SABCO—An experiential learning project for introductory managerial accounting

Abstract

This teaching brief presents a capstone project designed to provide students with a contextual understanding of introductory management accounting theories through hands-on, experiential learning. It also exposes them to cross-disciplinary roles from operations management. Using this capstone approach, students quickly learn to prepare financial projections, either manually or in Microsoft Excel, to secure financing for their start-up business (Sand Art Brownie Company or SABCO) to produce and sell brownie mix during the holiday season. Students then assemble ingredients and create jars of brownie mix to gather the necessary data to evaluate initial projections and problem-solve for future production. This role play contextualizes the elements of direct and indirect labor, fixed and variable costs, and their impact on profit and borrowing. Postproduction reflection on the manufacturing activities and discussion of actual results of operations emphasizes the improvement and decision-making responsibilities in the management process. Feedback demonstrates that students find the exercise challenging and valuable and that it deepens their understanding of managerial accounting and its purpose in a company's management process.