Managerial Accounting Simulation

Apply managerial accounting to product and investment decisions

Students apply contribution margin, break-even, CVP, ROI and NPV to compare three products and justify their recommendation. They then allocate a $100 million budget across five opportunities from multiple executive perspectives.

1 - 2-hour single-player simulation
Analyse key managerial accounting metrics
In-class, online or hybrid delivery

From product economics to capital allocation

Students first evaluate three consumer electronic products using cost, profitability and investment data. They then compare five investment opportunities through various senior executive perspectives before allocating a limited budget.

Product profitability

Compare cost structures, contribution margins and break-even exposure.

Performance measurement

Interpret ROI, NPV, margins and operating performance together.

Capital allocation

Allocate a fixed budget across competing product opportunities.

At a glance

Duration

1 - 2 hours

Run the complete experience in one intensive session or divide its principal decision stages across two classes.

Format

Individual submissions

Each participant enters their own calculations, choices, allocations and reasons, with cohort comparison at the output stages.

Level

UG, PG and MBA

Suitable for accounting, finance, management and related business courses.

Professor tools

Timeline, controls and alerts

Manage stage progression, adjust timings, pause delivery and communicate with participants.

Prerequisites

Beginner accessible

Suitable for beginners, with guidance, case information, video and interface instructions.

Delivery

In class, online or hybrid

The web-based simulation can also support independent homework within a professor-defined window.

Optional assessment

Individual performance evidence

Use calculations, selections, allocations, written reasons and comparative outputs, or run it as an ungraded activity.

Syllabus Fit

Fits various finance modules

Designed for Introduction to Finance, Financial Accounting, Managerial Accounting, Management Accounting, Corporate Finance and Financial Management

The foundation of better decisions and long-term value

From product-level metrics to a $100 million capital decision - evaluated through four executive lenses.

Managerial Accounting simulation gameflow and stages

1. Intro:

4 minutes

Students begin with a short introductory video that brings the simulation context to life and builds excitement for the decisions ahead. The video explains the purpose of the simulation, the overall mission, the executive perspectives they will consider, the stages they will complete and the criteria used to evaluate their performance.

Before the first timed decision begins, students can review their Mission, Brief and Actions. This ensures they understand what they are responsible for, what information is available and what they must submit during each stage.

2. Product Selection:

40 minutes

Students begin by carefully reading their Mission and Actions so they understand the decision they are being asked to make. They then review the descriptions of three consumer-audio products, including their positioning, target markets, features, cost structures, sales forecasts and projected financial information.

Before entering any figures, students need to understand how the three products differ and which commercial assumptions are likely to influence performance. They then calculate the required managerial-accounting and investment measures for all three products, including contribution margin, break-even measures, margin of safety, ROI and NPV.

Tooltips are available to help students understand what each metric measures and how it should be calculated. Students are expected to use these tools to support their learning rather than simply entering figures without interpreting them.

Once all metric values have been submitted for the three products, students compare the results, select the product they believe offers the strongest overall opportunity and provide a written rationale. Their explanation should connect the calculations to the final decision, identify the most influential measures and acknowledge any important trade-offs before submission.

3. Product Selection Outputs:

5 minutes

Students review the Product Selection leaderboard, the documented correct product and the explanation behind the optimal choice. This allows them to compare their own calculations, selection and reasoning with the expected outcome.

The output stage helps students identify whether differences resulted from calculation errors, the way they interpreted the metrics or the weight they gave to particular measures. It also creates a natural pause for reflection before they move from choosing one product to making a wider capital-allocation decision.

4. Invest Capital:

40 minutes

Students begin by reviewing their Mission, Actions and Executive Strategy Brief. These materials explain the £100 million capital constraint, the five investment opportunities and the different priorities represented by the CFO, COO and CMO perspectives.

Students must understand each executive perspective before making an allocation. The CFO considers financial value and efficiency, the COO focuses on operational feasibility and risk, and the CMO considers market potential, demand and commercial positioning.

