Managerial Accounting Ch. 1 HW – Flashcards

1. SEC examiner - *Financial accounting Information* 2. Bookkeeping Department - *Financial accounting Information* 3. Division controller - *Both financial and managerial accounting information* 4. External auditor (public accounting firm) - *Financial accounting Information* 5. Loan officer at the company's bank - *Financial accounting Information* 6. State tax agency auditor - *Financial accounting Information* 7. Board of director - *Both financial and managerial accounting information* 8. Manager of the Service Department - *Managerial accounting information* 9. Wall Street Analyst - *Financial accounting Information* 10. Internal auditor - *Both financial and managerial accounting information* 11. Potential investors - *Financial accounting Information* 12. Current stockholders - *Financial accounting Information* 13. Reporter from the Wall Street Journal - *Financial accounting Information* 14. Regional division managers - *Managerial accounting Information*

*Responsibility/Standard* 1. Maintain an appropriate level of professional expertise by continually developing knowledge and skills *-Competence* 2. Recognize and communicate professional limitations that would preclude responsible judgement or successful performance of an activity *-Competence* 3. Disclose all relevant information that could reasonably be expected to influence an intended user's understanding of the reports, analyses, or recommendations. *-Credibility* 4. Disclose delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law. *-Credibility* 5. Perform professional duties in accordance with relevant laws, regulations, and technical standards. *Competence* 6. Abstain from engaging in or supporting any activity that might discredit the profession. - *Integrity* 7. Refrain from engaging in any conduct that would prejudice carrying out duties ethically. - *Integrity* 8. Provide decision support information and recommendations that are accurate, clear, concise, and timely. - *-Competence* 9. Keep information confidential except when disclosure is authorized or legally required. *-Confidentiality* 10. Communicate information fairly and objectively. *-Credibility* 11. Refrain from using confidential information for unethical or illegal advantage. *-Confidentiality* 12. Inform all relevant parties regarding the appropriate use of confidential information. Monitor subordinate's activities to ensure compliance. *-Confidentiality* 13. Mitigate actual conflicts of interest. Regularly communicate with business associates to avoid apparent conflicts of interest. Advise all parties of any p-otential conflicts. *-Integrity*

*Requirement 1.* What are the total costs of adopting lean production? The total costs of adopting lean production are *$91850* ($45,100+$38,000+$8,750)=$91,850 *Requirement 2.* What are the total benefits of adopting lean production? The total benefits of adopting lean production are *$145000.* ($98,000+$47,0000)=$145,000 *Requirement 3.* Should Ditoro adopt lean poduction? Why or Why not? Ditoro *should* adopt lean production because the expected benefits *are greater than* the costs

