USING A SIMULATION PACKAGE TO DEVELOP A SIMULATION EXERCISE IN COST ACCOUNTING Development In Business Simulation & Experiential Exercises, Volume 18, 1991 134 USING A SIMULATION PACKAGE TO DEVELOP A SIMULATION EXERCISE IN COST ACCOUNTING James E. Groff, The University of Texas at San Antonio Thomas E. Reeves, The University of Texas at San Antonio ABSTRACT A cost accounting exercise is developed using a simulation package called SIMFACTORY. Students develop cost accounting reports using an animated simulation. This exercise is used to give students a more realistic understanding of cost flows in a factory. INTRODUCTION In this project we develop a simulation exercise in cost accounting using SIMFACTORY. Our objective is to show how animated simulations can be used as supplements to a cost accounting course which incorporates both traditional cost accounting approaches like job order and process costing and more advanced topics such as operations costing and costing in continuous flow manufacturing environments such as Just-In-Time (JIT). The experience itself is a microcomputer based simulation exercise. It is designed to provide cost accounting students with a more realistic sense of the flow of events in a manufacturing environment and how cost accounting techniques interface with and capture data about those events. In addition, the experience allows students to gain experience with several different microcomputer tools including a highly sophisticated simulation program, a small stand-alone data entry package and a spreadsheet program. GENERAL APPROACH In this project “factories” are developed using a sophisticated animated simulation package called SIMFACTORY. Each “factory” is a animated schematic picture of a plant floor which incorporates a particular approach to manufacturing. Students do not create the “factories” but use ones previously developed by the instructor. A student begins an exercise by running a “factory.” Because the simulation is animated, the student watches as products move into and out of inventories and through processes and operations. Periodically students must capture data from the “factory” by generating inventory and machine utilization reports. Since the “factory” can operate indefinitely the experience specifies only the minimum amount of data, which must be captured from a “factory.” A SIMFACTORY simulation run only develops data about quantities. To obtain cost data students must use COSTSUM, a program which generates summary cost data based on the simulated quantity results obtained from the “factory” run. COSTSUM provides reports which list direct labor, direct materials and overhead costs for each cost objective in the “factory.” These results are saved to a file for further analysis. Finally, the student calls the file of costs developed by COSTSUM into a spreadsheet program and develops cost and variance summary reports. These reports are unique to each student since the quantity, utilization and cost data are uniquely generated by SIMFACTORY and COSTSUM. SYSTEM REQUIREMENTS Hardware Because of the specialized hardware needed for SIMFACTORY, the most effective approach to using SIMFACTORY with a class is to establish a simulation workstation on which the students can run the “factories”. This workstation is used only to generate the production quantity data for first step of the exercise. The balance of the exercise can be performed on virtually any microcomputer. Several computer configurations can provide the minimum hardware required to run SIMFACTORY. Optionally you may add a plotter or printer for making prints of the graphics screens and copies of the snap shots. To be most effective the system should have color graphics capability. Software The SIMFACTORY simulation package is available from CACI Products Inc. While the commercial cost of the package is likely to be prohibitive for most academic institutions, CACI has made special arrangements in the past to provide this product to academic institutions at a greatly reduced price. COSTSUM is a program written by the authors in BASIC. It is available from the authors upon request. Any spreadsheet software such as LOTUS 1-2-3, Quatro or VPP Planner can be used for the third step in the exercise. SUMMARY The use of computer simulations as pedagogical tools has a long history. However, powerful animated simulation packages such as SIMFACTORY have not been brought into the classroom. In this paper we describe a way in which an animated simulation exercise can be used to enhance the realism of cost accounting. This project is continuing and the authors hope to