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. 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 Considering the desirability of hiring one more salesperson 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 Selecting the costlier computer system after considering two systems Installing a participatory budgeting system in which managers set their own performance targets, instead of top management imposing performance targets on managers 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.
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. 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 Considering the desirability of hiring one more salesperson 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 Selecting the costlier computer system after considering two systems Installing a participatory budgeting system in which managers set their own performance targets, instead of top management imposing performance targets on managers 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.
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
accounting guidelines applies: cost-benefit approach, behavioral and technical
considerations, or different costs for different purposes.
- 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
valuation
- Considering the desirability of hiring one more salesperson
- 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
- Selecting the costlier computer system after considering two systems
- Installing a participatory budgeting system in which managers set their own
performance targets, instead of top management imposing performance targets on
managers
- 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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