RH Bhd is just starting up. The management team has decided from the beginning thatdecentralization was the preferred organizational style and has made this clear in allinterviews and discussions with potential employees. Mr. Pang, the CEO, is unsure aboutthe best way to evaluate his division managers. He has heard the terms return oninvestment, residual income, economic value added, and flexible budgets but wants toknow the pros and cons of each.Electronic Telephone Systems (ETS), a division of RH Bhd buys and installs modularoffice components. For the most recent year, the division had the following performancetargets:Asset turnoverProfit marginTarget rate of return on investments for RICost of capitalIncome tax rate2.56%13%10%40%Actual information concerning the company's performance for last year follows:Total assets at beginning of yearTotal assets at end of yearTotal invested capital (annual average)SalesRM3,600,000RM5,300,000RM8,000,000RM9,000,000RM3,650,000RM4,770,000RM675,000Variable operating costsDirect fixed costsAllocated fixed costsRequired:a) Briefly describe ROI, residual income (RI), EVA and other approaches toperformance evaluation.b) For ETS, compute the segment margin and the average assets for the yearc) Based on segment margin and average assets, compute the profit margin, assetturnover and ROI.d) Evaluate the ROI performance of ETS.

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RH Bhd is just starting up. The management team has decided from the beginning that decentralization was the preferred organizational style and has made this clear in all interviews and discussions with potential employees. Mr. Pang, the CEO, is unsure about the best way to evaluate his division managers. He has heard the terms return on investment, residual income, economic value added, and flexible budgets but wants to know the pros and cons of each. Electronic Telephone Systems (ETS), a division of RH Bhd buys and installs modular office components. For the most recent year, the division had the following performance targets: Asset turnover 2.5 Profit margin 6% Target rate of return on investments for RI 13% Cost of capital 10% Income tax rate 10%

RH Bhd is just starting up. The management team has decided from the beginning that decentralization was the preferred organizational style and has made this clear in all interviews and discussions with potential employees. Mr. Pang, the CEO, is unsure about the best way to evaluate his division managers. He has heard the terms return on investment, residual income, economic value added, and flexible budgets but wants to know the pros and cons of each. Electronic Telephone Systems (ETS), a division of RH Bhd buys and installs modular office components. For the most recent year, the division had the following performance targets: Asset turnover 2.5 Profit margin 6% Target rate of return on investments for RI 13% Cost of capital 10% Income tax rate 10%

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter14: The Balanced Scorecard And Corporate Social Responsibility

Section: Chapter Questions

Problem 8E: Coulson and Company is a large retail business that has a firm-wide balanced scorecard. Recently,...

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In this comprehensive paper, assume you are working with the accounting department in your organization to make a decision regarding a capital investment you feel is needed to improve productivity in your department. The organization has limited resources and you are trying to prove why your department needs the resources more than other departments in the company. Provide an example of a possible capital investment to use in your argument to management that will be used throughout your paper. Give some examples of the types of non-financial factors that managers would consider in this decision that are more important in today's capital investment decisions than they were in the past.
you are working with the accounting department in your organization to make a decision regarding a capital investment you feel is needed to improve productivity in your department. The organization has limited resources and you are trying to prove why your department needs the resources more than other departments in the company. Provide an example of a possible capital investment to use in your argument to management.
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.
As the CEO of a relatively new and fast-growing start-up, you and your management team have previously emphasized technical and marketing innovation and creativity over planning and budgeting. But now with growing competition and the maturing of the company’s products, you recognized that a culture of better financial planning must be established if the company is to succeed in the long run. You feel that the financial staff have the best expertise and understanding of the business to prepare effective budgets, but you are concerned about the motivational effects of excluding the lower management for the process, please give me advise. How would you suggest the company implements a financial planning culture. Be specific, include details of how and who would be part of the budgeting process. What kinds of budgets would be developed and what systematic process would you suggest?
Transitioning from employee to manager has been exciting for Matthew! He enjoys having the responsibility and authority to make decisions, and it is rewarding to join the management team, sharing insights to make better decisions. One of his first responsibilities is to address the DM purchases budget. The company has a strong relationship with its current supplier, but the quality of the supplier's DM has declined. Knowing this, Matthew has already reached out to a different vendor to see what kind of a deal it might offer. The DM information for Matthew's division and for each vendor just described is as follows. ● ● ● ● ● (a) DM on hand as of July 1 slightly exceeds expectations at 1,580 linear board feet. Each unit requires 4 linear board feet; Matthew is most comfortable if the company has 20% of the following month's production needs on hand. The cost per linear foot is $5.50 with the current supplier; it's $6.00 with the new vendor. Planned production for July is 1,900 units;…
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?
What should an organization do if performance measures change? A. Make sure that the manager being evaluated is aware of the measurement change, as this may affect his or her decision-making. B. Make sure that the manager benefits without the corporation also benefitting. C. Make sure that there are significant overriding opportunities for each manager, if the manager is unaware of the change. D. Obtain customer surveys on the change before communicating the change to the manager.
Coulson and Company is a large retail business that has a firm-wide balanced scorecard. Recently, management has discussed the need for the balanced scorecard to be more relevant to each individual department of the company. Specifically, management wants to come up with unique scorecards for its Public Relations and Inventory Management departments. For both departments, management recognizes that properly and efficiently training employees is important. For these purposes, management gathers data on the median training hours per employee and new employee performance review ratings. For the Inventory Management Department, management is focused on reducing stockouts (running out of certain inventory items) and keeping accurate inventory counts. For these purposes, the company tracks the number of back orders and discrepancies between the physical and record counts of inventory, respectively. For the Public Relations Department, management is focused on improving the publics CSR image of the company and attracting new customers. Management measures these objectives using Forbes CSR Rating of Coulson and Company and the number of new customers, respectively. a. Identify the term for Coulson and Companys plan to create unique balanced scorecards for its individual departments. b. Draw the unique balanced scorecards of each department. Identify the departments common and unique measures, and include all the elements of the balanced scorecard that you can in your drawings, given the information provided.
The primary reason for using a performance measure, such as ROI, is to: 10 Multiple Choice Ask Motivate organizatlons to embrace strategic plans that are consistent with employee goals. Motivate employees to hold stock In the company for long-term perlods. Motivate the CEO and CFO to maintaln their stock holdings In the company. Motivate employees to make decisions consistent with goals and objectives of the organization.
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.
Pretend you are a junior managerial accountant. Your supervisor has no knowledge of sustainability accounting. All of the following statements would be convincing arguments to advocate for the importance of sustainability accounting, except one. Which one? Multiple Choice Sustainability accounting reflects the changing nature of accountability. $ Companies are accountable to the world at large, not simply to shareholders. Sustainability accounting does not replace the emphasis on financial results; rather it complements financial strength in building a strong company for the future. Companies are only accountable to shareholders and shareholders care about sustainability.
You are the management accountant at Xero Ltd and have been trying to persuade your boss, the finance director, that your role should change. You have read about Burns and Scapens' report 'Accounting Change Project' and think that it suggests an interesting change from your current roles of preparing and reviewing budgets and overseeing the production of management and financial accounts. Your boss is sceptical but is willing to listen to your arguments." a. “Explain the changes and what is driving these changes in the role of the management accountant based on Burns and Scapens work." "(Maximum word count: 500 words)"