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B&B Chapter 28

In: Business and Management

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Chapter 28
MANAGEMENT ACCOUNTING SYSTEM DESIGN

Changes from the Twelfth Edition

All changes to chapter 28 were minor.

Approach

A brief summary chapter seems to help students consolidate their previous topic-by-topic learning, and they appreciate such a chapter for final exam study preparation. The summary of the many different adjectives placed before the word “cost” and the concepts behind these adjectives is useful. However, because there is no conceptually new material here, one need not spend much time on the text. Rather, instructors can jump right into a discussion of one of the chapter’s cases, which is intended to raise issues that cut across multiple chapters.

Cases

Puente Hills Toyota raises many financial responsibility center, performance measurement, and incentive systems issues in a car dealership setting.

Axeon N.V. illustrates the real world application of many management accounting and control concepts, including incremental cost analysis, capital budgeting, sensitivity analysis, transfer pricing, organization design, and control system administration.

Case 27-1: Puente Hills Toyota

Note: This case is unchanged from the Twelfth Edition.

Purpose of Case

This case can be used to motivate discussions of a number of topics, including financial responsibility centers, performance measurement, transfer pricing, and incentives. The setting is an automobile dealership, a business about which all students have some interest and understanding. And the setting is real, so students can benefit from secondary learning about the industry and business.

Suggested Assignment Question

Evaluate the performance measurement and incentive systems use at Puente Hills Toyota. What changes would you recommend, if any?

Discussion

The case illustrates clearly that financial responsibility centers exist...

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