issues related to production and make decisions on sustainable approaches to inventory production.

Increasing the efficiency of delivery operations and customer profitability analysis with a time-driven activity-based costing model

Learning outcomes Upon completion of the case study discussion, successful students will be able to define and list the steps of time-driven activity-based costing system (TDABC); understand and explain the ideas behind the TDABC; implement the TDABC in customer profitability analysis; draw connections among the cost and profitability analysis; evaluate the importance of better costing techniques in profitability analysis; and make managerial decisions based on TDABC analysis. Case overview/synopsis Gluten Limited’s financial affairs and operations manager, Fatih, was aware that the company was making very little profit from its operations with its biggest customer. The main reason appeared to be that it delivered its products in bulk to the main warehouses of the customer, which then distributed them to the stores. Fatih believed that products were being sent to stores late, so that their expiration dates passed quickly and they ended up being returned. The case study documents the past year of Gluten Limited’s delivery operations with one of its biggest customers. It focuses on the effectiveness of its delivery operations and ways to increase profitability by reducing sales returns. The case dilemma involves the choices that Fatih faced following a six-month trial period: either delivering products in bulk to the customer’s main warehouses at lower cost but higher return rates or delivering small amounts directly to stores at higher cost but lower return rates. Fatih needed to decide which mode of customer operations was more profitable and continue that way. Knowing the importance of determining costs properly in profitability analysis, Fatih made the cost calculations using the TDABC system. Complexity academic level This case was written for use in Cost Accounting and Managerial Accounting classes at the undergraduate level. The focus of the case aligns well with discussions of customer profitability analysis, cost reductions, eliminating non-value-added activities, and profitability of operations. Instructors seeking to emphasize the most suitable costing methods for customer profitability analysis could assign this case. Supplementary material Teaching notes are available for educators only. Subject code CSS 7: Management Science

Azure Lodging, Inc.: A Case Study on Capital Budgeting with Capital Rationing in a Service Industry Context

ABSTRACT This case illustrates capital budgeting in a service industry context. Three features should make this case attractive to instructors. First, the firm's rationing of capital means that students must select one investment among competing investment alternatives. Second, the project involves renovation of an existing hotel. Most cases analyze a business expansion by estimating the net present value of a single series of cash flows (i.e., either future cash flows occur or do not occur). In this case, students model cash flows if the project is accepted, comparing those cash flows to a model of cash flows if the hotel continues without renovation. Third, we introduce Monte Carlo analysis, which is an advanced technique for assessing uncertainty. The extensive data students use in this case are from an actual hotel chain's project database. The case has been used in undergraduate and graduate managerial accounting classes. Data Availability: Available as downloadable supplemental material files.

Partnering Accounting and Excel

We incorporated the Microsoft Office Specialist (MOS) Excel 2016 Certification Exam into our introductory managerial accounting class at Cleveland State University. The purpose was to increase student engagement, to show how Excel is used in day-to-day business applications, to stress the importance of technology skills in real life business environments, and to improve the relevance of this introductory accounting course for all business majors. This paper describes our experimental study which utilized the Certiport examination process, materials developed and provided to students to assist them to prepare for and be successful on the exam, and the results and feedback that we received from our students. Our analysis allowed us to evaluate our initial course work requirements and plan for an improved syllabus for the Fall of 2021. Even though we were hindered by COVID-19 restrictions, we were able to gather valuable data to share with our University.

Activity‐Based Costing in a Challenging Business Environment: An Instructional Case

ABSTRACTThis cross‐disciplinary case study uses the concept of the Production Sharing Agreement (PSA) in the upstream petroleum industry to demonstrate the application of activity‐based costing in a challenging international business environment. The case is designed and implemented to encourage students to critically address and solve legal, operational, and accounting challenges from a global perspective. This case is intended to be an appropriate hands‐on, experiential tool for undergraduate degree‐level managerial accounting classes. The learning objectives of this case include (i) to develop an understanding of the PSAs and identify their potential related challenges; (ii) to apply activity‐based costing using a multiple‐step approach in a unique, international, realistic, and challenging environment; and (iii) to identify the gaps between the current case activity‐based costing application and IFRS.

