Flamengo Co, a sporting goods manufacturing, decided to decentralize its operations. Which statement below is true about Flamengo after the decentralization process? Flamengo's managers now make and implement fewer decisions than they did before the decentralization. Flamengo's lower-level managers are responsible only for implementing decisions. At Flamengo, overall profit margins can mask inefficiencies within various subdivisions. At Flamengo Co., the CEO makes all the important operating and strategic decisions.
Q: BC Ltd has incorporated a bonus plan that rewards the board of directors (executive members) by…
A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions…
Q: Harry Haney, manager of the Eastern Division of MertockCo., made the following comment to the…
A: Incremental Analysis: Incremental analysis refers to the analysis of differential revenue that could…
Q: A 100-year-old manufacturing firm has had an excellent reputation for high-quality products, with…
A: Answer: Correct option is option (b) A younger workforce will likely be less educated and trainable.…
Q: Alexander and Kristin are executive managers at Safety First Fall Safety Equipment Co. They realize…
A: Cognitive bias refers to the pattern of deviation from normality during a decision making or a…
Q: When a company is decentralized, top management will have little time to focus on long-term strategy…
A: 1) This statement is FALSE Decentralization means transfer of Authority , Responsibility ,…
Q: motivate management to work to maximise the value of its firm. Underperformance might lead to…
A: Funds are available when cash or cash claims (receivables) are received. Funds are available when…
Q: In a strategy meeting, the president of a manufacturing company said, “If we were to raise the price…
A: Unit contribution margin is calculated by subtracting variable expenses including manufacturing,…
Q: The Tuguegarao City branch manager was not satisfied not being able to meet the desired revenues but…
A: Budgeting - It is the statement showing future estimated cash inflows and cash outflows of the…
Q: If the company is successful in achieving challenging targets for these performance measures, will…
A: Strategic Performance Measurement System: Strategic performance measurement system is an approach…
Q: ABC Ltd has incorporated a bonus plan that rewards the board of directors (executive members) by…
A: Accounting refers to the process of recording, summarizing, interpretation and communicating the…
Q: The trend for cost of goods sold is it is decreasing as a percentage of sales and the trend for…
A: CVP analysis is used to analyze the impact of changes in sales volume on costs and operational…
Q: Wonkies, Inc. is a large company that owns fast-food restaurants, has a soft drink division, and a…
A: Residual income is the income that is generated in excess more than the required rate of return. It…
Q: Peterson Corporation is considering implementing a JIT production system. The new system would…
A: Just-In-Time production (JIT) system is a managerial approach in which minimum inventories are kept…
Q: wards the board of directors (executive members) by providing a bonus of 3 per cent of reported…
A: .Opportunistic behaviour occurs when the actions of management are to better their own personal…
Q: Wonkies, Inc. is a large company that owns fast-food restaurants, has a soft drink division, and a…
A: Yes, the plan is an agreeable plan.
Q: Current Operations Proposal of Vice President of Sales $2.5 $2 280,000 units Unit Price Unit Sales…
A: Income statement: Under this Statement showing the company’s performance over a period of time by…
Q: For each of the following items, identify which of the management accounting guidelines applies:…
A:
Q: Many companies recognize that their cost systems are inadequate for today's powerful global…
A: The cost of a corporation's inventory at the conclusion of an accounting period is known as…
Q: Many companies recognize that their cost systems are inadequate for today's powerful global…
A: The traditional costing method uses a single overhead recovery rate while in the case of ABC…
Q: A paper published in the Harvard Business Review points out a new way to calculate economic profit…
A: Economic Profit: It is the profit after deducting opportunity cost from operating profit.
