By Jerol.. Zimmerman
Accounting for determination Making and keep an eye on presents scholars and executives with an realizing appreciation of the strengths and boundaries of an organization’s accounting method. This publication presents a framework for pondering accounting structures and a foundation for reading proposed adjustments to those platforms. The 7th version demonstrates that managerial accounting is an essential component of the firm’s organizational structure, not only an remoted set of computational issues. the aim of this article is to supply scholars and bosses with an figuring out and appreciation of the strengths and boundaries of an organization’s accounting approach, thereby letting them be extra clever clients of those platforms. the most function proposed via the writer continues to be in tact for the 7th variation.
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Additional resources for Accounting for Decision Making and Control, 7th Edition
When is the $8,325 a good estimate of the opportunity cost of the material? Q2–4 Define sunk cost and give an example. Q2–5 What are avoidable and unavoidable costs? How are they related to opportunity costs? B. Cost Variation Managers commonly decide how many units to produce or how much service to provide during a certain time period. Dell Computer must decide how many computers of a particular model to manufacture next quarter. United Airlines must decide whether to fly a 90-passenger jet or a 130-passenger jet between Denver and Palm Springs next month.
Parkview receives its revenues from three principal sources: the federal government (Medicare), the state government (Medicaid), and private insurance companies (Blue Cross Blue Shield). Until recently, the private insurance companies continued to pay Parkview’s increasing costs and passed these on to the firms through higher premiums for their employees’ health insurance. Last year Trans Insurance (TI) entered the market and began offering lower-cost health insurance to local firms. TI cut benefits offered and told Parkview that it would pay only a fixed dollar amount per patient.
08 ϫ 2,000). Both marketing and manufacturing are doing what they were told to do (increase revenues and reduce average costs), but the value of the firm falls because the incentive systems are poorly designed. Four key points emerge from this example: 1. Beware of average costs. 50 unit cost tells us little about how costs will vary with changes in volume. Just because a cost is stated in dollars per unit does not mean that producing one more unit will add that amount of incremental cost. qxd 18 12/15/09 11:24 AM Page 18 Chapter 1 2.