They then analyse the available metrics and test different combinations of products within the £100 million limit. Students should not rush to the first affordable portfolio. They are expected to compare alternatives, examine what is gained or sacrificed through each allocation and record a rationale for every executive decision.

After completing the CFO, COO and CMO allocations, students step into the CEO perspective. They review the three functional recommendations, consider where they agree or conflict and make the final capital-allocation decision. The CEO portfolio should balance financial returns, operational resilience and market opportunity rather than simply copy one executive’s recommendation.

Students must provide clear reasoning for the CFO, COO, CMO and final CEO choices before submitting. Careful analysis, testing different combinations and explaining the trade-offs behind each decision are central to this stage.

5. Invest Capital Outputs:

No time limit

Students review their final ranking, executive-perspective decisions, capital deployed and products selected. The Leaderboard, Outputs and Products views allow them to compare their portfolio with those created by other participants.

This stage supports both individual reflection and a wider class debrief. Students can examine how others used the same information, identify different approaches to the £100 million constraint and consider why particular portfolios achieved different outcomes or scores.

The professor can invite students to question one another about the strategies behind their decisions. For example, students may explain which metrics they prioritised, which products they rejected, how their CFO allocation differed from their CEO decision and what trade-offs shaped the final portfolio.

The debrief can therefore be led partly by the students themselves. By comparing outcomes and discussing the analysis behind them, participants can see that different portfolios may reflect different assumptions, priorities and interpretations of the evidence. This creates an opportunity to revisit calculations, challenge reasoning and consider how their decisions might change after hearing another student’s approach.

Why professors use it

It connects technical calculations to a decision that students must explain and defend.

Interpret managerial accounting measures together

Students calculate contribution margin, break-even, ROI and NPV, then decide how the measures should be interpreted when they point towards different product choices.

Compare product profitability and resource priorities

Students consider cost behaviour, contribution, operating exposure, return and market potential rather than selecting a product using one measure alone.

Generate evidence for a focused debrief

Calculations, selections, written rationales and capital allocations help professors compare technical accuracy, interpretation and decision quality.

What the experience looks like

The professor dashboard supports preparation, timing and delivery, while the student interface guides participants from product-level calculations to final capital allocation.

Control stages and timing

The Timeline displays the complete simulation sequence and its stage durations. Professors can adjust timings, start automatic progression or move every participant manually to a selected stage.

Guidance in one place

The Admin Guide provides access to Setup & Facilitation, Teaching Notes and the Gameflow Diagram. Player Management allows professors to manage participants and open an individual student view when access needs to be checked.

Run and manage the session

Play starts automatic progression. Pause holds the timer in the current stage. Stop locks student screens.

Case materials students work with

Students receive qualitative product information and quantitative financial evidence. They must connect product positioning and market assumptions with cost structures, operating performance and investment value.

Product, market and cost information

Students review the product proposition, features, target market, selling price, variable costs, fixed-cost categories and sales forecast.

Forecasted income, cash flows and return measures

Students review projected income, expected cash flows and measures including discount rate, IRR, payback and profitability index.

4 mins

Student Intro Video

A short introduction that prepares students for the simulation by explaining the context, objectives, key stages and what they need to do before the timed activity begins.

Assessment and scoring

Assessment is optional. Professors may run the simulation as an ungraded applied activity or use platform-generated calculations, decisions, reasons and comparative outputs as evidence within a wider assessment.

The platform data can support academic judgement, but simulation scores and rankings should not automatically replace it.

What professors can assess

• Calculation accuracy
• Written decision rationale

How to interpret the results

• Compare product choices with the documented optimal answer
• Review each allocation through its executive perspective

What professors can assess:

Calculation accuracy: Review whether the student correctly applied the required managerial-accounting and investment measures. A weak final choice may result from a calculation error rather than weak judgement.
Written decision rationale: Assess whether the reasons identify relevant evidence, acknowledge trade-offs and connect the calculations to the submitted choice.
Optional individual assessment report: Students may be asked to submit a short written report outside the platform once they have reviewed and reflected on their scores. This is not automatically captured or graded by the simulation.

