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1. Planning. The management accountant gains an understanding of the impact on the organization of planned transactions (i.e., analyzing strengths and weaknesses) and economic events (both strategic and tactical) and sets obtainable goals for the organization. The development of budgets is an example of planning. Control and evaluation. The management accountant ensures the integrity of financial information, monitors performance against budgets and goals, and provides information internally for decision making. Comparing actual performance against budgeted performance and taking corrective action where necessary is an example of control and evaluation. Continuous improvement. The management accountant helps identify opportunities for improvement, measures the projected costs and benefits, and reports on the actual outcomes. Decision making. The management accountant helps in the analysis of various alternatives and helps to choose the optimum course of action.
2. a. Planning; expected price and cost information are needed. b. Continuous improvement; cost savings from improved order entry quality. c. Control and evaluation; a performance report triggered the investigation that led to corrective action. d. Planning; forecasting of financial effects is necessary. e. Decision making; accounting must analyze cost-volume-profit effects. f. Continuous improvement; before-and-after costs are needed. g. Decision making; cost information for a keep-or-drop decision is needed. h. Continuous improvement; cost information for setups and materials waste.
Problems
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At first glance, this seems simple. Couldn’t John simply mention that Patty had
