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chapter 1 solution - CHAPTER 1 The Changing Role of...

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CHAPTER 1 The Changing Role of Managerial Accounting in a Dynamic Business Environment 1-24 (30 MINUTES) Answers will vary widely for this exercise, depending on the company chosen by each student. Companies’ financial goals often include profitability, earnings per share, growth in the stock price, sales growth, and so forth. Managerial accounting can make an important contribution to all of these goals.
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1-26 (25 MINUTES) 1. Managerial accounting can be of significant benefit when it comes to solving the company’s problems. Managerial accounting is defined as the process of identifying, measuring, analyzing, interpreting, and communicating information in pursuit of an organization’s goals. Several of the problems lie in this area and may be attributed to a lack of formal planning, controlling, directing, and decision-making expertise. For example, bulging inventories and the fact that growth “…has occurred in spite of what we’ve done” may indicate the absence of a formal planning system— one that involves developing a detailed financial and operational description of anticipated activities. Dangerously low cash balances and the need for short-term loans may be eliminated by the use of a cash budget, which depicts cash inflows and outflows over a period of time. The addition of ski equipment may or may not have been the proper decision. Did Nelson correctly identify all possible alternatives and then make the proper selection? The canoe-building activities and white-water rafting trips may be losing
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chapter 1 solution - CHAPTER 1 The Changing Role of...

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