Chapter 1, Problem 1E

Classify each of the following actions as either being associated with the financial accounting information system (FS) or the cost management information system (CMS):

1. a. Determining the total compensation of the CEO of a public company
2. b. Issuing a quarterly earnings report
3. c. Determining the unit product cost using TDABC
4. d. Calculating the number of units that must be sold to break even
5. e. Preparing a required report for the SEC
6. f. Preparing a sales budget
7. g. Using cost and revenue information to decide whether to keep, or drop, a product line
8. h. Preparing an annual statement of financial position that conforms to generally accepted accounting principles (GAAP)
9. i. Using cost and revenue information to decide whether to invest in a new production system or not
10. j. Reducing costs by improving the overall quality of a product
11. k. Using a debt-equity ratio and liquidity ratios from a balance sheet to assess the likelihood of bankruptcy
12. l. Using a public company’s financial statements to decide whether or not to buy its stock