For each of the following items, identify which of the management

1-26: For each of the following items, identify which of the management accounting guidelines applies: cost-benefit approach, behavioral and technical consideration, or different costs for different purposes.

 

1: Analyzing whether to keep the billing function within an organization or outsource it.

 

2: Deciding to give bonuses for superior performance to the employees in a Japanese subsidiary and extra vacation time to the employees in a Swedish subsidiary.

 

3: Including costs of all the value chain functions before deciding to launch a new product, but including only its manufacturing costs in determining its inventory valuation.

 

4: Consider the desirability of hiring one more sales person.

 

5: Giving each salesperson the compensation option of choosing either a low salary or a high percentage sales commission.

 

6: Selecting the costlier computer system after considering two systems.

 

7: Installing a participatory budgeting system in which managers set their own performance targets, instead of top management imposing performance targets on managers.

 

8: Recording research costs as an expense for financial reporting purposes (as required by U.S> GAAP) but capitalizing and expensing them over a longer period for management performance-evaluation purposes.

 

9: Introducing a profit sharing plan for employees.

 

 

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