How much money am I making? BeYoutiful Bath Bombs Inventory Costing Project
AICPA core Competencies:
This experiential learning project helps develop students as future accountants and addresses
several AICPA core competencies including:
Professional competencies
interpretation: Students apply their
knowledge of standard cost
accounting to compute inventory
cost and gross profit margin of 4
inventory items.
Strategic perspective: Students
measure cost and gross profit margin
of inventory items at regular price
and at a "buy 4 get 1 free" price.
They must answer the question: is
this sales offer profitable? How do
these prices compare to similar
products in the market? How else
could the business owner apply
Professional behavior: Students
practice professional behavior
when interacting with the business
owner to understand the business
environment, ask important
questions, and create solutions.
Reporting: Students write a
business memo that clearly explains
how they arrived at the inventory
cost of each item. Each group is
also required to deliver an oral
presentation summarizing their final
calculations and recommendations
Global and industry perspectives:
To complete this project students
must understand the business, the
business environment and its
competitors to make final pricing
recommendations and suggestions
for improvements.
Decision-making: Students use
cost accounting concepts to
create an inventory costing model
and then using current selling
prices, compute gross profit
margins. Finally, analyze if "buy 4
get 1 free" sale offers are
Technology and tools: Students
create a spreadsheet to arrive at the
cost of each inventory item. They
also use power point or a similar tool
to deliver their final presentation.
The practice of creating costing
models in excel helps students
clearly understand the final
inventory values and will give
students confidence to explain both
orally and in writing their results to
individually compute inventory
cost and then together in small
groups arrive at a consensus to
present in a spreadsheet to the
business owner. This allows for
deliberation among team
members during which students
raise questions and give support
for their own calculations before
arriving at the final amounts.
Communication: Students use
both written and oral
communication skills to present
solutions to the business owner.
Project management: Students
work together in small groups to
complete the project by the end of