A Managerial Accounting Case Utilizing Optimization And Simulation

Abstract

This paper describes a unique management accounting case appropriate for use in introductory or upper level managerial accounting courses. Monte Carlo Simulation and Microsoft’s Excel’s Solver add-in are used to assist in managerial accounting decisions relating to factors influencing the profitability of a small manufacturing operation. Simulation and optimization spreadsheets illustrate the analysis of financial risk and uncertainties in factors affecting future profits that can provide useful information for decision-makers.