Premium Essay

Solution Manual Ch 1 Cost Management and Strategy

In: Business and Management

Submitted By nasko
Words 2779
Pages 12
CHAPTER 1: COST MANAGEMENT AND STRATEGY EXERCISES

1-24 Strategy; Real Estate Services (15 min)
This exercise can be used to provide a good perspective for the students to see the role of cost management in solving business issues, and in placing the management accountant in more of a leadership role in the firm. It also provides an early motivation for the cost behavior issues to be discussed later in chapter 3 and chapter 8. The management accountant has a hunch that the company is about to take on a potentially damaging strategic initiative. This is a great opportunity to begin to play more of a strategic role in the company. The first step should be to obtain the relevant information about projected revenues and costs and do a careful analysis of the likely profitability of developing the new, smaller customers. Here’s how the case might be used in a class discussion. First, ask the class to identify the types of costs likely to be incurred by this company in providing its service. The answers are likely to include labor costs and materials for cleaning and maintenance, in addition to costs for maintaining the firm’s office. As these examples are given, put them on the chalkboard and collect 6 or 8 of them. Then, ask how each of these costs might differ between large and small customers. For example, the cost of cleaning labor and materials will likely be somewhat proportional to the square feet of space each customer occupies, so that cost projections based on current customer experience is likely to be useful in estimating the costs/profits of the smaller customers. However, security costs are likely to not vary greatly based on the size of the customer. How does this affect the pricing and the potential profitability of the smaller customers? Similarly, how will the office-related costs of managing the customer account differ between…...

Similar Documents

Premium Essay

Cost Accounting Ch. 6 Solution

...CHAPTER 6 MASTER BUDGET AND RESPONSIBILITY ACCOUNTING 6-1​The budgeting cycle includes the following elements: a.​Planning the performance of the company as a whole as well as planning the performance of its subunits. Management agrees on what is expected. b.​Providing a frame of reference, a set of specific expectations against which actual results can be compared. c.​Investigating variations from plans. If necessary, corrective action follows investigation. d.​Planning again, in light of feedback and changed conditions. 6-2​The master budget expresses management’s operating and financial plans for a specified period (usually a fiscal year) and includes a set of budgeted financial statements. It is the initial plan of what the company intends to accomplish in the period. 6-3​Strategy, plans, and budgets are interrelated and affect one another. Strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace to accomplish its objectives. Strategic analysis underlies both long-run and short-run planning. In turn, these plans lead to the formulation of budgets. Budgets provide feedback to managers about the likely effects of their strategic plans. Managers use this feedback to revise their strategic plans. 6-4​We agree that budgeted performance is a better criterion than past performance for judging managers, because inefficiencies included in past results can be detected and eliminated in budgeting. Also, future......

Words: 3835 - Pages: 16

Premium Essay

Cost Management Solution Ch13

...CHAPTER 13 NON-FINANCIAL AND Current liabilitieS SOLUTIONS TO EXERCISES EXERCISE 13-1 (10-15 minutes) (a) Classifications on balance sheet prepared under ASPE: |1. |Current liability; financial liability. | |2. |Current asset. | |3. |Current liability or long-term liability depending on term of warranty; not a financial liability. | |4. |Current liability; financial liability. A company would have an obligation to pay cash to the bank for any overdraft and this | | |would result from the contractual agreement with the bank. | |5. |Current liability; not a financial liability if this refers to income tax withholdings, CPP and EI. This is a financial liability | | |if it refers to other withholdings of a contractual nature with employees (union dues, for example). | |6. |Current liability; financial liability. | |7. |Current or noncurrent liability depending upon the time involved; not a financial liability (if deposit will be returned then it | | ......

Words: 7708 - Pages: 31

Premium Essay

The Government and Not-for-Profit Environment Chapter 1 Solution Manual

...Chapter 1 The Government and Not-For-Profit Environment ------------------------------------------------- Questions for Review and Discussion 1. The critical distinction between for-profit businesses and not-for-profits including governments is that businesses have profit as their main motive whereas the others have service. A primary purpose of financial reporting is to report on an entity’s accomplishments — how well it achieved its objectives. Accordingly, the financial statements of businesses measure profitability, their key objective. Financial reports of governments and other not-for-profits should not focus on profitability, since it is not a relevant objective. Ideally, therefore, they should focus on other performance objectives, such as how well the organizations met their service goals. In reality, however, the goal of reporting on how well they have achieved such goals has proven difficult to attain and the financial reports have focused mainly on financially-related data. 2. Governments and not-for-profits are “governed” by the budget, whereas businesses are governed by the marketplace. The budget is the key political and fiscal document of governments and not-for-profits. It determines how an entity obtains its resources and how it allocates them. It encapsulates most key decisions of consequence made by the organization. In a government the budget is not merely a managerial document; it is the law. 3. Owing to the significance of the......

