1.
Planning and Control Decision:
Planning decisions involves selecting organization goals, estimating results under different alternative ways to attain those goals, and deciding how to achieve the expected goals. It involves communicating the goals and how to attain them to the entire firm.
Control decisions involve taking actions to implement planning decisions, and deciding on how to evaluate performance and providing feedback and learning to improve future decision making.
To state: Whether the firm is following a cost leadership or a product differentiation strategy for each firm.
2.
To provide: The information the
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Chapter 1 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
- Coulson and Company is a large retail business that has a firm-wide balanced scorecard. Recently, management has discussed the need for the balanced scorecard to be more relevant to each individual department of the company. Specifically, management wants to come up with unique scorecards for its Public Relations and Inventory Management departments. For both departments, management recognizes that properly and efficiently training employees is important. For these purposes, management gathers data on the median training hours per employee and new employee performance review ratings. For the Inventory Management Department, management is focused on reducing stockouts (running out of certain inventory items) and keeping accurate inventory counts. For these purposes, the company tracks the number of back orders and discrepancies between the physical and record counts of inventory, respectively. For the Public Relations Department, management is focused on improving the publics CSR image of the company and attracting new customers. Management measures these objectives using Forbes CSR Rating of Coulson and Company and the number of new customers, respectively. a. Identify the term for Coulson and Companys plan to create unique balanced scorecards for its individual departments. b. Draw the unique balanced scorecards of each department. Identify the departments common and unique measures, and include all the elements of the balanced scorecard that you can in your drawings, given the information provided.arrow_forwardThe following strategic objectives have been derived from a strategy that seeks to improve asset utilization by more careful development and use of its human assets and internal processes: a. Increase revenue from new products. b. Increase implementation of employee suggestions. c. Decrease operating expenses. d. Decrease cycle time for the development of new products. e. Decrease rework. f. Increase employee morale. g. Increase customer satisfaction. h. Increase access of key employees to customer and product information. i. Increase customer acquisition. j. Increase return on investment (ROI). k. Increase employee productivity. l. Decrease the collection period for accounts receivable. m. Increase employee skills. The heart of the strategy is developing the companys human resources. Management is convinced that empowering employees will lead to an increase in economic returns. Studies have shown that there is a positive relationship between employee morale and customer satisfaction. Furthermore, the more satisfied customers pay their bills more quickly. It was hypothesized that as employees became more involved and more productive, their morale would improve. Thus, the strategy incorporated key objectives that would lead to an increase in productivity and involvement. Required: 1. Classify the objectives by perspective, and suggest a measure for each objective. 2. Prepare a strategy map that illustrates the likely causal relationships among the strategic objectives.arrow_forwardConsider the following quality improvement strategy as expressed by a series of if-then statements: If real-time feedback information capabilities improve, then post-sales service time will improve. If post-sales service time improves, then post-sales service quality will increase. If post-sales service quality increases, then customer satisfaction will increase. If customer satisfaction increases, then market share will increase. If market share increases, then sales will increase. If sales increase, then profits will increase. Required: 1. Prepare a strategy map that shows the cause-and-effect relationships of the quality improvement strategy (see Exhibit 13.10 for an illustrative example). 2. Explain how the quality improvement strategy can be tested.arrow_forward
- Coral Creations has strategic plans that call for rapid growth, a limited number of units for each design to enhance exclusivity, designs for the perfect fit, on-time delivery to customers, retention of highly trained employees with innovative skills, and excellent inventory control. A. Suggest one performance measure for each dimension of the balanced scorecard for Coral Creations. B. Take one of your measures and discuss the linkage it has to multiple strategies in Corals plan.arrow_forwardIn The Trouble with Outsourcing, a Schumpeter column in The Economist, there is a statement of advice to companies, who outsource products or services: they need to think harder about what is their core business, and what is peripheral. What types of problems do you think they are talking about? In your answer, present at least five (5) problems that companies should consider when outsourcing products or services.arrow_forwardRequirement 2. For each decision, select what information the management accountant can provide about the source of competitive advantage for these firms. a. For a running shoe manufacturer's decision of whether to purchase leather from a cheaper supplier, management accountants can provide the following information: (Complete all input fields.) b. For an office supply store's decision of whether to a delivery service that its competitors do not have, management accountants can provide the following information: (Complete all input fields.) c. For a regional retailer's decision of whether to install self-check-out counters, management accountants can provide the following information: (Complete all input fields.) d. For a local florist's decision of whether to hire a horticulture specialist to help customers with gardening questions, management accountants can…arrow_forward
- Duncan’s Pizzas is a chain of pizza stores. Pizzas are made fresh in-store, and then delivered tocustomers by a fleet of drivers. The senior management team has identified the strategic priorities forthe business as on-time delivery and product quality. Question: If the company is successful in achieving challenging targets for these performance measures, willit also necessarily achieve high profitability? Explain your answer.arrow_forwardIdentify the major problems in this situation and explain how they impact the organization. You will need to consider both behavioral and analytical factors. Specifically, how might managerial accounting concepts, tools, or techniques be applied to help resolve this dilemma? What are possible consequences of applying the same to this dilemma? Briefly explain Orange Electronics has been experiencing declining profit margins and has been looking for ways to increase operating income. It cannot raise selling prices for fear of losing business to its competitors. It must either cut costs or improve productivity. The company uses a standard cost system to evaluate the performance of the soldering department. It investigates all unfavorable variances at the end of the month. The soldering department rarely completes the operations in less time than the standard allows (which would result in a favorable variance). In most months, the variance is zero or slightly unfavorable. Reasoning that…arrow_forwardCarlton's Pizzas is a chain of pizza stores. Pizzas are made fresh in-store, and then delivered to customers by a fleet of drivers. The senior management team has identified the strategic priorities for the business as on-time delivery and product quality. i) If the company is successful in achieving challenging targets for these performance measures, will it also necessarily achieve high profitability? And For each of the strategic priorities, suggest three performance measures.arrow_forward
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