List three quantitative nonfinancial measures of performance in a manufacturing organization of your choice.
> For a university, identify a cost that you think is controllable in the short term and explain why. Identify a cost that you think is controllable in the intermediate term and explain why. Identify a cost that you think is controllable in the long term a
> Some people say that budgets are great for planning but not for control. What do you think they mean? Do you agree with this sentiment? Explain.
> Consider a company that sells prescription drugs. It has salespeople who visit doctors and hospitals to encourage physicians to prescribe its drugs. The company sells to drugstores. Salespeople are evaluated based on the sales in their territories. For e
> An organization plans to make a product in batches of 25,000 units. Planned production is 1,000,000 units, and actual production is 1,125,000 units. What are the planned (master budget) number of batches and the flexible budget number of batches?
> Assembly of product P13 requires one unit of component X, two units of component Y, and three units of component Z. Job J372 produced 220 units of P13. The following information pertains to material variances for this job, analyzed by component: The act
> Each unit of job Y703 has standard requirements of 5 pounds of raw material at a price of $100 per pound and 0.5 hour of direct labor at $12 per hour. To produce 9,000 units of this product, job Y703 actually required 40,000 pounds of the raw material co
> Respond to the following statement: “It is impossible for an organization to focus on the 20 to 30 different measures that result if each of the four Balanced Scorecard perspectives contains between four to eight measures.”
> How do responsibility centers interact?
> Pharout Company uses a standard cost system. Job 822 is for the manufacturing of 500 units of the product P521. The company’s standards for one unit of product P521 are as follows: The job required 2,800 ounces of raw material costing
> The following information is available for Mandalay Company: Required (a) Determine the material price variance based on the quantity of materials purchased. (b) Determine the material quantity variance. (c) Determine the direct labor rate variance. (d)
> A university faced with a deficit reacts by cutting resource allocations to all faculties and departments by 8%. Do you think this is a good approach to budgeting? Why or why not?
> Sensitivity analysis is an important component of any budgeting exercise. Which estimates do you think will be most crucial in developing a master budget? Why?
> Jeren Company is considering replacing its existing cutting machine with a new machine that will help reduce its defect rate. Relevant information for the two machines includes the following: Required (a) Determine the sales level, in number of units, a
> Glynn Company is preparing a budget to determine the amount of part G12 to produce for the first quarter of the year, and the amount of resin to purchase for part G12. The company desires to have 25% of the next month’s estimated sales of G12 in inventor
> Boynton Company sells a variety of recycling bins. The company estimates that it will sell 40,000 units of bin BLX in April. The company expects to have 6,000 units of BLX in inventory on April 1 and would like 5,000 units of BLX in inventory on April 30
> Budgeting allows an organization to compare its projected operating and financial results with those of competitors as a general test of the efficiency of the organization’s operating processes. Explain how this might be valuable for a machine shop that
> Monthly cash budgets of inflows and outflows are an important part of the budgeting process in most organizations. In the course of preparing a cash budget, the organization must estimate its cash inflows from credit sales. Suppose that in response to pr
> Budgeting allows an organization to identify potential problems so that plans can be developed to avoid these problems or to deal with them systematically. Give an example of how budgeting might serve this role in a company that buys vegetables and cans
> Discuss the accuracy of the following statement: “The Balanced Scorecard approach is incomplete because it does not include measures on environmental performance and measures of employee health and safety.”
> Budgeting allows an organization to identify broad resource requirements so that it can develop plans to put needed resources in place. Use an example to illustrate why this might be valuable in a consulting company that provides advice to clients.
> Steelmax, Inc., sells office furniture in the Chicago metropolitan area. To better serve its business customers, Steelmax recently introduced a new same-day service. Any order placed before 2:00 P.M. is delivered the same day. Steelmax hires five workers
> The following budget information for the year ending December 31, 2011, pertains to Rust Manufacturing Company’s operations: The following information is also provided: 1. Rust has no beginning inventory. Production is planned so that
> Nate Young is the dean of a business school. The university is under strong financial pressures, and the university president has asked all the deans to cut costs. Nate is wondering how he should respond to this request. The university receives its opera
> Peterborough Food produces a wide range of breakfast cereal foods. Its granola products are two of its most important product lines. Because of the complexity of the granola production process, the manufacturing area in the plant that makes these two pro
> Judd’s Reproductions makes reproductions of antique tables and chairs and sells them through three sales outlets. The product line consists of two styles of chairs, two styles of tables, and three styles of cabinets. Although customers often ask Judd Mol
> List three quantitative financial measures of performance in a service organization of your choice.