Begin by choosing the appropriate decision/action for the Planning Stage of management. *Planning* *Sales* ->Increase sales. *Repairs*-> Increase volume of repairs *Customization* -> Increase number of custom systems built *Web Development* -> Increase web traffic *Accounting* -> Implement ERP system to monitor department activities and record finances. *Human Resource* -> Decrease employee turnover. Next, select the appropriate decisions/actions for the Directing stage of management. *Directing* *Sales* -Examine sales reports -Setting competitive prices. *Repairs* -Set competitive prices; generate reports showing time used for each type of repair. -Streamline process to save time. *Customization* -Find out what customers want and need. -Observe competitors for prices and customizations offered. -Improve employee certification and offer higher-quality parts. *Web Development* -Improve design of website. -Offer more products online. -Increase marketing efforts. -Make shopping easier and more intuitive *Accounting* -Find potential flaws in the system and fix before implementation. -Train employees on new system. *Human Resources* -Give feedback to employees. -Hire employees that are "a good fit" for the company. -Raise employee morale' set clear job descriptions. Finally, select the appropriate decisions/activities for the Controlling stage of management. *Controlling* *Sales* -Monitor sales numbers and prices from different products and locations over time. -Investigate variances. *Repairs* -Track total numbers of repairs. See if more repairs are being made and if time is utilized efficiently. *Customization* -Examine number of computer systems built per type (multimedia, gaming, etc) *Web Development* -Monitor web traffic by having an online counting device. -Look at sales numbers to see if people are just surfing or actually buying merchandise. *Accounting* -Double check entries to ensure system is working properly. -Track employee work schedules to stay on time. *Human Resources* -Interview employees to determine potential problems with the workplace -Monitor both involuntary and voluntary turnover. *Requirement 2.* For each of the decisions/actions you chose in Part 1, identify what information is needed for that decision/action. Specify whether that information would be generated by the financial accounting system or the managerial accounting system at TechnoGeek. Begin with the decisions at the Planning stage of management. *Planning* *Sales* -Haas would need a sales budget for the entire company and each individual product at each location *Repairs* -Labor budgets used to determine if hiring more repair staff would be feasible -Labor budgets used to determine the time taken to repair computers. *Customization* -Market analysis to determne which computers potential customers want. -Budgets for types of computers offered, time needed per job. *Web Development* -A budget would be needded to set web traffic goals. -Haas would need an expense budget to ensure money is spent efficiently *Accounting* -Haas would need time budgets as well as expense budgets *Human Resources* -Employee satisfaction surveys and feedback reports. Next identify what information is needed for the decision/action at the Directing stage of management. *Directing* *Sales* -Analyze sales reports to monitor type and amount of sales made. -Prices would be analyzed using these reports and market anlysis of Haas' competitors *Repairs* -Monitor time taken per repair for each member of repair staff. -Employee training programs would be used. *Customization* -Analyze market analysis to determine market needs and proper pricing schemes. -Research quality of available parts. -Ensure customer satisfaction by hiring qualified staff. *Web Development* -Monitor department expenses and website visits using online counting program. *Accounting* -Train employees on new system to keep within time budget *Human Resources* -Active relationship between management and employees. -Management would record needs and suggestions made by employees in feedback system. Identify what information is needed for the decision/action at the Controlling stage of management. *Controlling* *Sales* -Change prices if deemed appropriate. -Investigate variances and make changes as needed. -Compare budgets with actual results. *Repairs* -Compare budgets with actual results. -Investigate variances and make changes as needed. *Customizations* -Compare budgets with actual results. -Use customer feedback to improve custom builds. -Make changes if needed. *Web Development* -Compare budgeted expenses with actual and compare expected web traffic with actual. -Investigate variances and make changes as needed. *Accounting* -Investigate variances and make changes as needed. -Compare budgets with actual results. *Human Resources* -Consider employee suggestions. -Make changes if needed. Specify whether the information above would be generated by the financial accounting system or the managerial accounting system at TechnoGeek. The *managerial* accounting system will be used to gather, summarize and report data above.

Expected benefits *$1,360,000* Expected costs *$1,130,000* Net Benefits (Costs) *$230,000* *Expected Costs=($745,000+$155,000+230,000)=$1,130,000 Recommend to Flores whether Mid-West Gas should proceed with the internet-based ordering system. Since the expected value of the benefits *are greater than* the total costs, Mid-West *should* proceed with the Internet-based system.

*Requirement1.* Compute the expected benefits of the Internet-based ordering system. The expected benefits of the Internet-based ordering system are *$933,000.* *Requirement 2.* Would you recommend that Star Gas accept the proposal? Complete the cost-benefit analysis below to compute the expected (costs) of the project. Expected benefits *$933,000* Expected costs *$1,140,000* Net Benefits (costs) *$(207,000)* Expected Costs:($745,000+$165,000+$230,000)=$1,140,000 Because the *costs exceed the benefits*, a cost-benefit analysis *does not justify* proceeding with the Internet-based system. *Requirement 3.* Before Bardeen makes a final decision, what other factors should she consider? *-Electronic order processing should reduce human errors, and therefore decrease costs.* *-Employee layoffs may hurt morale and efficiency, thus increasing costs.* *The difficulty and cost of laying off employees may reduce the expected benefits.* *-Providing dealers with current information could help Star Gas reduce its inventory levels.*