This is a free online book consisting of six managerial and cost problems with worksheets and answers in a pdf format. The focus of the problems is cost determination and inventory valuation as follows:
Problem 1 - evaluate costs to determine the amount of direct materials, direct labor, factory overhead, selling and administrative, prime and conversion costs.
Problem 2 - calculate sales based on a number of cost variables.
Problem 3 - Prepare a statement of cost of goods manufactured as well as the increase/decrease in finished goods inventory based on cost of goods sold for the month.
Problem 4 - Determine the ending inventory for raw materials, work in proccess and finished good inventory accounts as well as the cost of goods sold, selling and administrative expenses, and depreciation charged against income for the period.
Problem 5 - prepare a units reconciliation for raw materials, work in process, and finished goods, and determine the cost of goods manufactured, cost of goods sold, and net income.
Problem 6 - prepare a schedule of cost of goods manufactured and cost of goods sold as well as an income statement.
Type of Material:
drill and practice
Assign as homework or practice in class.
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Identify Major Learning Goals:
To provide the opportunity to apply managerial and cost concepts and procedures, including:
identification of product costs.
an understanding of cost flows and account balances.
preparation of a Cost of Goods Manufactured Schedule and Income Statement.
Target Student Population:
College students enrolled in an introductory management accounting course.
Prerequisite Knowledge or Skills:
Basic understanding of accounting concepts including the nature of inventory, cost of goods sold and various manufacturing expense accounts.
Evaluation and Observation
This series of six problems demonstrates a core concept grounded in the cost/managerial discipline. The problems are both current and relevant and provide mostly accurate information. Each problem is clearly and concisely presented. The entire series is flexible and summarizes concepts well. The problems have a nice progression from the easier concepts through more difficult calculations.
Although the six problems would be useful in practicing important managerial/cost concepts, a lecture or textbook reading would be needed to provide a complete demonstration of the concepts; therefore, the module is not self-contained, nor does it provide an adequate amount of material.
Errors exist in the first two problems. In problem 1, one item is classified as factory overhead when it could be a direct material. In problem 2, an error exists in calculating total manufacturing cost which then results in the following errors: total cost entering production, cost of goods sold, and total sales.
Potential Effectiveness as a Teaching Tool
The module would be easy to assign as homework or use in class to apply concepts discussed in lectures. Once the students have the concept and procedures explained, this module could provide practice through the completion of the worksheets. With the exceptions noted under quality of content, the problems are of good quality in that they require several detailed calculations.
No introduction to the topic has been provided including objectives and prerequisite knowledge. As a result, the core concepts and procedures are not demonstrated. Students could easily look at the answers without committing time to the module. The instructor would have to hide the solutions unless the problems are assigned for self-help.
Ease of Use for Both Students and Faculty
The module would be easy to use and has clear instructions. The 23 page Adobe file does provide worksheets with minimal formatting to assist users in solving the problems. The problems are progressive, beggining with a classification problem and progressing to more complex computations including preparation of schedules and the income statement.
The module is not interactive and is not very visually appealing or engaging. It is basically black text on a white background. Problems are interspesed with advertisements.