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Chapter 1 - Tutorial solutions - Tutors

Chapter 1 - Tutorial solutions - Tutors - ACCT2102...

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ACCT2102 – Fundamentals of cost accounting – Suggested tutorial solutions Chapter 1 – The accountant’s role in the organisation (a) Concept questions to review before class 1-1 Management accounting measures, analyses and reports financial and non-financial information that helps managers make decisions to fulfill the goals of an organisation. It focuses on internal reporting and is not restricted by generally accepted accounting principles (GAAP). Financial accounting focuses on reporting to external parties such as investors, government agencies, and banks. It measures and records business transactions and provides financial statements that are based on generally accepted accounting principles (GAAP). Other differences include (1) management accounting emphasises the future (not the past) , and (2) management accounting influences the behaviour of managers and other employees (rather than primarily reporting economic events). 1-4 The business functions in the value chain are Research and development —generating and experimenting with ideas related to new products, services, or processes. Design of products, services, and processes —the detailed planning and engineering of products, services, or processes. Production —acquiring, coordinating, and assembling resources to produce a product or deliver a service. Marketing —promoting and selling products or services to customers or prospective customers. Distribution —delivering products or services to customers. Customer service —providing after-sale support to customers. 1-5 Supply chain describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same organization or in other organisations. INPORTANCE: Cost managemen t is most effectiv e when it integrates and coordinates activities across all companies in the supply chain as well as across each 1
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ACCT2102 – Fundamentals of cost accounting – Suggested tutorial solutions business function in an individual company’s value chain . Attempts are made to restructure all cost areas to be more cost-effective . 1-8 The five-step decision-making process is (1) identify the problem and uncertainties (2) obtain information (3) make predictions about the future (4) make decisions by choosing among alternatives and (5) implement the decision, evaluate performance and learn. 1-9 Planning decisions focus on (a) selecting organisation goals, predicting results under various alternative ways of achieving those goals, deciding how to attain the desired goals, and (b) communicating the goals and how to attain them to the entire organisation. Control decisions
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