Regression Analysis—Instructional Resource for Cost/Managerial Accounting

• In Event: Teaching, Learning, and Curriculum I

Abstract

The ability to generate accurate forecasts (for planning, decision-making, and control purposes) is fundamental to the work of the managerial accountant. Experience of the author suggests difficulty on the part of students—graduate as well as undergraduate—in applying statistical concepts in an accounting context. This paper describes a classroom-tested instructional resource that embraces two primary objectives: one, “demystify” technical material from statistics regarding ordinary least-squares (OLS) regression analysis—material that students may find obscure or overly abstract; and, increase student knowledge regarding the use of Excel for estimating and interpreting the results from both linear and learning-curve cost functions. The resource consists of a set of PowerPoint slides, Word documents, and Excel files (all of which are available from the author) divided into two major parts: part one consists of four files that deal with simple (i.e., one-variable) linear regression; part two consists of three files related to one type of learning-curve model (viz., the incremental unit-time model). The resource is flexible in that it can be: used at both graduate and undergraduate courses in cost/management accounting; customized to meet the needs of individual instructors (coverage of the entire resource requires approximately two weeks of in-class time); and, used in conjunction with any cost/management accounting textbook. The resource may be especially valuable for those classes in which a textbook is not required. Throughout the resource (and in this paper) many references to related online supplemental material are provided, including links to relevant online video clips. Survey evidence obtained from recent applications of the resource, in both undergraduate cost accounting and in MBA managerial accounting, indicates positive reception on the part of students: students perceive significant value in using the resource; the vast majority of students recommend that the resource be used in future offerings of the course in question. Pre-test vs. post-test results, though limited in scope, provide evidence of student learning.

Author

• David E. Stout, Youngstown State University