Q: BC Ltd has incorporated a bonus plan that rewards the board of directors (executive members) by…
A: POSITIVE ACCOUNTING THEORY (PAT) Positive accounting theory (PAT) is concerned with predicting such…
Q: ABC Ltd has incorporated a bonus plan that rewards the board of directors (executive members) by…
A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions…
Q: Wonkies, Inc. is a large company that owns fast-food restaurants, has a soft drink division, and a…
A: Residual Income: The residual income is that income which is derived after deducting the return on…
Q: ABC Corporation has recently completed a project to reduce total production costs by 5%. Net income…
A: Part A: Cost of Quality: Cost of quality (COQ) is defined as a methodology that allows an…
Q: "I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings…
A: Return on Investment = Net IncomeTotal Investment Note: Since you have posted question with…
Q: ABC Ltd has incorporated a bonus plan that rewards the board of directors (executive members) by…
A: 1. Positive accounting theory (PAT) is concerned with forecasting behavior such as firm accounting…
Q: Explain whether the board of directors could be motivated to try to inflate reported profit
A: Funds are available when cash or cash claims (receivables) are received. Funds are available when…
Q: Cathy’s Classic Clothes is a retailer that sells to professional women in the northeast. The firm…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: I know headquarters wants us to add that new product line,” said Dell Havasi, manager of Billings…
A: Return on Investment(ROI):-It is performance measures that evaluate investment efficiency in…
Q: Using Positive Accounting Theory (PAT), discuss the bonus theme in general and why the bonus plan…
A: Positive accounting theory is concerned with predicting actions as the choices of accounting…
Q: Blue is the controller at the Acme Shoe Company, a large manufacturing company located in Franklin,…
A: Performance appraisal is process in which performance of managers and employees are assessed; and on…
Q: For each of the following items, identify which of the managementaccounting guidelines applies:…
A:
Q: In a strategy meeting, the computer manufacturing company's president said, "If we raised the price…
A: Break-even point is computed by dividing the total fixed cost by the contribution margin.…
Q: ABC Ltd has incorporated a bonus plan that rewards the board of directors (executive members) by…
A: PAT stands for Positive Accounting Theory which dealt with predicting such actions as the accounting…
Q: Using Positive Accounting Theory (PAT), discuss the bonus theme in general and why the bonus plan…
A: Positive accounting theory (PAT) refers to the process that uses the ability and knowledge of…
Q: s Tandy's plan ethical?
A:
Q: Use the opportunistic perspective of PAT to explain the potential for managers to manipulate…
A:
Q: Analyzing whether to keep the billing function within an organization or outsource it Deciding to…
A: The first 3 subdivisions are answered for you. Please resubmit specifying the question number you…
Q: “I know headquarters wants us to add that new product line,” said Dell Havasi, manager of Billings…
A: Hence, 10.40 % is the profit margin for this year. It is obtained by dividing net operating income…
Q: ABC Ltd has incorporated a bonus plan that rewards the board of directors (executive members) by…
A: Solution- Financial statement manipulation may be a kind of accounting fraud that is still…
Q: Frank Corporation evaluates its managers based on return on investment (ROI). Hazel B and Sarah D,…
A: 1. According to the situation, all the personnel that are involved in the discussion are considered…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Identify the major problems in this situation and explain how they impact the organization. You will need to consider both behavioral and analytical factors. Specifically, how might managerial accounting concepts, tools, or techniques be applied to help resolve this dilemma? What are possible consequences of applying the same to this dilemma? Briefly explain Orange Electronics has been experiencing declining profit margins and has been looking for ways to increase operating income. It cannot raise selling prices for fear of losing business to its competitors. It must either cut costs or improve productivity. The company uses a standard cost system to evaluate the performance of the soldering department. It investigates all unfavorable variances at the end of the month. The soldering department rarely completes the operations in less time than the standard allows (which would result in a favorable variance). In most months, the variance is zero or slightly unfavorable. Reasoning that…Upper management of a growing company has decided its organization is too large to operate as one unit. In fact, some in upper management believe parts of the company are not as profitable as they should be. They have decided to create different segments of the company based on similar groups of products manufactured and have appointed managers of each of these segments. Which of the following would be a good reason for upper management to make this decision? 