Question: What are the arguments for reward systems

> Georgina Chan is the chief financial officer of Colorado Pty Ltd, which has three interdependent divisions where, on average, about 30 per cent of the output of one division is transferred to one of the other divisions. She is currently dealing with a di

> The following information relates to a new computer chip that Hand Held has developed for its new mobile phone that contains a personal organiser: The variable costs of the mobile phone division will be incurred whether it buys from the chip division o

> The Enviro division of Solar Sun produces electric motors, 20 per cent of which are sold to the Energy Plus division of Solar Sun and the remainder to outside customers. Solar Sun treats its divisions as profit centres and allows division managers to cho

> Fowler Electronics produces colour plasma screens in its Bien Hoa plant in Vietnam. The screens are then shipped to the entity’s plant in Sturt, South Australia, where they are incorporated into finished televisions. Although the Bien Hoa plant never sel

> In competitive markets such as the game console industry, how might management respond to techniques such as life cycle costing?

> Refer to the information in Problem 18.21. The manager of Sandy Point Construction is considering a new project. She can buy or lease equipment that will reprocess tailings from old mines to remove any traces of gold left behind by the original separatin

> The following financial data are for the evaluation of performance for Sandy Point Construction: Sandy Point Construction currently uses return on investment to evaluate investment centre managers. An accounting intern from the local university suggest

> Senior management at Harriot Industries, an Italian-based fashion house and cosmetics company, have been engaged in a debate around the best key financial measure relevant to evaluate the performance of senior executives and divisional managers. Currentl

> Following is information for the Fulcrum Company’s three business segments located in Europe. Fulcrum’s applicable tax rate for the segments is 30 per cent, and its weighted average cost of capital for each segment i

> Mirror Industries laminating division, BrightShine, incurred the following costs and expenses in the last period. During the period, BrightShine produced 300 000 units of industrial photo prints, which were sold for $2 each. Mirrorsâ&

> The following selected data pertain to Garfield Landscaping for last year. Required (a) Calculate the residual income. (b) Calculate the return on investment. (c) Calculate the economic value added.

> A senior nurse manager working in an endoscopy clinic in the northern suburbs of Melbourne is contemplating issues that have surfaced with the purchase of a new endoscope (colonoscope) used to investigate intestinal problems. This valuable medical equipm

> Livermore Components is a supplier of drive shafts to the motor vehicle industry. Currently it supplies two of the large car manufacturers in Australia and is also highly ranked in a tender bid to supply drive shafts to a Malaysian car manufacturer. Much

> Suppose that the director of lost dogs’ home is concerned about an increase in number of adopted dogs returned to the home because of behaviour problems. When dogs are returned, the home incurs extra animal intake and adoption costs, in addition to extra

> New-Rage Cosmetics uses a traditional cost accounting system to allocate quality control costs uniformly to all products at a rate of 14.5 per cent of direct labour cost. Monthly direct labour cost for Satin Sheen makeup is $27 500. In an att

> How can the principles of target costing assist with the decision to invest or continue to invest in the game console market?

> Big Bertram uses the just-in-time method to manufacture golf clubs. The manufacturing schedule for the clubs is developed as customers place orders. Each club is made within a cell where five workers have production stations. The raw materials are delive

> During its second year of operations, Grilling Machines, an entity that manufactures and sells electric tabletop grills, produced 275 000 units and sold 250 000 units at $60 per unit. The beginning inventory balance was 5000 units. No changes in fixed or

> As introduced in chapter 10, Paisley Insurance Company provides a range of insurance products to residential and commercial customers. Figure 17.16 shows the process map of Paisley’s billing department activities. The following four k

> Synergy Clothing (Synergy) began operations as a clothing manufacturer in the 1940s. It has grown from a small firm into a multi-divisional diversified clothing company with three key divisions: Fashion, which focuses on shirts and jeans; Uniforms which

> Paige Maddern owns and operates Paige Nightwear (PN), an internet-based company specialising in high-quality nightwear for men and women. From the outset, Paige has had a number of key principles in mind which guide most of the business decisions and ope

