Chapter 02 - Answer - MANAGEMENT ACCOUNTING - Solutions...

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MANAGEMENT ACCOUNTING - Solutions Manual CHAPTER 2 MANAGEMENT ACCOUNTING  AND  THE BUSINESS ENVIRONMENT I. Questions 1. Managerial accounting information often brings to the attention of managers important issues that need their managerial experience and skills. In many cases, managerial-accounting information will not answer the question or solve the problem, but rather make management aware that the issue or problem exists. In this sense, managerial accounting sometimes is said to serve an attention-directing role. 2. Non-value-added costs are the costs of activities that can be eliminated with no deterioration of product quality, performance, or perceived value. 3. Managers rely on many information systems in addition to managerial- accounting information. Examples of other information systems include economic analysis and forecasting, marketing research, legal research and analysis, and technical information provided by engineers and production specialists. 4. Becoming the low-cost producer in an industry requires a clear understanding by management of the costs incurred in its production process. Reports and analysis of these costs are a primary function of managerial accounting. 5. Some activities in the value chain of a manufacturer of cotton shirts are as follows: (a) Growing and harvesting cotton (b) Transporting raw materials (c) Designing shirts (d) Weaving cotton material (e) Manufacturing shirts (f) Transporting shirts to retailers (g) Advertising cotton shirts Some activities in the value chain of an airline are as follows: 2-1
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Chapter 2 Management Accounting and the Business Environment (a) Making reservations and ticketing (b) Designing the route network (c) Scheduling (d) Purchasing aircraft (e) Maintaining aircraft (f) Running airport operations, including handling baggage (g) Serving food and beverages in flight (h) Flying passengers and cargo 6. Strategic cost management is the process of understanding and managing, to the organization’s advantage, the cost relationships among
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This note was uploaded on 07/18/2011 for the course ECON 102 taught by Professor Sadassad during the Spring '11 term at Abant İzzet Baysal University.

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Chapter 02 - Answer - MANAGEMENT ACCOUNTING - Solutions...

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