How to interpret the results:

Compare product choices with the documented optimal answer Use the correct Product Selection answer as a comparison point. Also consider the calculations and reasons supporting the student's choice.
Review each allocation through its executive perspective Interpret CFO, COO and CMO selections in relation to the information available in each perspective. Then review how the final CEO allocation balances them.

Professor setup and delivery

The simulation can progress automatically after it is started, or the professor can control the class manually through the Timeline. Coaching is optional.

Step 1

Add participants and check access

Use Player Management to add participants and confirm access before the timed activity. The professor can open an individual participant's Student Interface where a test is required.

Step 2

Configure timings and session settings

Review the default stage durations and use Adjust to fit the planned delivery format. Decide whether the simulation will run in one session or be divided after Product Selection Outputs.

Step 3

Start and manage the simulation

Press 'Play' to start the timer and automatic progression. 'Pause' is useful for a short break or class-wide clarification. 'Stop' halts the timer and locks student screens.

Step 4

Review outputs and prepare the debrief

Use student outputs, role filters and comparative results to identify calculation differences, decision patterns and contrasting capital allocations. Coaching is optional and should examine the process rather than reveal a preferred answer.

Professor Resources

Everything needed to prepare, run and debrief the Managerial Accounting simulation is organised within the resources below.

Cost-Volume-Profit (CVP) Analysis
Break-Even Analysis
Contribution Margin Analysis
Activity-Based Costing (ABC)
Variance Analysis
Performance Measurement and ROI

Creators of the Managerial Accounting Simulation

These industry professionals were involved in the inception, creation, development, testing and optimisation of the simulation.

Investment banking, capital markets, PE, and corporate ratings experience at Morgan Stanley, S&P, and HPS Investment Partners. Holds a PhD in Quantitative Finance.

Gerhard Wörtche

Senior investment banker at Morgan Stanley with experience in M&A and TMT coverage across New York and San Francisco. Studied business at Kellogg.

Bharat Venugopal

Over 15 years of experience across advisory, PE, VC, family offices, and entrepreneurship. Covered M&A transactions from multiple angles and holds a PhD in Corporate Finance.

Olaf Rottke

Worked in the finance department of Precomp Tools. Studied Engineering and holds an MSc in Corporate Finance from Bayes.

Aatmay Upponi

FAQs

Students calculate contribution margin, break-even point and margin of safety for competing consumer-audio products, then use those outputs to recommend which product the company should support. The calculations therefore have a decision consequence: students must explain what the measures imply about operating leverage, risk and commercial attractiveness. Professors can use differences between the numerical answer and the recommendation to reveal whether students understand the management meaning of CVP analysis rather than only the mechanics.

The measures answer different questions. Contribution margin, break-even and margin of safety describe the operating economics and volume risk of a product, while ROI and NPV address the return generated by the investment required. A product can look attractive on one dimension and weaker on another. Requiring students to consider the measures together shows why managerial decisions should not be reduced to one ratio and gives professors a basis for discussing short-term operating performance alongside longer-term value creation.

In the second part of the simulation, students consider the same product portfolio through CFO, COO, CMO and CEO perspectives before allocating a fixed $100 million budget. Each perspective draws attention to different evidence, such as financial return, operating feasibility, market opportunity or overall strategic balance. Although the activity is single-player, it requires the student to reconcile these lenses in one executive decision. This creates a useful debrief on why cross-functional recommendations can conflict even when everyone is looking at the same products.

The selected product should be treated as only one piece of evidence. Professors can also review the calculations, the measures the student prioritised and the written rationale supporting the choice. Arriving at the documented answer by guessing, copying or relying on an irrelevant metric does not demonstrate the intended learning. Conversely, a student who makes a different choice but identifies a genuine trade-off may provide useful evidence of judgement. The platform outputs are strongest when combined with evaluation of the reasoning behind them.