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Journal of Accounting Education

Teaching and Educational Notes


Vol. 4, No. 2
Fall 1986

ENERGIZE YOUR ACCOUNTING CLASS


WITH A SIMULATION THATS FUN FOR STUDENTS

Thomas N. Tyson
CLARKSON UNIVERSITY

Abstract: One way for students to become more actively involved in their classes is for educators
to design instruction that requires student participation. Frequently, at the university level,
participative learning exercises are viewed either as inappropriate or unmanageable. The job-cost
simulation outlined in this article can be performed in a 50-minute class period. Students work in
teams to perform a real task and cost the output of their efforts. The exercise raises a number of
provocative issues regarding standard costingand quality control, and, perhaps best of all, occurs
in a spirited, enlivened class session.

ACCOUNTING IS B-O-R-I-N-G

I hear many of my introductory level students saying this, and whats worse,
1 can read it in their faces nearly every day. Understandably so, perhaps,
because the reputation of accounting definitely precedes it into the classroom.
Students have grown accustomed to the media portrait of the accountant as a
bespeckled, disheveled, almost machine-like person who enjoys spending
weekends balancing heavy ledger books and who never takes vacations
because of innumerable unfinished tax returns. Lately, the rumor is spreading
that the accountant will shortly be replaced by the computer (computers dont
take vacations either). The result of this media perversion is that most students
enter introductory level accounting courses expecting to learn little of impor-
tance or relevance.
How do accounting educators overcome these unfortunate prejudices and
misconceptions? One way is to adopt a pro-active approach in communicating
the body of accounting knowledge. That is, wherever possible educators
should disseminate information by requiring active, participative learning
rather than passive, reactive notetaking. This approach can be much more
frequently implemented in disciplines less encumbered by the forced struc-
tures of codes, rules, standards and procedures. However, there are certain
portions of the accounting principles sequence, especially the managerial
component, that lend themselves to participative learning approaches. One
subject that I energize with student participation is job order costing. The
balance of this paper describes a 50-minute exercise in which students expe-
rience job order accounting.
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SIMULATION

The exercise requires students to perform the key tasks associated with job
costing: doing the job, requisitioning and issuing materials from an inventory
center, and accounting for the costs of the job. The jobrequires students to
requisition pieces of colored paper (available only in 3 x 5 card size), then cut
and glue them into a specific quilt pattern (see Exhibit 1 and 2 for examples).
All but three or four students are assigned to teams of two or three, with two
per team and a maximum of eight teams found to be optimal. Each team is
given a pair of scissors, a glue stick, a ruler, and a packet of information which
includes job instructions, specific quilt pattern, materials requisition form (see
Exhibit 3), and time ticket (see Exhibit 4).
Members of each team are instructed to record their start and stop time and
the color and quantity of 3 x 5 cards required to complete the job. The
necessity for accuracy and inclusion of required identification numbers on all
documents is emphasized. Those students not assigned to teams are divided
between the roles of inventory and cost accounting clerks. Inventory clerks
issue colored cards and maintain the perpetual inventory records (see Exhibit
5). Students are instructed to fill only properly prepared requisitions and to
complete the costing portion ($50 per card, for example). All requisitions are
kept by inventory clerks and forwarded to cost accounting. Inventory clerks
assist cost accounting by completing the cost portion of time tickets ($.20 per
minute per person, for example) and forwarding them to cost accounting once
a team has finished its job. Cost accounting accumulates product costs on
individual job cost sheets (see Exhibit 6) and assigns overhead on a direct
labor minute basis ($.30 per minute, for example). Instructions take 10
minutes, jobs require 12 to 18 minutes (including inventory activity), and
accounting an additional 10 to 12 minutes. This leaves approximately 10 to 20
minutes for discussion, which can also be continued in a later session.

DISCUSSION

On completion of the job, the quilt patterns are collected and taped to a
front blackboard. After cost accounting has finished, a cost summary with
total minutes is chalked below the appropriate finished pattern. Depending on
class size, two or three teams may work on the same pattern and thus incur
different costs and times for the same job. Throughout the exercise, there is a
great deal of activity and communication. A spirit of competition also per-
vades with many students striving to be among the first to finish.
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CONCLUSION

A number of discussion points naturally develop from this simulation:

1. Lack of quality control, evidenced by the disparity of finished quilt


patterns.
2. Material waste variances, indicated by amount of paper scrap; how to
control waste is discussed.
3. Inability to objectively evaluate performance because of an absence of
time and usage standards.
4. The great quantity of paperwork associated with job costing.
5. The ability to sabotage the system by recording incorrect times and
identifying numbers.
6. The benefits of cost information (pricing, inventory valuation) are
weighed against the costs of operating the system.

I have used the exercise successfully not only in introductory level classes,
but also in cost accounting and accounting information systems classes. In
these higher level classes, I stress the control responsibility of accountants.
Students have expressed enthusiasm for the exercise and, perhaps for the first
time, experience the role of the accountant in the wider scheme of things.
The exercise sets up later chapters that deal with standard costing and respon-
sibility accounting and is continually referenced regarding the advantages and
drawbacks of cost systems. I strongly recommend its use for those that want to
enliven a class session and are stimulated by students who actively participate
in their learning.
120

6
Exhibit 1

PATTERN
Color Key:
B= Blue Team No.
0= Orange Job No.
Y= Yellow

Exhibit 2 6
121

MATERIALS REQUISITION

Req. No. Date ____


Job No.
OFFICF USF ONI Y
Description Qty. Size Unit Cost Tot. Cost

Exhibit 3

TIME TICKET

Date
Ticket No. Start Time
Job No. Stop Time

Team
Names: Total Time
X Labor Rate
Total Cost

Exhibit 4
122

PERPETUAL INVENTORY RECORD

Description Size

Req. Purchases Issues Balance


Date
no. 1 Qty.iCost Qty. Cost my. cost
_e__-
k--i--j

Exhibit 5

JOB COST SHEET

Direct Materials Direct Labor ~/F. Overhead


/
Date Req. No. Amount Date Ticket Man 1 Amount

I
y--e+-
I
1 I
Overhead Rate_

COST SUMMARY
Direct Materials _~ _____
Direct Labor
Factory Overhead
TOTAL COST

Exhibit 6

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