Exam (elaborations)

Solutions for Horngren's Cost Accounting, A Managerial Emphasis, 10th Canadian Edition by Datar - 2025 Published (All Chapters included)

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Horngren\\\'s Cost Accounting 10ce by Datar

Institution
Bethany College ( )

Complete Solutions Manual for Horngren's Cost Accounting, A Managerial Emphasis, 10th Canadian Edition by Srikant M. Datar, Madhav V. Rajan, Louis Beaubien ; ISBN13: 9780137915927...(Full Chapters included and organized in reverse order from Chapter 23 to 1)...1.The Accountant's Vital Role in Decis...

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Uploaded on December 23, 2024
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Horngren's Cost Accounting, A
Managerial Emphasis, 10th
Canadian Edition by
Srikant M. Datar

Complete Chapter Solutions Manual
are included (Ch 1 to 23)

** Immediate Download
** Swift Response
** All Chapters included

,Table of Contents are given below

1.The Accountant's Vital Role in Decision Making

2.An Introduction to Cost Terms and Purposes

3.Cost–Volume–Profit Analysis

4.Job Costing

5.Activity-Based Costing and Management

6.Master Budget and Responsibility Accounting

7.Flexible Budgets, Variances, and Management Control: I

8.Flexible Budgets, Variances, and Management Control: II

9.Income Effects of Denominator Level on Inventory Valuation

10.Analysis of Cost Behaviour

11.Decision Making and Relevant Information

12.Data Analytic Thinking and Prediction

13.Pricing Decisions: Profitability and Cost Management

14.Strategy, the Balanced Scorecard, and Profitability Analysis

15.Period Cost Application

16.Cost Allocation: Joint Products and Byproducts

17.Revenue and Customer Profitability Analysis

18.Process Costing

19.Spoilage, Rework, and Scrap

20.Inventory Cost Management Strategies

21.Capital Budgeting: Methods of Investment Analysis

22.Transfer Pricing and Multinational Management Control Systems

23.Multinational Performance Measurement and Compensation

,Solutions Manual organized in reverse order, with the last chapter displayed first, to ensure
that all chapters are included in this document. (Complete Chapters included Ch23-1)

CHAPTER 23
MULTINATIONAL PERFORMANCE MEASUREMENT
AND COMPENSATION

SHORT-ANSWER QUESTIONS

23-1 Examples of financial and nonfinancial measures of performance are:
Financial: ROI, residual income, economic value added, and return on sales.
Nonfinancial: Customer perspective: market share, customer satisfaction.
Internal-business-processes perspective: manufacturing lead time, yield,
on-time performance, number of new product launches, and number of
new patents filed.
Learning-and-growth perspective: employee satisfaction, information-
system availability.

23-2 The six steps in designing an accounting-based performance measure are:

1. Choose performance measures that align with top management’s financial goals
2. Choose the time horizon of each performance measure in Step 1
3. Choose a definition of the components in each performance measure in Step 1
4. Choose a measurement alternative for each performance measure in Step 1
5. Choose a target level of performance
6. Choose the timing of feedback

23-3 The DuPont method highlights that ROI is increased by any action that increases return on
sales or investment turnover. ROI increases with

1. increases in revenues,
2. decreases in costs, or
3. decreases in investments, while holding the other two factors constant.

23-4 Yes. Residual income (RI) is not identical to return on investment (ROI). ROI is a
percentage with investment as the denominator of the computation. RI is an absolute monetary
amount which includes an imputed interest charge based on investment.

23-1

, Instructor’s Solutions Manual for Cost Accounting, Tenth Canadian Edition

23-5 Economic value added (EVA) is a specific type of residual income measure that is
calculated as follows:

Economic value =
added (EVA)
After-tax
operating income (
– Weighted-average × Total assets minus
cost of capital current liabilities )
23-6 Definitions of investment used in practice when computing ROI are

1. Total assets available
2. Total assets employed
3. Total assets employed minus current liabilities
4. Shareholders’ equity

23-7 Current cost is the cost of purchasing an asset today identical to the one currently held if
an identical asset can currently be purchased; it is the cost of purchasing an asset that provides
services like the one currently held if an identical asset cannot be purchased. Historical-cost-based
measures of ROI compute the asset base as the original purchase cost of an asset minus any
accumulated depreciation.
Some commentators argue that current cost is oriented to current prices, while historical
cost is past-oriented.

23-8 Special problems arise when evaluating the performance of divisions in multinational
companies because

a. The economic, legal, political, social, and cultural environments differ significantly across
countries.
b. Governments in some countries may impose controls and limit selling prices of products.
c. Availability of materials and skilled labour, as well as costs of materials, labour, and
infrastructure may differ significantly across countries.
d. Divisions operating in different countries keep score of their performance in different
currencies.

23-9 In some cases, the subunit’s performance may not be a good indicator of a manager’s
performance. For example, companies often put the most skillful division manager in charge of
the weakest division in an attempt to improve the performance of the weak division. Such an effort
may yield results in years, not months. The division may continue to perform poorly with respect
to other divisions of the company. But it would be a mistake to conclude from the poor
performance of the division that the manager is performing poorly.
A second example of the distinction between the performance of the manager and the
performance of the subunit is the use of historical cost-based ROIs to evaluate the manager even
though historical cost-based ROIs may be unsatisfactory for evaluating the economic returns
earned by the organization subunit. Historical cost-based ROI can be used to evaluate a manager
by comparing actual results to budgeted historical cost-based ROIs.

23-2

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Exam (elaborations)

Solutions for Horngren's Cost Accounting, A Managerial Emphasis, 10th Canadian Edition by Datar - 2025 Published (All Chapters included)

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