Question: Think of any setting in need of

> 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?

> Why should performance measurement systems and rewards focus on performance that employees can control?

> What distinguishes data falsification from gaming activities?

> Can goal congruence be increased if rewards are tied to performance? Explain.

> In a company that takes telephone orders from customers for general merchandise, explain how you would evaluate the performance of the company president, a middle manager who designs the system to coordinate order taking and order shipping, and an employ

> The City of Charlotte, North Carolina, states its vision and mission as follows:12 City Vision The City of Charlotte will be a model of excellence that puts citizens first. Skilled, diverse, and motivated employees will be known for providing quality and

> What should a person do if the organization’s stated values conflict with practiced values? What are the individual’s choices? Why do you think such conflicts exist?

> What should a person do if faced with a conflict between his or her values and those of the organization?

> List and describe the hierarchy of ethical considerations.

> How do the scientific management, human relations, and human resource schools differ in their views on human motivation?

> Identify the four components that MACS designers should consider when addressing the relevance of the system’s information and explain why each component is important.

> Eni Corporation’s mission statement includes the following: “Our mission is to continuously improve the company’s value to shareholders, customers, employees, and society.” Interpret how each of Eni Corporation’s stakeholder groups may interpret “the com

> How would you reward a group of people that includes product designers, engineers, production personnel, purchasing agents, marketing staff, and accountants whose job is to identify and develop a new car? How would you reward a person whose job is to dis

> When should an organization use stock options?

> When should an organization use gain sharing?

> Why do a company’s operators/workers, managers, and executives have different informational needs than shareholders and external suppliers of capital?

> What does the controllability principle require?

> When should an organization use a cash bonus?

> You work for a consulting firm and have been given the assignment of deciding whether a particular company president is overpaid both in absolute terms and relative to presidents of comparable companies. How would you undertake this task?

> Explain when one would reward outcomes or outputs, reward inputs, or use knowledge-based pay.

> Do you believe that people value intrinsic rewards? Give an example of an intrinsic reward that you would value and explain why. Why are extrinsic rewards important to people? If you value only extrinsic rewards, explain why.

> What are budgeting games, and why do employees engage in them?

> What are the pros and cons of building slack into the budget from (1) The point of view of the employee building in slack and (2) From a senior manager’s point of view?

> How does participation in the budgeting process differ from consultation?

> What are the advantages for the individual in being able to participate in decision making in the organization, and what are the advantages for the organization in allowing the individual to participate in decision making?

> Can you think of instances when gaming behavior is appropriate in an organization?

> List some methods of gaming performance indicators.

> What is management accounting?

> In December 2002, Time magazine named Cynthia Cooper, Coleen Rowley, and Sherron Watkins as its Persons of the Year. Cynthia Cooper was vice president of internal audit for WorldCom and informed the firm’s audit committee that the firm had improperly tre

> Chow Company is an insurance company in Hong Kong. Chow hires 55 people to process insurance claims. The volume of claims is extremely high, and all claims examiners are kept extremely busy. The number of claims in which errors are made runs about 10%. I

> Frits Seegers, President of Citibank California, was meeting with his management team to review the performance evaluation and bonus decisions for the California branch managers. James McGaran’s performance evaluation was next. Frits felt uneasy about th

> What is a quality function deployment matrix, and how does it relate to value index computations for target costing?

> What is target costing?

> What three substages typically occur in the postsale service and disposal stage of total life- cycle costing?

> What are the three substages of the RD&E stage of total-life-cycle costing?

> What is the difference between committed costs and incurred costs?

> What are the three major stages of the total life- cycle costing approach in a manufacturing situation?

> What is the total-life-cycle costing approach? Why is it important?

> What activities are included in environmental costing?

> What are some examples of explicit and implicit environmental costs?

> What are some nonfinancial measures that a company might use in order to motivate achieving the objective of reducing product development cycle time across an array of products?

> What are some nonfinancial measures that a company might use in order to motivate achieving the objective of anticipating future customer needs?

> Explain why using percentage of revenues from new products as a performance metric may fail to stimulate the creation of highly innovative products.

> What desirable behavioral consequences are likely as people focus on improving the BET metric?

> What three critical elements does the BET metric bring together?

> What roles do cross-functional teams and supply chain management play in target costing?

> What is value engineering?

> Pierre LeBlanc, manager of Centaur Corporation, is thinking about implementing a target costing system in his organization. Several managers have taken him aside and have expressed concerns about implementing target costing in their organization. Requir

> Stacy Yoo, president of Caremore, Inc., an appliance manufacturer in Seattle, Washington, has been trying to decide whether one of her product-line managers, Bill Mann, has been achieving the companywide return-on-sales target of 45%. Stacy has just rece

> Briefly explain each of the four steps of the plan–do–check–act cycle.

> Calcutron Company is contemplating introducing a new type of calculator to complement its existing line of scientific calculators. The target price of the calculator is $75; annual sales volume of the new calculator is expected to be 500,000 units. Calcu

> Gregoire Grant is a traditional manufacturing manager who is concerned only with managing costs over the manufacturing cycle of the product. He argues that since traditional accounting methods are focused on this cycle, he should not bother with the RD&E

> Consider the following situation: Your manager comes to you and says, “I don’t understand why everyone is talking about the total-life-cycle costing approach to product costing. As far as I am concerned, this new approach is a waste of time and energy. I

> Amajor car manufacturer developed the following information as part of its target costing efforts: Required (a) Prepare an exhibit similar to Exhibit 8-9 showing percentage contributions of each function group to categories of customer requirements. (b

> Imagine that you are the manager of a large bank. Having heard about a management accounting method called target costing, you are wondering whether it can be applied to the banking industry. In particular, you are trying to determine how to benchmark ot

> According to this chapter, the target costing and traditional cost reduction methods approach the relationships among cost, selling price, and profit margin quite differently. Required Write an essay that illustrates how the target costing and tradition

> As a manager interested in implementing target costing, you are contemplating three approaches. The first is to bring in an outside consultant; the second is to develop your own system inside your organization with little to no outside assistance; and th