Master Budget Case: CamDrone Teaching Notes Assigning to Students: As an Introductory Managerial Accounting (or Cost Accounting) Project The June2019 “CamDrone” version of the Master Budget Case as provided would generally be suitable as an assignment for an introductory managerial accounting (or cost accounting) course. It would be appropriate to assign either as an individual or team project. Intent would be that students be provided only the case narrative as a .pdf file. Intent for an introductory managerial accounting (or cost accounting) course would be to have students prepare and submit a solution in .xlsx only. As an introductory managerial accounting (or Cost Accounting) project, it is recommended that Instructors encourage / require students to: 1. Prepare a DATA worksheet within Excel (.xlsx) to be used as basis for the budget model. 2. Populate the DATA worksheet using information provided in the case narrative o As indicated above, it is recommended that students be provided the case narrative as a .pdf file. Students would then manually input data from the case narrative into their DATA worksheet. This forces students to familiarize themselves more readily not only with detail of the data, but also with creating and populating an Excel file as a data tool. 3. Prepare a separate worksheet for each schedule and for each financial statement. 4. Maintain all worksheets within a single Excel (.xlsx) file. o To mitigate against potential academic misconduct, as well as to facilitate practicality of grading, students should be discouraged / expressly prohibited from creating links to separate files (.xlsx or otherwise). Instructors should audit file properties to identify whether students have created links in their submission file. 5. Populate each schedule and financial statement using cell referencing [to preceding worksheets within the same .xlsx file (e.g. DATA worksheet) and/or to preceding cells within the same worksheet]. Where calculations are required, the students’ budget model should demonstrate appropriate use of cell formulas. o As a best practice, NO data entry should occur within any worksheet except for the DATA worksheet. o As a best practice, NO calculations should occur within the DATA worksheet, but rather should occur in subsequently appropriate worksheets. 6. Clearly name each worksheet, not only by use of appropriate heading, but also by relabelling each respective worksheet tab. McGraw-Hill Ltd. © 2020 Master Budget Case: Teaching Notes
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o Students may also colour-code worksheet tabs to elevate the visual quality of their submission. 7. Properly format schedules and financial statements, including setting Page Layout such that the Print Preview would display each schedule or financial statement legibly on a single page (generally landscape unless portrait is visually more appropriate, depending on the nature of each worksheet). Assigning to Students: As an Intermediate / Advanced Managerial Accounting (or Cost Accounting) Project In the spirit of appreciating that the fundamental purpose of managerial accounting (or cost accounting) is to provide useful information for management to make better informed decisions, the Master Budget Case could reasonably be expanded for an intermediate managerial accounting (or cost accounting) course. To expand this project to an intermediate level, in addition to completing Steps 1-7 (detailed above) it is recommended that Instructors encourage / require students to: 8. Challenge assumptions and/or data provided in the case narrative, adjusting the DATA worksheet accordingly. o Adjustments to the DATA worksheet should naturally impact subsequent schedules and financial statements accordingly. 9. Prepare sensitivity analysis. o Sensitivity analysis would generally require students to expand the complexity of their budget model to reflect scenarios (e.g. i) pessimistic / worst case, ii) base / target, and iii) optimistic / best case). 10. Provide innovative recommendations / suggestions / solutions to support sustainable success for the organization. o Stronger students would recognize and address the fact that, while quantitative data / results are important considerations, qualitative factors may support alternate recommendations / suggestions / solutions not necessarily derived from or driven by quantitative results. o E.g. Students may be inclined to recommend use of lower cost materials and/or hiring lower cost labour with the intent of saving money for the organization. It would be important for students to recognize that cost cutting measures to achieve higher short-term profits may have negative longer-term consequences. Cost-cutting measures may compromise product quality, with potentially detrimental impact on external failure costs (e.g. warranty costs, product recalls, lawsuits, damage to reputation and market share, etc.) Rather than cost-cutting, a more innovative solution may be for the organization to focus on positioning itself as a niche market
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provider, tailoring its product(s) and raising selling prices accordingly rather than using lower cost materials. o Particularly for an intermediate / advanced level course, expectation would be that students demonstrate appropriate research to support viability of proposed recommendations. o E.g. Budgets proposing raising the selling price of the product may not be viable, as higher selling price may challenge the organization’s ability to remain competitive in the market. Moreover, higher selling price may ultimately be offset by lower sales volumes (units), potentially resulting in overall reduction (as opposed to intended increase) in total sales. Students would be expected demonstrate relevant market research to support any recommendations for increased selling prices. If Steps 8-10 (detailed above) are applied to expand this project to an intermediate / advanced level, intent would be to have student prepare and submit not only Excel (.xlsx) quantitative file (adjusted for any assumptions and/or data challenged by students) but also corresponding qualitative report (in either Word (.docx) or .pdf) to explain student logic regarding Steps 8-10 (detailed above). Ideally, such report should be addressed to the organization as a “client”. Grading of submissions for an intermediate / advanced level course would ideally consider:
Content and format of quantitative budget model (.xlsx) Content and format of qualitative report (.docx or .pdf) Reasonableness of quantitative and qualitative analyses Integration of quantitative and qualitative analyses Innovativeness of recommendations / suggestions / solutions Viability of recommendations / suggestions / solutions Reasonableness of referencing to appropriate sources of relevant research to support recommendations / suggestions / solutions Appropriateness of the tone used by students for the report (i.e. To what extent have students demonstrated understanding of their role as a trusted advisor to the organization?)
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