1. Each segment manager can be held responsible for income generated by segment assets. II. Duplication of work across the organization will decline. III. Segment managers have better information to make decisions than upper management. IV. Upper management can build future leaders by developing segment managers' decision-making skills. V. Communication across the company will be strengthened. O All statements (I-V) are good reasons II, III, IV O I, II, IV, V O I, III, IV OLILVYou work for Alphabet Holdings Plc as a junior management accountant. The board of directors are considering ways to improve the suboptimal performance of an investment in a manufacturing company called DEF products Ltd. As you can see from the table below the directors are considering closing products Bozon and Carbon in an effort to improve overall profitability. You spot that marginal costing would show the results differently and may affect the directors’ decision. Requirements for Question 2 Use your knowledge of management accounting and marginal costing to calculate the contribution of each product Use your findings from part (a) and appropriate academic references to explain whether the company should stop making product Bozon Use your findings from part (a) and appropriate academic references to explain whether the company should stop making product Carbon Discuss how and why marginal costing calculates contribution to pay overheads and why this is…
- Profit Corp. has a subunit classified as a cost center that supports other parts of the firm but has reported costs higher than what the corporate office would like to see. Thus, the manager of this subunit is under pressure to cut operating costs without hurting the perceived quality of services provided. What general recommendations could you give to the manager of this cost center to achieve that goal?Consider the following conversation between Leonard Bryner, president and manager of a firm engaged in job manufacturing, and Chuck Davis, certified management accountant, the firms controller. Leonard: Chuck, as you know, our firm has been losing market share over the past 3 years. We have been losing more and more bids, and I dont understand why. At first, I thought that other firms were undercutting simply to gain business, but after examining some of the public financial reports, I believe that they are making a reasonable rate of return. I am beginning to believe that our costs and costing methods are at fault. Chuck: I cant agree with that. We have good control over our costs. Like most firms in our industry, we use a normal job-costing system. I really dont see any significant waste in the plant. Leonard: After talking with some other managers at a recent industrial convention, Im not so sure that waste by itself is the issue. They talked about activity-based management, activity-based costing, and continuous improvement. They mentioned the use of something called activity drivers to assign overhead. They claimed that these new procedures can help to produce more efficiency in manufacturing, better control of overhead, and more accurate product costing. A big deal was made of eliminating activities that added no value. Maybe our bids are too high because these other firms have found ways to decrease their overhead costs and to increase the accuracy of their product costing. Chuck: I doubt it. For one thing, I dont see how we can increase product-costing accuracy. So many of our costs are indirect costs. Furthermore, everyone uses some measure of production activity to assign overhead costs. I imagine that what they are calling activity drivers is just some new buzzword for measures of production volume. Fads in costing come and go. I wouldnt worry about it. Ill bet that our problems with decreasing sales are temporary. You might recall that we experienced a similar problem about 12 years agoit was 2 years before it straightened out. Required: 1. Do you agree or disagree with Chuck Davis and the advice that he gave Leonard Bryner? Explain. 2. Was there anything wrong or unethical in the behavior that Chuck Davis displayed? Explain your reasoning. 3. Do you think that Chuck was well informedthat he was aware of the accounting implications of ABC and that he knew what was meant by cost drivers? Should he have been well informed? Review (in Chapter 1) the first category of the Statement of Ethical Professional Practice for management accountants. Do any of these standards apply in Chucks case?As manager of department B in MarIeys Manufacturing, based on the costs you identified in the previous exercise for further research, how does this impact the financial performance of your department, and what might be some questions you want to ask or solutions you might propose to Marleys management?
