Variable costing in Cost Accounting

iLesson Plan for Applied Learning

Unit or Module in Course: Variable costing in Cost Accounting

 

Learning Objective: Through active experimentation with variable costing income statements and capital expenditure projects, the student will be able to make managerial decisions as to ask or reject a proposed capital expenditure.

 

Active Experimentation Learning Activities: A case study created which requires students to look at variable costing income statements with current and proposed output levels. Introduction of the sales department forecasts and consideration of plant expansion project.

1. The students will conduct an analytical review of the data provided.

2. The students will determine the current and proposed output levels based on sales data andforecasts.

3. The students will prepare a variable costing income statement

4. Once the quantitative portion of the case is completed, each group will be given a different scenario concerning the plant expansion. The information will require them to consider the validity of estimates and justification for their solution.

 

Conditions:

• Group work: Teams for four will be set up for this project • Timeframe: one class period to complete the case work and one class period for discussion

based on a 50 minute class period. • Groups cannot discuss between each other the results. • Location: Both portions can be done in class or part can be assigned.

Procedures:

1. The students will conduct an analytical review of the data provided.

2. The students will determine the current and proposed output levels based on sales data and forecasts.

3. The students will prepare a variable costing income statement

4. Once the quantitative portion of the case is completed, each group will be given a different scenario concerning the plant expansion. The information will require them to consider the validity of estimates and justification for their solution.

5. Each group will present their results and we will discuss how estimates and the origin of the estimates can create different results to the managerial decision made.

 

 

Assessment:

• Case study quantitative portion: This portion will be graded for each group before the presentation and will compose 35% of the grade on this activity.

• Case study qualitative portion: This portion will be graded for each group before the presentation and will compose 35% of the grade on this activity.

• Presentation and final judgement call analysis: Graded as their presentation grade for 30% of the grade on this activity.

• Feedback: o Detailed feedback on analytical results o Detailed feedback on management decision making process o Detailed feedback on presentation skills