Words: 5073 - Pages: 21

Free Essay

Implementing Strategies - Management and Operations Issues Ch 07

...IMPLEMENTING STRATEGIES: MANAGEMENT AND OPERATIONS ISSUES CHAPTER OUTLINE | |The Nature of Strategy Implementation | | |Annual Objectives | | |Policies | | |Resource Allocation | | |Managing Conflict | | |Matching Structure with Strategy | | |Restructuring, Reengineering, and E-Engineering | | |Linking Performance and Pay to Strategies | | |Managing Resistance to Change | | |Creating a Strategy-Supportive Culture | | |Production/Operations Concerns When Implementing Strategies......

Words: 6208 - Pages: 25

Premium Essay

Solution for Ongc Case Study on Strategy Management

...Strategy management * Prof. Sunil Sharma Date: April 9, 2014 Value chain of business * It’s a decision of an organization that how much of value chain it wants to occupy. * An organization may go for backward, forward or vertical integration in value chain * An organization may decide to go from one value chain to other value chain * From economists’ point of view in a competitive market, there will be atleast 3-4 competitors of equal caliber and market share would not be more than 35% for a given company. In theory there has to be numerous competitors for a perfectly competitive market. Case: ONGC India – In search of new growth strategy ONGC has gone for vertical integration during Mr. Raha’s tenure. Mr. Sharma has to decide whether to continue with the same or differ. Pros: 1. The bullish market earned lot of fortune. The earned money can be easily invested into diversification and hence multiplicate from this investment in future. 2. If they see investments in renewable sources of energy, ONGC can also start to be looked upon as green company. 3. When Mr. Subir Raha took over the workforce was highly de-motivated, and all the cash that had been earned would be given back to government in form of dividends. Mckinskey had projected that ONGC would go sick if it continues to operate the way it operates now. Mr. Raha saw an opportunity in the additional cash of Rs. 18,400 was seen as opportunity to create new business & new......

Words: 1040 - Pages: 5

Premium Essay

Business Law Ch 1 Solutions 12e

...Chapter 1 Introduction to Law and Legal Reasoning Answers to Questions in the Reviewing Feature AT THE END OF THE CHAPTER 1A. PARTIES The automobile manufacturers are the plaintiffs, and the state of California is the defendant. 2A. Remedy The plaintiffs are seeking an injunction, an equitable remedy, to prevent the state of California from enforcing its statute restricting carbon dioxide emissions. 3A. Source of law This case involves a law passed by the California legislature and a federal statute; thus the primary source of law is statutory law. 4A. Finding the law Federal statutes are found in the United States Code, and California statutes are published in the California Code. You would look in these sources to find the relevant state and federal statutes. Answer to Debate This Question in the Reviewing Feature at the End of the Chapter UNDER THE DOCTRINE OF STARE DECISIS, COURTS ARE OBLIGATED TO FOLLOW THE PRECEDENTS ESTABLISHED IN THEIR JURISDICTIONS UNLESS THERE IS A COMPELLING REASON NOT TO. SHOULD U.S. COURTS CONTINUE TO ADHERE TO THIS COMMON LAW PRINCIPLE, GIVEN THAT OUR GOVERNMENT NOW REGULATES SO MANY AREAS BY STATUTE? BOTH ENGLAND AND THE U.S. LEGAL SYSTEMS WERE CONSTRUCTED ON THE COMMON LAW SYSTEM. THE DOCTRINE OF STARE DECISIS HAS ALWAYS BEEN A MAJOR PART OF THIS SYSTEM—COURTS SHOULD FOLLOW PRECEDENTS WHEN THEY ARE CLEARLY ESTABLISHED, EXCEPTED UNDER COMPELLING REASONS. EVEN THOUGH MORE COMMON LAW IS BEING TURNED......

Words: 2146 - Pages: 9

Premium Essay

Solution Manual

...Database Modeling and Design – 4th Edition (2006) Toby Teorey, Sam Lightstone, Tom Nadeau Exercises with Solutions – Solutions Manual ER and UML Conceptual Data Modeling Problem 2-1 Draw a detailed ER diagram for an car rental agency database (e.g. Hertz), keeping track of current rental location of each car, its current condition and history of repairs, and customer information for a local office, expected return date, return location, car status (ready, being-repaired, currently-rented, being-cleaned). Select attributes from your intuition about the situation, and list them separately from the diagram, but associated with a particular entity or relationship in the ER model. Solution to 2-1 Problem 2-2 Given the following assertions for a relational database that represents the current term enrollment at a large university, draw an ER diagram for this schema that takes into account all the assertions given. There are 2000 instructors, 4000 courses, and 30,000 students. Use as many ER constructs as you can to represent the true semantics of the problem. Assertions: An instructor may teach one or more courses in a given term (average is 2.0 courses). An instructor must direct the research of at least one student (average = 2.5 students). A course may have none, one, or two prerequisites (average = 1.5 prerequisites). A course may exist even if no students are currently enrolled. All courses are taught by exactly one......