- You are the new cost accountant for ABX Corporation. After careful review of the company's operation you have been tasked to determine the company's break-even point in units and dollars, the numbers sold to meet the company's target profit and contribution income statement for both outcomes. Management has also asked that you discuss the risk, uncertainty, changing variables and margin of safety regarding Cost Volume Profit Analysis. Based on your discussion and calculations what would be your recommendation if the company wanted to increase variable cost by 20% and sales price by 5%? Support your recommendation. Company's Data: ABX Corporation sold it's production for %600/unit. Fixed cost are $725,000 per year. Variable costs are $455 per unit. ABX Corporation desires a target profit of $1,250,000 per year.The Southern Division manager of Texcaliber Inc. is growing concerned that the division will The division manager has come to Aston Melon, the divisional controller, to determine exactly for internal profit reporting and had an appropriate level of inventory at the beginning of the period. The division manager knows that he can boost profits by increasing production at the end of the period. The increased production will allocate fixed costs over a greater number of units, reducing cost of goods sold and increasing earnings. Unfortunately, it is unlikely that addi- profit objectives. Aston analyzes the data and determines that the division will need to increase inventory by 30% in order to absorb enough fixed costs to meet the division's income objective. how much additional production is needed to increase net income enough to meet the division's Chapter 7 Variable Costing for Management Analysis ke It Further TIF 7-3 Salesper Bon Jager Inc. ma TIF 7-1 Absorption costing operating…You are the new cost accountant for ABX Corporation. After careful review of the company’s operations you have been tasked to determine the company’s break-even point in units and dollars, the numbers sold to meet the company’s target profit and contribution income statement for both outcomes.Management has also asked that you discuss the risk, uncertainty, changing variables and margin of safety regarding Cost Volume Profit Analysis. Based on your discussion and calculations what would be your recommendation if the company wanted to increase variable cost by 20% and sales price by 5%? Support your recommendation. ABX Corporation sold it's product for $600/unit. Fixed cost are $725,000 per year. Variable costs are $455 per unit. ABX Corporation desires a target profit of $1,250,000 per year.
- The Southern Division manager of Texcaliber Inc. is growing concerned that the division will not be able to meet its current period income objectives. The division uses absorption costing for internal profit reporting and had an appropriate level of inventory at the beginning of the period. The division manager knows that he can boost profits by increasing production at the end of the period. The increased production will allocate fixed costs over a greater number of units, reducing cost of goods sold and increasing earnings. Unfortunately, it is unlikely that additional production will be sold, resulting in a large ending inventory balance. The division manager has come to Aston Melon, the divisional controller, to determine exactly how much additional production is needed to increase net income enough to meet the division's profit objectives. Aston analyzes the data and determines that the division will need to increase inventory by 30% in order to absorb enough fixed costs to meet…Blue is the controller at the Acme Shoe Company, a large manufacturing company located in Franklin, Pennsylvania. Acme has many divisions, and the performance of each division has typically been evaluated using a return on investment (ROI) formula. The return on investment is calculated by dividing profit by the book value of total assets.In a meeting yesterday with Bob Burn, the company president, Blue warned that this return on investment measure might not be accurately reflecting how well the divisions are doing. Blue is concerned that by using profits and the book value of assets, division managers might be engaging in some short-term finagling to show the highest possible return. Bob concurred and asked what other numbers they could use to evaluate division performance.Blue said, ‘‘I’m not sure, Bob. Net income is not a good number for evaluation purposes. Because we allocate a lot of overhead costs to the divisions on what some managers consider an arbitrary basis, net…Frank Corporation evaluates its managers based on return on investment (ROI). Hazel B and Sarah D, managers of the electronics and housewares departments respectively, have recently suffered from declining profits in their departments. Over lunch, they discuss the problem, and how they could improve performance. Most of the discussion centers around ways to increase sales. Near the end of the lunch period, however, Sarah remarks that there are two components to consider, and that they have considered only one. She wonders whether there is some way to reduce investment, and by decreasing the denominator of the ROI fraction, to improve the final result. Back at work, Hazel continues to mull over Sarah's remarks. She decides to pursue the matter further, and before the end of the quarter she has sold quite a bit of older equipment and replaced it with equipment obtained with a short-term lease. Her performance, measured by ROI, is markedly improved, although sales continue to be…