Managerial Accounting Essay
01)How does managerial accounting differ from financial accounting? A: Managerial accounting is concerned with providing information to managers for use inside the organization. Financial accounting is con¬cerned with providing information to stockhold¬ers, creditors, and others outside of the organi¬zation.
02)Pick any major television network and describe some planning and control activities that its managers would engage in. A: Five examples of planning activities include:
1.Estimating the advertising revenues for a future period.
2.Estimating the total expenses for a future period, including the salaries fo all actors, news reporters and sportscasters.
3.Planning how many new television shows to introduce to market.
4.Planning the network’s advertising activities and expenditures. 5.Planning each television show’s designated broadcast time. Five examples of controlling activities:
1.Comparing the actual number of viewers for each show to its viewership projections. 2.Comparing the actual costs of running a production studio to the budget 3.Comparing the revenues earned from broadcasting a sporting event to the costs incurred to broadcast the event. 4.Comparing the actual costs of producing a made for television movie to its budget. 5.Comparing the actual cost of providing global and local news coverage to the budget.
03)If you have to decide whether to continue making a component part or to begin buying the part from an overseas supplier, what quantitative and qualitative factors would influence your decision? A: the quantitative analysis would focus on determining the potential cost saving from buying the part rather than making it. The qualitative analysis would focus on broader issues such as strategy, risks, and corporate social responsibility.
04)Why do companies prepare budgets?
A: companies use budgets to translate into formal quantitative terms. Budgets are used for various purposes, such as forcing managers to plan ahead, allocating resources across departments, coordinating activities across departments. These various purposes often conflict with one another, which makes budgeting one of management’s most challenging activities.
05)Why is managerial accounting relevant to business major and their future careers? A: Managerial accounting is relevant to all business students because all managers engage in planning, controlling, and decision making activities. If managers wish to influence co-wokers across the organization, the must be able to speak in financial terms to justify their proposed courses of action. 06)Why is managerial accounting relevant to accounting major at the futures careers? A: The institute of Managerial Accountants estimates that 80% of accountants work in non-public accounting environments. Accountants that work in corporate, non-profit, and governmental organizations are expected to use their planning, controlling and decision making skills to help improve performance.
07)Pick any large company and describe its strategy using the framework in the chapter. A: Amazon.com competes in terms of operational excellence. The company focuses on delivering products faster, more conveniently and at a lower price than competitors. Its using the planning, controlling and make decision making.
08)Why do management accountants need to understand the company’s strategy? A: Planning, controlling and decision making must be performed within the context of company’s strategy.
09)Pick any large company and describe three risks that it faces and how it responds to those risks. A: the company is NIKE, which has suppliers in over 40 countries. One risk that NIKE faces is that its suppliers will fail to manage their employees in a socially responsible manner. NIKE faces the risk that unsatisfactory environmental performance will diminish its brand image. The company is investing substantial resources to develop products that minimize adverse impacts on the environment. NIKE faces the risk that customers will not like its new products. The company uses focus groups research to proactively assess the customers’ reaction to its new products.
10)Provide three examples of how a company’s risks can influence its planning, controlling and decision-making activities. A: Airlines face the risk that large spikes in fuel prices will lower their profitability. They may reduce this risk by spending money on hedging contracts that enable them to lock-in future fuel prices that will not change even if the market prices increases.
11)Pick any large company and explain a three ways that it could segment its companywide performance. A: Procter&Gamble could segment its performance by product category (Beauty and grooming, Household care, Health and well-being), product line ( crest and tide), and stock keeping units ( Crest cavity protection toothpaste, crest extra whitening toothpaste and crest sensitivity toothpaste).
12)Locate the website of any company that publishes a corporate social responsibility report (also referred to as a sustainability report). Describe three nonfinancial performance measure included in the report. Why do you think the company publishes this report? A: Timberland publishes quarterly corporate social responsibility metrics ( www.earthkeeper.com/CSR/csrdownloads.) there of those metrics include metric tons of carbon emissions the percentage of total cotton sourced that is organic and renewable energy use as a percent of total energy usage. He’s corporate slogan of “doing well by doing good” suggests that the company publishes CSR reports because that its financial success is positively influenced by its social and environmental performance.
13)Why do companies that implement lean production tend to have minimal inventories? A: companies that use learn production only make units in response to customer orders. They produce units just in time to satisfy customer demand, which results in minimal inventories.
14)Why are leadership skills important to manager?
A: organizations are managed by people that have their own personal interests, insecurities, belief, and data supported conclusions that ensure unanimous support for give course of action is the exception rather than the rule. Managers must possess strong leadership skills if the wish to channel their co-wokers’ efforts towards achieving organizational goals. 15)Why ethics important to business?
A: Ethical behavior is the lubricant that keeps the economy running.