Solutions for Management Accounting in a Dynamic Environment, 1st Edition McWatters (All Chapters included)
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Course
Managerial Accounting
Institution
Managerial Accounting
Complete Solutions Manual for Management Accounting in a Dynamic Environment, 1st Edition by Cheryl S. McWatters, Jerold L. Zimmerman ; ISBN13: 9780415839020. (Full Chapters included Chapter 1 to 14)....
1. Why Accounting is Important in Organizations 2. Cost Behavior and Activity Costs 3. Measuri...
Management Accounting in a
Dynamic Environment
1st Edition by Cheryl S. McWatters
Complete Chapter Solutions Manual
are included (Ch 1 to 14)
** Immediate Download
** Swift Response
** All Chapters included
** Cases solutions included
** Exercises and Problems
** Teaching Notes to Cases
,Solutions for Chapter 1
Why Accounting is Important in
Organizations
Analysis and Interpretation Problems
AIP 1.1 Using Accounting for Making Planning Decisions (10 minutes)
a. Historical costs are not as useful in making planning decisions when the environment is
changing rapidly. With changing products, processes, and prices, the historical cost is
not a good approximation of the current value of a resource.
Historical costs, however, may be useful for control purposes. Historical costs provide
information about the activities of managers and can be used as performance measures
to evaluate managers.
b. The purpose of accounting systems is to provide information for planning purposes and
control. Historical costs are not generally appropriate for planning purposes.
Alternatively, additional measures are costly to implement. An accounting system
should include additional measures if the benefits of improved decision making are
greater than the costs of the additional information.
AIP 1.2 Goals of a Corporation (15 minutes)
Finance and economics textbooks traditionally state that the goal of a profit organization is the
maximization of shareholder wealth. Managers are frequently presumed to act in the best
interest of the shareholder, although recent finance literature recognizes that appropriate
incentives are necessary to align manager interests with shareholder interests. The goal,
however, remains the same: to maximize shareholder wealth. Finance textbooks, however, are
not very clear on how maximizing shareholder wealth is achieved. Most finance textbooks focus
on financing decisions and not on the use of assets and dealing with customers.
, Marketing’s goal of satisfying customers recognizes that customers are the source of revenues
for the organization. Customers are the means through which shareholder value is increased.
Customer satisfaction as the sole goal of the organization, however, does not recognize the
need to satisfy other stakeholders in the organization, including the shareholders. Customers
will be very satisfied if you give them products free of charge, but that won’t increase
shareholder wealth.
In summary, achieving customer value is necessary to create shareholder wealth, but is not
sufficient.
AIP 1.3 Accounting and Control (15 minutes)
a. Two possible roles exist for the monthly report: facilitating planning decisions and
control. Monthly reports provide more timely information than annual reports. With
monthly reports, the president can identify problem areas more quickly and make
corrective actions. The president also may use the monthly reports to evaluate the work
of his administrators. The monthly reports provide information about whether
managers are performing well or poorly.
b. If the president of the university is not too familiar with accounting numbers, the
finance director must adapt the monthly report to make it more understandable. She
may even want to highlight areas in the report that might need attention.
AIP 1.4 Control and Internal Auditors (15 minutes)
a. Internal auditors serve multiple roles. One role is to assist the decentralized managers in
following directives from central administration. The internal auditors are also often
used to evaluate the performances of the managers. If internal auditors are viewed as
performance evaluators, managers will be very careful in how they interact with the
internal auditors and how much information to release.
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