Words: 3109 - Pages: 13

Premium Essay

External Audit Ch. 1 Solutions

...CHAPTER 1 AN INTRODUCTION TO ASSURANCE AND FINANCIAL STATEMENT AUDITING Answers to Multiple-Choice Questions 1-13 | b | | 1-19 | a | 1-14 | b | | 1-20 | d | 1-15 | c | | 1-21 | d | 1-16 | c | | 1-22 | d | 1-17 | c | | 1-23 | b | 1-18 | c | | | | Solutions to Problems 1-24 The memo should cite the following facts: * There is a historical relationship between accounting and auditing. * When parties to the agency relationship (contract) do not possess the same amount of information (information asymmetry) there is a natural conflict of interest between the parties. For example, when an owner and manager are negotiating an employment contract, the owner may assume that the manager likely will use organizational funds for personal uses. Auditing plays an important role in such relationships. The owner and manager will consummate an employment contract only if the manager agrees to be monitored. Auditing can be used to monitor the contract agreed to by the two parties. (P.S. As an attorney, Lee should be well versed on contract law.) * ...

Words: 710 - Pages: 3

Premium Essay

Corporate Finance Ch 1 Solutions

...Solutions to Chapter 1 The Firm and the Financial Manager 1. real executive airplanes brand names financial stock investment capital budgeting financing 2. A firm might cut its labor force dramatically which could reduce immediate expenses and increase profits in the short term. Over the long term, however, the firm might not be able to serve its customers properly or it might alienate its remaining workers; if so, future profits will decrease, and the stock price will decrease in anticipation of these problems. Similarly, a firm can boost profits over the short term by using less costly materials even if this reduces the quality of the product. Once customers catch on, sales will decrease and profits will fall in the future. The stock price will fall. The moral of these examples is that, because stock prices reflect present and future profitability, the firm should not necessarily sacrifice future prospects for short-term gains. 3. The key advantage of separating ownership and management in a large corporation is that it gives the corporation permanence. The corporation continues to exist if managers are replaced or if stockholders sell their ownership interests to other investors. The corporation’s permanence is an essential characteristic in allowing corporations to obtain the large amounts of financing required by many business entities. 4. A sole proprietorship is easy to set up with a minimum of legal work. The......

Words: 3282 - Pages: 14

Premium Essay

Cost Management Chapter 2 Solution

...Chapter 2 The Cost Function LEARNING OBJECTIVES Chapter 2 addresses the following questions: Q1 What are different ways to describe cost behavior? Q2 What is a learning curve? Q3 What process is used to estimate future costs? Q4 How are the engineered estimate, account analysis, and two-point methods used to estimate cost functions? Q5 How does a scatter plot assist with categorizing a cost? Q6 How is regression analysis used to estimate a mixed cost function? Q7 What are the uses and limitations of future cost estimates? These learning questions (Q1 through Q7) are cross-referenced in the textbook to individual exercises and problems. COMPLEXITY SYMBOLS The textbook uses a coding system to identify the complexity of individual requirements in the exercises and problems. Questions Having a Single Correct Answer: |No Symbol |This question requires students to recall or apply knowledge as shown in the textbook. | |e |This question requires students to extend knowledge beyond the applications shown in the textbook. | Open-ended questions are coded according to the skills described in Steps for Better Thinking (Exhibit 1.10): ( Step 1 skills (Identifying) ( Step 2 skills (Exploring) ( Step 3 skills (Prioritizing) ( Step 4 skills (Envisioning) QUESTIONS 2.1 This function has both fixed costs and variable costs. ......

Words: 8844 - Pages: 36

Free Essay

Micro Strategies’ Document Management Solutions for Regional Banks

...Micro Strategies’ Document Management Solutions for Regional Banks meet the unique requirements and challenges of the Banking Industry. Regional Banks continue to look for ways to cost effectively process inbound paper and electronic documents. These firms are also looking to manage the access, control, and use of documents created and stored within numerous repositories throughout their organization. Regional Banking industry trends, including consolidations and the desire to centralize operational functions, have forced many financial institutions to seek ways to reign in the costs and inefficiencies associated with disparate document processes. Micro Strategies provides customers with the insight, industry awareness, and technical expertise necessary to design and implement efficient document processing solutions for all types of simple and complex business workflows specific to regional banks. Whether the system is to be used to address a single departmental need or as a firm-wide content management platform – addressing both individual line of business (LOB) requirements and document management needs across the organization – Micro Strategies offers targeted and scalable solutions built on industry leading technology. Reduce cost of operations with improved document processing Increase efficiency allowing less staff to manage increasing number of documents Faster processing of customer documents for new account openings Improve customer service with......