새로운 교수법, 플립드 러닝의 관리회계 수업에의 적용 사례

새로운 교수법, 플립드 러닝의 관리회계 수업에의 적용 사례

Innovative New Apps and Uses for the Accounting Classroom

ABSTRACT New instructional technologies provide educators with opportunities for student engagement and collaboration. As technology evolves, educators will spend more time identifying and testing new platforms. This instructional resource paper reviews several recent innovative technologies by providing brief descriptions, pricing, and current and potential uses. More specifically, this paper examines Doceri and DisplayNote in detail. My results from analyzing exam scores and course grades identified that the use of Doceri improves overall course performance in an introductory managerial accounting class. Poll Everywhere is an audience response system using mobile phones, Twitter, and the web in place of clickers. Student surveys suggest that the use of the Poll Everywhere app encourages questions and class discussions. Students perceived they participated more, and the class provided more illustrative examples with the utilization of the Poll Everywhere app. Top Hat is a cloud-based classroom and student response system used to increase student engagement during lectures using cell phones, tablets, or other devices. Finally, nClass and Asana are new tools to consider for classroom adoption and future research.

THE IMPACT OF FREQUENT CUMULATIVE TESTING ON THE ACADEMIC PERFORMANCE OF UNDERGRADUATE STUDENTS IN MANAGERIAL ACCOUNTING

ABSTRACT This research study was made to determine possible effects on student performance of using frequent cumulative testing in undergraduate sections of managerial accounting. Prior research studies suggest possible gains in student performance may be achieved when the tests are designed with high test item overlap. With this design in mind, a six cumulative testing process was implemented in undergraduate managerial accounting classes during the fall of 2014 and the spring of 2015. These testing results were compared to a three cumulative testing process made during the spring of 2013, fall of 2013, and the spring of 2014. The study results indicate that the students who were assessed with six cumulative tests significantly outperformed those students who were assessed with three cumulative tests. The study results may provide guidelines for the design of classroom testing in undergraduate business courses. Keywords test frequency, learning assessment, student learning outcomes, frequent testing effect

Cost Flow Diagrams as an Alternative Method of External Problem Representation - A Diagrammatic Approach to Teaching Cost Accounting and Evidence of Its Effectiveness

Undergraduate accounting students can have a difficult time conceptualizing manufacturing processes, the associated physical inventory flows, and the accompanying accounting cost flows. Traditional methods of teaching this material within managerial and cost accounting classes heavily stress the transactional and reporting requirements. Such approaches can leave students unclear as to the underlying nature and inter-relatedness of the issues and processes involved. This paper introduces and provides statistical evidence regarding a new visually-based diagrammatic approach that utilizes cost flow diagrams as an alternative method of external problem representation. As concrete examples of the technique, the paper includes diagrammatic solutions to three different traditional cost accounting problems. We hypothesize that the use of diagrams aids students in developing an innate understanding of inventory and cost flows across multiple cost accounting topics. Our approach is consistent with previous findings in the cognitive science literature that the use of diagrams allows students to process relationships and complex data in chunks, thereby processing more effectively. To study the effectiveness of a diagrammatic approach in teaching cost accounting, historical student final exam assessment data, segmented by course learning objectives, was collected and analyzed. The paper presents statistical and graphical evidence that indicates a significant improvement in student performance when a diagrammatic approach is utilized. Possibilities for generalization of visually-based diagrammatic techniques to other areas of accounting pedagogy are discussed and presented for consideration.

Condominium Townhouse Investment

AbstractThis accounting case involves the evaluation of various alternatives based on a real‐life personal property investment. The Condominium Townhouse Investment (CTI) case uses introductory management accounting concepts and analyses to introduce students to the case method of learning. The main concepts reinforced are relevant costs and revenues, including differentiating between opportunity and sunk costs. Students are not only asked to define and identify these items, but to consider choices centered on the decision alternatives in their role as accountants in public practice. This case is especially valuable because it offers students the chance to become engaged in an analysis and decision‐making situation that they can relate to both personally and professionally because, one day, they themselves are likely to become involved in a home ownership decision. The case focuses on real estate as a personal business investment, and requires both qualitative and quantitative analysis, with more emphasis on the qualitative aspect. In addition, the teaching notes include methods and strategies for students to use in an introductory managerial accounting class or level‐1 MBA class.