> Elimination of waste to maximise customer value is at the core of the lean approach. Required Search online to find two organisations that have adopted a lean approach to operations. Identify the objective that led to the adoption of lean thinking and a

> Following is a list of quality-related activities. (a) Inspection of units when they are 100% complete to remove defective units (b) Designing a process with as few parts as possible to reduce the chance of defects (c) Warranty costs for defective produc

> Refer to the information in exercise 16.23. The following cost reduction suggestions were made by the kaizen costing team. Direct materials — Suppliers agreed to cost reductions of $4.50 for direct materials. Direct labour â&#128

> Blade Runner produces regular scooters and motorised scooters. Blade Runner scooters are considered the most reliable in the marketplace. Demand has been volatile, with huge increases in demand during the holiday season. In the past, the entity filled de

> Explain the similarities and differences among target costing, kaizen costing and life cycle costing.

> How might customer profitability analysis be used to improve organisational performance?

> What are the potential benefits from developing an input-output chart of accounts?

> Discuss the importance of ethical decision-making in a sustainability management accounting framework.

> What types of management decisions can benefit through using sustainability cost information?

> Oysters Away shucks and packs oysters and sells them wholesale to fine restaurants across the country. The income statement for last year follows: Pickers, shuckers and packers are employed on an hourly basis and can be laid off whenever necessary. Sal

> Explain the target costing cycle, and discuss the decision criteria used to determine whether a product will be manufactured using a target costing approach.

> Outline the relationship between the scope (levels) of costs and full cost accounting.

> Will organisational efforts towards sustainability result in reduced organisational profits?

> Why should the economic, environmental and cultural dimensions be managed in unison?

> Is sustainability achievable in all organisations regardless of their operating activities?

> Define the terms ‘sustainability’, ‘sustainability management’ and ‘sustainability management accounting’.

> Briefly comment on how legislation and societal expectations could influence the scope of sustainability management practice within organisations.

> What are some of the factors that managers should consider when implementing sustainability practices in their organisations?

> What are some of the sustainability-related considerations that managers should acknowledge when evaluating their organisation’s value chain?

> What key measures should be included in a sustainability balanced scorecard?

> What is the link between sustainability strategies and management accounting?

> Chocolate Creations is a shop located at Docklands in Melbourne. It makes and sells Specialty chocolates in a variety of flavours. Revenue and cost data for a recent week are as follows: All employees work standard shifts, regardless of how many chocol

> The use of RPE systems for the evaluation of individual managers has been abandoned by many organisations. Microsoft is one example. Given this can be conclude that RPE is no good?

> What is the role of rewards and incentives for executives in reducing agency costs?

> Describe agency costs and give several examples of them.

> How can target measures be used to promote either short-term or long-term performance?

> Describe the advantages and disadvantages of equity rewards.

> Discuss why an incentive package might include individual, divisional and corporate-level performance targets.

> Explain the difference between shares and share options.

> Explain why boards of directors will often employ independent remuneration consultants to assist in developing and assessing compensation plans.

> Why would a company restrict when a senior executive can exercise their share options?

> Refer to Paisley Insurance in comprehensive example 1 in chapter 12. In this example, an ABC and non-ABC version of the costs of servicing each type of account customer — residential and commercial — was determined. Required State some important qualit

> What role does the ASX Corporate Governance Council’s Corporate government principles and recommendations, and the Corporations Act have in executive remuneration?

> What are the advantages and disadvantages of having an individual’s remuneration linked to performance outcomes?

> Should a remuneration plan include a cash bonus or share options? Under which circumstances would either be appropriate?

> Describe two disclosures required by the Corporations Act with respect to executive remuneration.

> ‘Executives should only be compensated based upon the achievement of targets. They should not receive a fixed salary component’. Discuss.

> Identify why RPE would be used t the company level.

> Explain agency theory and how it relates to reward systems.

> Allied Trucking moves produce from farms to markets. Its managers decided to implement a balanced scorecard around the entity’s vision statement: 'We aim to be the industry leader in cost-effective and timely delivery of produce’. Provide two potential

> What potential problems could arise if the balanced scorecard was developed without a strategy map being available?

