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This learn book is written for students who at some point in their careers will be managers in a field that interests them. All managers must understand the key operations of the business, be familiar with the financial data available and make decisions that add value to the company. This can not be done successfully without understanding the cost structure of the company. Most students have no trouble calculating the common formulas discussed in a managerial accounting class. It is much more challenging to apply analysis to good decision making. Decision making that adds value to a company is impossible to practice and understand unless it is approached from a total business context.
All homework in this learn book is done using complete comprehensive cases that provide source data that is available to a managerial accountant. Students work as the managerial accountant and provide the information and analysis management would use to make decisions. Each case is simple enough that students can understand the entire business and complex enough to apply the concepts learned in a managerial accounting class. Students apply concepts as they actually do the job of the managerial accountant and make decisions as an owner.
The comprehensive homework cases are designed to show the "real world" application of common concepts taught in every managerial accounting class. Each concept correlates with a task. Each task provides an explanation of the common terms and formulas used to do analysis to support decision making. After completing each task the student answers questions to explain the analysis and impact on operating profits to management. Tasks 1, 2, and 3 must be completed first because they will be used in all other tasks. The classified general ledger and the cost sheet are source data for other tasks. Tasks 3 through 6 involve planning and analysis directed towards increasing profits. Tasks 7 through 9 are related to accounting, reporting, and analysis of the cost to manufacture a product or provide a service. Tasks 10 and 11 relate to the income statement and evaluating performance. Task 12 requires the student to prepare the budget for the first quarter of next year. This learn book does not include extensive examples in the text. The comprehensive homework case in Appendix C serves as an interrelated example of the application of all concepts and analysis. Students should refer to this example as they read about each task. The instructor will use the first comprehensive homework case as an integral part of each class lecture, providing another comprehensive example for the students to learn from.
Students use a general ledger, a cost sheet they prepare, and inventory reports as data sources. Students learn which data must be used for different analysis (very important), determine what decision the analysis supports, and assist the owner with making good business decisions. As students do the work of the managerial accountant they understand how original source data becomes information that integrates to form the total financial picture of the operations of the company.
The cases have been classroom tested. Using comprehensive cases in the classroom increases students' general understanding of how a business operates and how accounting analysis is used to make operating decisions that lead to increased profits. The students make decisions related to a company they can understand and this significantly improves retention of concepts.
When the course is completed, the student will have four comprehensive examples of how managerial accounting is used to make effective business decisions and they will have made decisions for 3 different types of companies.
Janice Cobb has taught managerial accounting for 20 years. She is currently teaching at Texas Christian University where she has received various teaching awards in the past 10 years. She received the Texas Society of Certified Public Accountants Outstanding Educator award in 2007 for her excellence and creativity in the classroom. She teaches with a focus on application and puts the students in real world situations and requires them to do the actual work they would do on the job.
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