Posted: April 20th, 2021
1-26: For each of the following items, identify which of the management accounting guidelines applies: cost-benefit approach, behavioral and technical consideration, or different costs for different purposes.
1: Analyzing whether to keep the billing function within an organization or outsource it.
2: 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.
3: 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.
4: Consider the desirability of hiring one more sales person.
5: Giving each salesperson the compensation option of choosing either a low salary or a high percentage sales commission.
6: Selecting the costlier computer system after considering two systems.
7: Installing a participatory budgeting system in which managers set their own performance targets, instead of top management imposing performance targets on managers.
8: 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 purposes.
9: Introducing a profit sharing plan for employees.
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