> How might a balanced scorecard be used?

> Suppose that Hyundai used target costing to decide whether to produce a new vehicle, such as a Hybrid SUV Vehicle. Required (a) Describe the steps Hyundai’s design team would have taken. (b) Explain why managers cannot easily predict demand for a new pr

> Describe the implementation process for the balanced scorecard.

> Identify the four generic perspectives for a balanced scorecard and explain how they are related.

> Outline the purpose of strategy maps.

> What is strategic decision making? What role does it play in the balanced scorecard?

> Differentiate between a lag indicator and a lead indicator. Provide two examples of each.

> Explain why demand might increase for relevant and useful information in the future. What professional skills will help you meet that need?

> (a) Pick two public companies, go to their websites and identify their major strategies. (b) Pick one of the companies from part (a) and go to the website of a competitor in the same industry. (For example, if you chose Coles, you might go to the website

> Suppose that a travel agency decided it would no longer compensate employees with sales commissions, but instead pay a salary with a bonus for high customer satisfaction ratings. What problems would you foresee from the agency’s financial perspective?

> Explain the differences between financial and non-financial performance measures and give two examples of each.

> Explain how EVA differs from residual income.

> Arnie’s Flowers is a small Mt Macedon florist shop. Arnie sells flowers for bouquets, and she also prepares and delivers flower arrangements. Required (a) Arnie is trying to decide how much to charge for a new type of rose that wholesales for $0.40 per

> Explain why the use of residual income for performance evaluation provides better incentives, in some ways, than ROI, but still causes managers to make some decisions that could be harmful to an organisation in the long run.

> Explain how residual income is calculated, and define required rate of return in your own words.

> Explain how and why the use of ROI for performance evaluation can cause managers to make decisions that could be harmful to an entity in the long run.

> Explain how return on investment (ROI) is calculated and how it can be decomposed into two financial measures.

> A national company, Fast Print, decided to expand into several developing countries. The company has been managed under a centralised organisational form, but is considering changing to a decentralised form. List the advantages and disadvantages of makin

> Identify the four different types of responsibility centres and explain the general objectives of each.

> Explain why organisational form may vary if specific knowledge versus general knowledge is needed for decision making.

> At a recent management meeting at Skyward Industries, the Transport Division manager was heard to say “this transfer pricing is a waste of time – at the end of the year all the internal transactions are eliminated on consolidation in the financial report

> Why do you consider that taxation authorities require an international transfer price to be set based on an arm’s length transaction?

> 'Transfer pricing is a waste of an entity’s resources; it all gets eliminated on consolidation'. Discuss.

> Search online for two organisations that have used life cycle costing. Briefly comment on what you find in relation to this practice.

> Cost allocation has no impact on the transfer price set. Discuss.

> Describe as many different methods for setting transfer prices as you can.

> Suppose transfer prices are set at market prices and a manager who previously purchased internally begins to purchase externally. Explain what it means to say that the outsourcing decision might have been suboptimal.

> An organisation’s plant in Queensland manufactures a product that is shipped to a branch in Tasmania for sale. Does it make any difference which branch (each is a profit centre) is charged for the cost of transportation? Explain.

> Explain the differences between general and specific knowledge. Give an example of an industry where knowledge is quite general and an example of an industry that requires specific knowledge.

> Explain why a lean organisation would refuse to implement an absorption costing system?

> What is throughput costing? How is it linked to lean accounting?

> Should the lean thinking firm be concerned about the costs of quality activities? Describe by drawing on Deming’s 14 principles of management.

> Describe the four types of quality-related activities.

> Explain how the TOC fits within the lean thinking philosophy.

> Search online for two organisations that have used target costing. Briefly comment on what you find in relation to this practice.

> Outline the five steps in the theory of constraints? In many examples of the TOC in practice, idle capacity is generated. Why? Can this be a good thing?

> What is a just-in-time manufacturing system? Why would organisations choose to adopt it?

> Describe the behavioural and social controls in a lean manufacturing environment. How would they be different to in traditional (non-lean) organisations?