The Implementation of ABC and TDABC at Leman LLC: A Quantitative Case for Managerial Accounting Course

The Leman LLC case was designed to be used in a managerial accounting class with limited exposure to ABC and TDABC systems. It introduces students to ABC and TDABC through a numerical exercise and provides the opportunity to study and analyze the details of the implementation of these cost accounting systems in a paint-producing company – Leman LLC with business processes performed by employees from different departments. The case contains enough variety and complexity in order to provide a clear picture on how the production of two similar products (regular paint and special paint) can make very different demands on the resources of a company. It illustrates the mechanics of ABC and TDABC together with respective product profitability analysis. The Leman LLC case permits a rich discussion of the rationale for introducing ABC and TDABC, the advantages and disadvantages of these management accounting instruments relative to traditional costing and to each other, important technical issues in the implementation of these instruments (e.g., resource allocation among cross-functional activities, the construction of time equations, estimates of unit times, treatment of capacity, etc.), as well as the role of a cost management accounting system for generating relevant information for decision making. The case provides one set of data for both ABC and TDABC models, facilitating the comparison of the mechanics of these methods. Overall, the Leman LLC case is designed to help students develop the required skills in the application of ABC and TDABC within a limited period. It is suitable for both graduate (MBA) and undergraduate students.

Andrew Ford, D.D.S.: A Sole-practitioner Professional Practice Case

As the U.S. economy continues to shift from manufacturing to service-oriented jobs, students will benefit from exposure to realistic scenarios that service providers may experience. Andrew Ford, D.D.S. is based on a real-life situation facing many single-practitioner professional dental and medical practices. Many professional health care providers have little business experience or training and instead rely on bankers, accountants, and bookkeepers to record accounting entries and provide sound business advice. In this case, students assume the role of a friend/consultant called upon to help determine why the dental practice is not performing at the same level as similar practices. Students encounter a situation in which an overworked medical professional supposes that an employee might be embezzling money or there is some other problem the professional cannot identify, thereby causing low profitability. In this role, the student finds that the professionals accounting records are sparse, making it difficult to precisely evaluate the operation of the practice. The student is asked to analyze the provided information and make suggestions for improving the profitability of the practice. The case also provides students exposure to basic regression analysis a consultant might use to assess cost behavior. This learning case is appropriate for both undergraduate and graduate managerial accounting classes.

Teaching Special Decisions In A Lean Accounting Environment

Lean accounting has become increasingly important as more and more companies adopt the lean enterprise model or some variation of it. Cost and managerial accounting textbooks continue to use, almost exclusively, models based on standard overhead absorption, which if used in a lean environment will not accurately reflect the benefits from the movement to a lean enterprise and may distort the impact of the changes. Because of these developments, accounting students should be exposed to lean accounting models beyond a brief introduction in their basic cost and management accounting courses. This paper presents a model for teaching decision making in a lean company which uses value stream costing for such decisions as special orders and make-or-buy decisions. The use of these models in cost and managerial accounting classes will be of benefit to the future cost/managerial accountants.

Cooperative Learning At A Distance: An Experiment With Wikis

The merits of incorporating group work into learning environments are well established. Online classes and other distance learning settings, however, can make it challenging to introduce traditional group projects. Wikis use technology to facilitate group work in distance learning settings. Wikis allow individuals in different locations to asynchronously post and edit content on a website to iteratively and cooperatively work toward a solution. We describe wikis and their use in an online MBA managerial accounting class. Student feedback on their experiences using wikis as well as instructor observations were mostly positive while negative comments were primarily administrative in nature and easily addressed. In general wikis can be implemented in any business course using group assignments. When using wikis for cooperative learning, the obstacles are minimal, but the potential benefits for students may be substantial. These benefits include developing a sense of community, participating in peer-to-peer learning and using critical thinking and communication skills while still enjoying the convenience of working asynchronously in disparate locations.

Constrained Optimization Problems In Cost And Managerial Accounting Spreadsheet Tools

A common problem addressed in Managerial and Cost Accounting classes is that of selecting an optimal production mix given scarce resources. That is, if a firm produces a number of different products, and is faced with scarce resources (e.g., limitations on labor, materials, or machine time), what combination of products yields the greatest profit to the firm? Solver, an optimization package included within Microsoft Excel (or Optimizer in Quattro Pro), is an ideal vehicle by which to analyze these problems. In most cost or managerial accounting texts, students are asked to address this type of question when there is only one scarce resource (e.g., Material X); such problems can be readily solved by hand. In the case of two or more scarce resources, students are usually referred to their management science classes and Linear Programming packages such as LINDO for further enlightenment, with the comment that such matters are beyond the scope of an accounting text. The purpose of this paper is to illustrate how the Solver package in Microsoft Excel can be easily used to solve optimization problems in management accounting. Although not as powerful or flexible as stand-alone packages such as LINDO, Solvers presence within a universally available spreadsheet package makes it an extraordinarily powerful teaching tool. Instead of parameters being entered into the optimization problem as constants, they can be expressed as functions of other spreadsheet cells. This interactive structure allows an instructor (or student) to create complex production environments where it can be illustrated how minor changes in one aspect of the production environment can flow through and have a profound impact on optimal production schedules.

