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Accounting
Analyzing whether to keep the billing function within an organization or outsource it Deciding to give bonuses for superior performance to the employees in a Japanese subsidiary and extra vacation time to the employees in a Swedish subsidiary Including costs of all the value-chain functions before deciding to launch a new product, but including only its manufacturing costs in determining its inventory valuation

Analyzing whether to keep the billing function within an organization or outsource it Deciding to give bonuses for superior performance to the employees in a Japanese subsidiary and extra vacation time to the employees in a Swedish subsidiary Including costs of all the value-chain functions before deciding to launch a new product, but including only its manufacturing costs in determining its inventory valuation

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

For each of the following items, identify which of the management

accounting guidelines applies: cost-benefit approach, behavioral and technical

considerations, or different costs for different purposes.

  1. Analyzing whether to keep the billing function within an organization or outsource

it

  1. Deciding to give bonuses for superior performance to the employees in a Japanese

subsidiary and extra vacation time to the employees in a Swedish subsidiary

  1. Including costs of all the value-chain functions before deciding to launch a new

product, but including only its manufacturing costs in determining its inventory

valuation

  1. Considering the desirability of hiring one more salesperson
  2. Giving each salesperson the compensation option of choosing either a low salary

and a high-percentage sales commission or a high salary and a low-percentage sales

commission

  1. Selecting the costlier computer system after considering two systems
  2. Installing a participatory budgeting system in which managers set their own

performance targets, instead of top management imposing performance targets on

managers

  1. Recording research costs as an expense for financial reporting purposes (as

required by U.S. GAAP) but capitalizing and expensing them over a longer period for

management performance evaluation

purposes9. Introducing a profit-sharing plan for employees.

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