develop applications for a variety of different cost accounting problems. Table of Contents Volume 18, 1991 Personality Types and Total Enterprise Simulation Performance Using DIS 'n DAT as a Decision Support System for a Marketing Simulation Game Theoretical Derivation of a Market Demand Function for Business Simulators The Ethnographic Case Study: An Experiential Approach to Teaching Retail Management Electronic Bulletin Board Systems (BBS): Support Software for Computer Simulations The New Budget Game Negame: A Cross-Cultural Role-Play to Introduce Students to the Familiarization Stage of Negotiations Modeling Short-Run Cost and Production Functions Using Sheppard's Lemma in Computerized Business Simulations Increasing Simulation Realism through the Modeling of Step Costs Predicting Simulation Performance: Differences Between Groups and Individuals A Facility Location Case to Stimulate Classroom Interaction Educational Effectiveness of Business Simulation Gaming: A Comparative Study of Students and Practitioner Perspective Ethical Dilemmas in Experiential Learning: Issues and Strategies A Critical Review and Assessment of ABSEL's Award-Winning Procedures and Protocols Political Risk: A Simulation for Business Practitioners Upside Down: A Cross-Cultural Game in Experiential Learning Gorby's Dilemma: From Communism to Free Enterprise in Two Hours Strategic Market: Planning with the COMPLETE Product Portfolio Analysis Package: A Marketing Decision Support System Career Concepts and Total Enterprise Simulation Performance Experiential Learning in Human Resources: A Performance Appraisal Application Managerial Motivation and Realism Among MBA Student as Viewed through The Looking Glass, Inc. Simulation An Experiential Approach to Teaching Data Analysis Using MYSTAT: Rationale, Procedures and Results Practicing What Was Preached: A Sequential Learning Model put to the Test Student Attitudes about Policy Course Simulations An Investigation of the Relationship Between Simulation Play, Performance Level and Recency of Play on Exam Scores The Effect of Leadership and Cognitive Processing Styles upon Peer Performance Evaluation: Implication for the Utilization of Simulations in Business Pedagogy On the Transfer of Market Oriented Business Games to Socialist Cultures An Application of Financial Analysis of the Business Firm in a Simulated Competitive Environment Collective Bargaining Simulation: An Exercise based on a Familiar Theme Making Business Policy a Strategic Management Experience A Student Exercise for Intergrating the Concepts of Power and Motivation The Boundaries Extended: An Experiment Comparing Dialectical Inquiry, Devil's Advocacy and Consensus Using the Executive Game Using a Simulation Package to Develop a Simulation Exercise in Cost Accounting Success Factors in Experiential Training for Creative Problem-Solving Teams An Experiential Approach for teaching Quality management Critical Success Ratios: A Comparison of Two Business Simulations in a Multi-Year Environment Stocklogs: A Classroom Exercise for Teaching the Logistical Relationship of Location and Inventory The Organizational Leadership Program Simulating Business Decision-Making: Using Statistical Cases for Classroom Exercises Scripting for the Classroom Upgrading the Business Strategy and Policy Game Developing Student Team-Building and Leadership Skills Using Computer-Aided Experiential learning Strategies Organizing and Outward Bound Field Trip An Architecture for Extensible Simulation Games Performance in the Capstone Business Course: What is the effect of Pedagogy, Learning Styles, and Student Motivation? Operational Strategy with Participant-Modifiable Parameters An Example of a Personal Selling Case Transformed into a Role Play Scenario Instructional Software: It's Evolution and Current State of the Art in the Business Curriculum Ascertaining Performance Variables for use in Determining Student's Grades in Courses Employing a Business Simulation Designing Management Seminars Using Business Simulations The Accounting Information Systems Course: Bridging the Gap between the Classroom and the Real World The Good Cooks Guide to Training Excellence: Working with Passion A Demonstration on Multiple Data Collection Methods: Seeing Strategic Issues Through the Looking Glass Simulation Systems Analysis and Design: Why Undergraduate Education gets a Failing Grade Accommodating Organizational Culture: An Evaluation of Management Development Delivery Modes in Varying Organizational Cultures Modeling Total Quality into Business Simulations The Political Futures Game Meeting Meeting Objectives