Management accounting guidelines. 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 an additional 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 purposes. Introducing a profit-sharing plan for employees.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 1EB: Assume you have been hired by Cabelas Sporting Goods. As part of your new role in the accounting...

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Management accounting guidelines. 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 an additional 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 purposes.
Introducing a profit-sharing plan for employees.

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