> List three quantitative financial measures of performance in a manufacturing organization of your choice.
> What is goal congruence?
> What are the three key dimensions of motivation?
> Balanced Scorecard objectives, cause-and-effect linkages for different value propositions Required (a) Use the objectives below to develop appropriate cause-and-effect linkages across the Balanced Scorecard’s four perspectives for the low-total-cost va
> What two broad technical considerations must designers of management and control systems address?
> What does control refer to in the context of a management accounting and control system?
> What is a stock option plan?
> What is gain sharing?
> What is profit sharing?
> What is a cash bonus?
> What type of organization is best suited to incentive compensation? Why?
> What is incentive compensation?
> What is an extrinsic reward?
> What is an intrinsic reward?
> Refer to the University of Leeds’ strategy map at http://www.leeds.ac.uk/downloads/Strategy_map_aw.pdf Required (a) What is the strategy for the university? (b) What will make it distinctive or unique? (c) What are its advantages and scope? (d) What
> What is budget slack?
> What is a stretch target?
> What is the most motivating type of budget with respect to targets?
> What are two essential elements in employee empowerment in MACS design?
> What is the single most important factor in making major changes to an organization?
> What is data falsification?
> What is meant by gaming a performance indicator?
> List three qualitative measures of performance.
> What are some choices that individuals can make when ethical conflicts arise?
> Either by visiting a website or from a description in a published article, find a description of the implementation of a Balanced Scorecard. Required (a) Document in detail the elements (objectives, measures, and targets) of the Balanced Scorecard. (b)
> What is the human resources model view of motivation?
> What is the human relations movement view of motivation?
> What is the scientific management view of motivation?
> What are the four major behavioral considerations in MACS design?
> What four components should MACS designers consider when addressing the relevance of the system’s information?
> What are the four stages involved in keeping an organization in control?
> What are the six attributes of effective performance measurement systems?
> What are the three most common methods of setting a budget?
> What are the two interrelated behavioral issues in budgeting?
> What is an example of earnings management or smoothing?
> In the mid-1990s, Mobil Corporation’s Marketing and Refining (M&R) division underwent a major reorganization and developed new strategic directions. In conjunction with these changes, M&R developed a Balanced Scorecard around fo
> List three quantitative nonfinancial measures of performance in a service organization of your choice.
> List and explain the two categories in task control.
> How does task control differ from results control?
> How do diagnostic control systems differ from interactive control systems?
> What is an ethical control system, and what are its key elements?
> Megan Espanoza, manager of the Wells Division of Mars, Inc., a large credit card company, recently received a memorandum describing the company’s new budgeting process for the coming year. The new process requires Megan and the other division managers to
> Explain how participating in decision making and being educated to understand information received in an organization contribute toward employee empowerment in MACS design.
> Suppose that you are the manager of a production facility in a business that makes plastic items that organizations use for advertising. The customer chooses the color and quantity of the item and specifies what is to be imprinted on the item. Your job i
> Under what circumstances should both quantitative and qualitative performance measures be used to evaluate employee, work group, and divisional performance? Provide examples to support your answer.
> Cite two settings or jobs where each of the following approaches to control would be appropriately applied. Identify what you feel is the definitive characteristic of the setting that indicates the appropriateness of the approach to control that you have
> Domestic Auto Parts (DAP), a $1 billion subsidiary of a U.S. auto parts manufacturing company, manufactured and marketed original and after-market parts for automobile producers in the United States. It distributed products directly to original equipment
> You are a management accountant working in the controller’s office. Rick Koch, a very powerful executive, approaches you in the parking lot and asks you to do him a favor. The favor involves falsifying some of his division’s records on the main computer.
> During data collection for the transition from an old management accounting system to a new activity-based cost management system, you see a manager’s reported time allotments. You know that the data supplied by the manager are completely false. You conf
> Suppose you are the chief executive officer of a manufacturing firm that is bidding on a government contract. In this situation, the firm with the lowest bid will win the contract. Your firm has completed developing its bid and is ready to submit it to t
> Refer to “Does Cheating at Golf Lead to Cheating in Business?” in the In Practice box on page 347. Discuss reasons why individuals might feel justified in cheating at golf and whether individuals who cheat at golf are likely also to cheat in business.