The impact of group formation in a cooperative learning environment

Research indicates that cooperative learning (CL) has the potential to increase accounting student satisfaction without impairing the learning of technical material (Lancaster, K., & Strand, C. (2001). Using the team-learning model in a managerial accounting class: An experiment in cooperative learning. Issues in Accounting Education, 16(4), 549–567). This study investigates whether instructor-formed heterogeneous groups produce a more effective CL environment than student self-selected groups by measuring individual academic performance and perceptions. Results indicate the presence of a treatment interaction, implying that the best group composition may not be the same for all students. In some circumstances, higher ability students had statistically higher performance in more homogeneous groups. Lower ability students did better (not significant) in heterogeneous groupings. The majority of students gave high ratings to the impact of CL on learning and development of team skills. Students were only mildly interested in increasing the time spent in groups, indicating that they value both traditional teaching methods and CL.

How Does Residual Income Affect Investment? The Role of Prior Performance Measures

This paper examines whether “you get what you pay for” in firms that implement residual income (RI)–based compensation. Specifically, this paper explores differences in investment patterns of firms that implement RI-based compensation plans conditional on whether the firms switched from earnings or return on investment (ROI)–based compensation. I find that the pattern of investment for firms switching to RI from earnings-based compensation is opposite to that of firms switching from ROI-based compensation. Changes in investment within each individual subgroup yield weaker, mixed results. In addition, this paper documents that delivered RI increases in firms that implement RI. My paper contributes to the literature on the investment effects of RI by examining the relevance of a set of arguments that have been made in management accounting textbooks since 1965. These arguments are still found in current textbooks and are commonly taught to students in graduate level managerial accounting classes. The arguments help us to examine a natural experiment in which we can better specify the conditions under which RI use is expected to be associated with changes in investment.

The teaching of transfer pricing: Theory and examples

This paper presents a unified framework for teaching transfer pricing at the advanced undergraduate or Masters levels. The approach is based on the economic transfer pricing model of Hirshleifer [Hirshleifer, J. (1956). On the economics of transfer pricing. Journal of Business, 29 (July), 172–184; Hirshleifer, J. (1957). On the economics of the divisionalized firm. Journal of Business, 29 (April), 96–108] but uses a series of numerical examples to “flesh out” the principles arising from the purely diagrammatic approach taken by Hirshleifer. We also develop numerical examples that illustrate the effects that removing the frictionless markets assumptions (that underscore the Hirshleifer approach) can have on optimal transfer pricing rules. The focus here is on the lack of goal congruence introduced by agency considerations and the role of accounting procedures in alleviating these agency issues. The teaching materials embodied in this article were developed “at the coalface” and have been successfully used by the authors in advanced undergraduate managerial accounting classes.

Determinants Of Students Performance In Intermediate Accounting

The purpose of this study is to investigate factors that may influence student performance in the first intermediate accounting class. Regression analysis is used to examine the significance of four independent variables: cumulative grade point average prior to enrolling in intermediate accounting, grade in the introductory financial accounting class, grade in the introductory managerial accounting class, and score on a diagnostic assessment used to measure general financial accounting knowledge. Based on the results, several recommendations are offered to improve student performance.

The effects of group quizzes on performance and motivation to learn: Two experiments in cooperative learning

Abstract This study investigated the effect of group quizzes on accounting students’ performance and motivation to learn. While cooperative learning in accounting education has been studied in recent years, the effects on student performance have been mixed [Lancaster, K.A.S., Strand, C.A., 1999. Using the team-learning model in a managerial accounting class: an experiment in cooperative learning. Issues in Accounting Education 16(4), 549–568; Ravenscroft, S., Buckless, F., Hassall, T., 1999. Cooperative learning – A literature guide. Accounting Education 8(2) (1999) 163–176]. Thus, two experiments were conducted (one using an experimental design and the other using a quasi-experimental design) that examined student performance and motivation to learn. The first experiment used a quasi-experimental design to compare the performance and motivation to learn of students who took a series of group quizzes versus students in comparable classes in a prior semester that did not take group quizzes. Using a series of group quizzes in a mixed factorial design, the second experiment examined the performance of both: (1) long-term groups versus ad hoc groups and (2) self-selected groups versus instructor assigned groups. Findings revealed no performance differences across conditions in either the first or second experiments. However, student subjects in the first experiment (using group quizzes) reported a significantly greater motivation to learn and perception of learning than those in the second experiment (not using group quizzes).