Ch01SM - CHAPTER 1 DISCUSSION QUESTIONS 1-1 Q1-1. Planning...

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Unformatted text preview: CHAPTER 1 DISCUSSION QUESTIONS 1-1 Q1-1. Planning is the development of a consistent set of actions, resources, and measurements by which the achievement of objectives can be assessed. Planning takes into account the interactions between the organization and its environment in whatever is to be done. Control is the process by which managers assure that resources are obtained and used in an efficient and effective manner to carry out the plan and accomplish the organiza-tions objectives. Control implies that perform-ance measurements are reviewed to determine if corrective action is required. Planning and control are interrelated. Control is carried out within the established planning framework and serves to evaluate conformance to the plan so that organiza-tional objectives are achieved. Q1-2. Short-range plans usually deal with a period of a quarter or a year, while long-range plans usually cover three to five years. Short-range plans are detailed enough to permit prepara-tion of a complete set of financial statements as of a future date, while long-range plans culminate in a very summarized set of expected results or a few quantified objec-tives, such as financial ratios. Q1-3. Long-range plans contain quantitative results, while strategic plans are the least quantifiable of all plans. Long-range plans usually extend three to five years into the future, while strate-gic plans may contemplate shorter or much longer periods. Long-range plans covering a three-to-five-year period would be prepared every three to five years, or might be system-atically updated each year to maintain a com-plete plan, while strategic plans are formulated at irregular intervals by an essen-tially unsystematic process. Q1-4. Accountability is identical with responsibility accounting. Accountability deals with the dis-charge of an individuals responsibility to achieve assigned objectives within the costs and expenses allowed for the performance and agreed to by the individual. Q1-5. The controller does not control, but aids the control task of the managerial levels by issu-ing reports pointing out deviations from the predetermined course of action. Q1-6. The cost department keeps detailed records of materials, labor, factory overhead, and marketing and administrative expenses; ana-lyzes these costs; issues control reports; pre-pares cost studies for planning and decision making; and coordinates cost and budget data with other departments. Q1-7. For product research and design, the manu-facturing departments need estimates of materials, labor, and machine process costs; for measuring and efficiency of scheduling, producing, and inspecting products, the departments need to know the costs incurred....
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Ch01SM - CHAPTER 1 DISCUSSION QUESTIONS 1-1 Q1-1. Planning...

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