> List the four key behavioral considerations in MACS design and explain the importance or benefits of each.
> Explain why an understanding of human motivation is essential to MACS design.
> Four broad approaches to distributing the proceeds of a bonus pool in a profit-sharing plan are listed here: 1. Each person’s share is based on salary. 2. Each person receives an equal share. 3. Each person’s share is based on position in the organizatio
> Marie Johnston, the manager of a government unemployment insurance office, is paid a salary that reflects the number of people she supervises and the number of hours that her subordinates work. Required (a) What do you think of this compensation scheme?
> Belleville Fashions sells high-quality women’s, men’s, and children’s clothing. The store employs a sales staff of 11 full-time employees and 12 part-time employees. Until recently, all sales staff were paid a flat salary and participated in a profit-sha
> Beau Monde, Inc., a manufacturer and distributor of health and beauty products, made the following disclosure about its compensation program: Our compensation philosophy is based on two simple principles: (1) We pay for performance and (2) management ca
> Chadwick, Inc.: The Balanced Scorecard (Abridged)14 The “Balanced Scorecard”15 article seemed to address the concerns of several division managers who felt that the company was over-emphasizing short-term financial res
> Denver Jack’s is a large toy manufacturer. The company has 100 highly trained and skilled employees who are involved with six major product lines, including the production of toy soldiers, dolls, and so on. Each product line is manufactured in a differen
> During the late 1970s, Harley-Davidson, the motorcycle manufacturer, was losing money and was very close to bankruptcy. Management believed that one of the problems was low productivity and, as a result, asked middle managers to speed up production. The
> Knox Company manufactures consumer products such as cleansers, air fresheners, and detergents. During a recent quarter, the value of the products made was $50 million, and the labor costs were $3 million. The company has decided to use a Scanlon plan wit
> Sakura Snack Company manufactures a line of snack foods, such as cheese crackers, granola bars, and cookies. The production workers are part of a gain-sharing program that works as follows: A target level of labor costs is set that is based on the achiev
> Peterborough Medical Devices makes devices and equipment that it sells to hospitals. The organization has a profit-sharing plan that is worded as follows: The company will make available a profit-sharing pool that will be the lower of the following two
> Hoechst Celanese, a pharmaceutical manufacturer, has used a profit-sharing plan, the Hoechst Celanese Performance Sharing Plan, to motivate employees. To operationalize the plan, the Hoechst Celanese executive committee set a target earnings from operati
> DMT Biotech is a biotechnology research and development company that designs products for the needs of life science researchers. The company consists of an administrative unit, a research laboratory, and a facility used to develop prototypes of and produ
> Suppose that you are the owner/manager of a house-cleaning business. You have 30 employees who work in teams of three. Teams are dispatched to the homes of customers where they are directed by the customer to undertake specific cleaning tasks that vary w
> Answer the following two questions about the organization units listed below: • What behavior should be rewarded? • What is an appropriate incentive compensation system? a. A symphony orchestra b. A government welfare office c. An airline complaint desk
> What are some pros and cons of tying an individual’s pay to performance?
> Wells Fargo’s web page (https://www .wellsfargo.com/pdf/invest_relations/VisionandValues04.pdf) states that the company’s vision is “to satisfy all our customers’ financial needs and help them succeed financially.” The brochure also describes the follow
> Mike Shields was having dinner with one of his friends at a restaurant in Memphis. His friend, Woody Brooks, a local manager of an express mail service, told Mike that he consistently overstated the amount of resources needed in his budget requests for h
> Manoil Electronics manufactures and sells electronic components to electronics stores. The controller is preparing her annual budget and has asked the sales group to prepare sales estimates. All members of the sales force have been asked to estimate sale
> Budgets are usually set through one of three methods: participation, authority, or consultation. Required Write an essay stating the circumstances under which each method is most appropriate. If you disagree with a particular method, justify your answer
> Why is it important that people understand what performance is measured, how performance is measured, and how employee rewards relate to measured performance?
> When should an organization use profit sharing?
