James Bulloch Award for Innovations in Management Accounting Education

Steve Adams, Richard Lea and Lee Pryor from California State University, Chico and Mary Harston from St. Mary’s University in San Antonio received the 1997 AAA/IMA James Bulloch Award at the American Accounting Association meeting in Dallas. The group’s innovation is the development of a serial or continuing case that is the basis for a one semester course in management accounting. At the beginning of the case, a fictitious firm, the California Car Company (CCC), is a small assembler of electric vehicles. CCC has two products, a sedan and a compact, and has a factory that is organized departmentally. It employs a traditional cost accounting system and makes pricing, product mix and performance evaluation decisions in a traditional manner. Students assemble cars using toy blocks in order to better understand traditional accounting and production concepts. Using the cost accounting system, students discover that CCC’s return on equity in below the industry average, and that the primary cause is high manufacturing overhead.

The students then perform an activity-based costing (ABC) analysis and identify poor quality and high setup costs to be the primary drivers of the high manufacturing overhead. Based on the ABC information, CCC implements continuous improvement and lean production programs in its factory. Students once again assemble cars so they can see the accounting and production changes that have occurred. Students then prepare a budget for the coming year that incorporates non-financial measures. At the end of the year, performance is evaluated using a balanced scorecard approach, and standards are negotiated for the following year. The case concludes with CCC opening a foreign sales subsidiary, which introduces the accounting and management issues arising in a multinational firm.

The case employs discovery and active learning pedagogy whereby students need to employ concepts learned in previous case assignments and in reading material to address relatively unstructured decision situations. A number of group activities are built into the case, including the simulations and structured controversies. The case, including solutions, is available by contacting SouthWestern College Publishing. A web site for the case materials is:

http://www.csuchico.edu/acms/sadams

Feel free to email me at: sjadams@csuchico.edu, or write to Steve Adams, Dept. of Accounting and MIS, California State University, Chico CA 95929-0011.

Click here to go to a full paper describing the serial case.