g the revenue per employee ratio as an indicator for productivity will lead to outsourcing of personnel, even when it increases cost.True or false? And why?
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Using the revenue per employee ratio as an indicator for productivity will lead to outsourcing of personnel, even when it increases cost.True or false? And why?
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- Cost accounting logic can lead managers to keep their resources busy all the time, increasing productivity with no regard to demand. What is the negative result of this effect?In what way can the use of ROI as a performance measure for investment centers lead to bad decisions? How does the residual income approach overcome this problem?How may using ROI as a success indicator for investment centers lead to poor decisions? How does the residual income strategy address this issue?
- 1)What is cost behavior analysis? and Why is cost behavior analysis important to management? 2)“Break-even analysis is of limited use to management because a company cannot survive by just breaking even.” Do you agree? Agree or not agree, please describe your line of reasoning.Break-even analysis is of limited use to management because a company cannot survive by just breaking even." Do you agree with this statement? Please explain. Discuss the components of the Contribution Margin Income Statement, how does management use this in the decision making process?Managers often assume a strictly linear relationship between cost and the level of activity.How can this practice be defended in light of the fact that many costs are curvilinear?
- Why would staff costs increase with increase in revenue?Which of the following would reduce net profit margin but have no effect on gross profit margin?a) Reducing the commission rate paid to salesmen.b) Negotiating a lower purchase price for raw materials.c) An increase in IT support costs for the accounting package used.d) Increasing the expected economic lives of machinery used in the production function.Prime indicators of problems with a conventional costing system include company profits being eroded and production managers not being able to make sense of product costs. Prime indicators of problems with a conventional costing system include company profits being eroded and production managers not being able to make sense of product costs. True False
- What is return on investment, and how is it calculated? What are the advantages and limitations of return on investment? What are the measurement issues to be concerned about when using return on investment? Define productivity. Why is it important for a firm that follows a strategy of being the cost leader to improve productivity? What is incentive compensation? What type of organization is best suited to incentive compensation plans?Explain how the cost per equivalent unit might be misleading to managers, particularly when a significant change in production is anticipated.What of the following is NOT a Benefit of Activity Based Management? a.It assists in the budgeting process. b.It aids management in cost cutting and/or cost control and inferentially in product profitability. c.It causes managers to identify non-value added activities and therefore encourages thinking of means of reducing such activities. d.Is more complex than traditional accounting system because it uses multiple cost application rates, one for each activity or cost pool.