Words: 600 - Pages: 3

Premium Essay

Principals of Management Ch 1

...Principals Of Management August 30th 2013 Chapter One – Case for Critical Analysis 1. It is possible for the top management to change Elektra Products into a new kind of organization. They should have taken the time to listen to their employee’s suggestions about the company with open minds. Instead of completely shooting down the team’s ideas, top management should have been open to the ideas or perhaps suggested some small changes to the ideas they didn’t agree with. Also, although Martin Griffin had an emergency that caused him to leave the meeting, he should have apologized, explained that he had an emergency then reschedule the meeting so he could hear the ideas as well. He would make his employees happier which would motivate them to work harder since they’ll be in an environment they feel comfortable in. 2. Barbra could have avoided the problems her team faced in the meeting by planning ahead. She is a loyal employee who has been with the company for some time now. She should have anticipated their rebuttals and should have had a defense prepared. 3. If I were Barbra Russell, I would take what top management said into consideration. I would use their arguments to tweak the report to make it better then present it to top management again. I wouldn’t let their arguments throw our idea away. If Martin Griffin was enthusiastic, I’d try to have another meeting where I pitch the teams idea and make sure he’s present to hear the entire thing....

Words: 253 - Pages: 2

Premium Essay

Solution Manual to Introduction to Management

... Problem 1-14B (45 minutes) 1. | |House Of Pianos, Inc. | | |Traditional Income Statement | | |For the Month Ended September 30 | | | | | | | |Sales (60 pianos × $3,300 per piano) | |$198,000 | | |Cost of goods sold | |   89,520 | | |(60 pianos × $1,492 per piano) | | | | |Gross margin | |108,480 | | |Selling and administrative expenses: | | | | |Selling expenses: | | | | |Advertising ...

Words: 2262 - Pages: 10

Premium Essay

Ch. 1 Solutions Fi504

...CHAPTER 1 Introduction to Financial Statements ANSWERS TO QUESTIONS  1. The three basic forms of business organizations are (1) sole proprietorship, (2) partnership, and (3) corporation.  2. Advantages of a corporation are limited liability (stockholders not being personally liable for corporate debts), easy transferability of ownership, and easier to raise funds. Disadvantages of a corporation are increased taxation and government regulations.  3. Proprietorships and partnerships receive favorable tax treatment compared to corporations and are easier to form than corporations. They are also owner controlled. Disadvantages of proprietorships and partnerships are unlimited liability (proprietors/partners are personally liable for all debts) and difficulty in obtaining financing compared to corporations.  4. Yes. A person cannot earn a living, spend money, buy on credit, make an investment, or pay taxes without receiving, using, or dispensing financial information. Accounting provides financial information to interested users through the preparation and distribution of financial statements.  5. Internal users are managers who plan, organize, and run a business. To assist management, accounting provides timely internal reports. Examples include financial comparisons of operating alternatives, projections of income from new sales campaigns, forecasts of cash needs for the next year, and financial statements.  6. External users are those outside the......

Words: 3539 - Pages: 15

Premium Essay

Solution Manuals

...Management Accounting: Information for Decision-Making and Strategy Execution - 6.Edition - 2012 Anthony A. Atkinson, Robert S. Kaplan Pearson I have both Solution Manulas And Test Banks Of this Book Contact  ahad2030@yahoo.com Chapter 1 How Management Accounting Information Supports Decision Making QUESTIONS 1-1 Management accounting is a discipline that designs planning and performance measurement systems, using financial and nonfinancial information, to help an organization develop and implement its strategy. The information must be relevant and helpful, and customized to serve multiple purposes, such as making decisions, allocating resources, and monitoring, evaluating, and rewarding performance. Information for the “plan” and “do” steps of the PDCA cycle includes prospective data on costs, profits, efficiency, and quality associated with alternative ways to produce or provide goods or services. Information for the “check” and “act” steps includes assessments of how well the organization is achieving its objectives. Common information requirements include measures of cost, quality, profitability, and timeliness. 1-2 A company’s operators, managers, and executives need information for their operational control and improvement activities, as well as on the performance of their individual processes, products, services, and customers. This information is important to direct managers’ attention to areas where improvement is needed, to provide......

Words: 7550 - Pages: 31