Managerial Accounting

Week 1 - Discussion 1

Exercise 1-9) Zoya Arbiser, regional manager of Gold Medal Sports Shops, is reviewing the results of 15 stores in her region.  Store managers are moved annually.  Each store manager's income is very dependent on the direct contribution margin of that store.  For the past year, Store 9 has been managed by a person who has operated several other profitable stores in recent years and is about to be promoted to a larger store.  Zoya notices several items that bother her.

· Store 9 has almost no personnel training expenses relative to other stores.

· Store 9 has stopped participating in numerous community events that gave the store significant visibility but did incur substantial expenses.

· Store 6, where this store manager worked the prior year, has had a severe drop in profits due to higher operating expenses.

· The advertising budget was spent almost entirely in the first four months of the year, with almost nothing spent in the last several months.

Discuss a possible negative managerial scenario that the regional manager may be sensing. Might the manager of Store 9 be an exceptional manager?  What are the ethical implications of the scenario?  What is the regional manager’s ethical responsibility in this scenario? Explain and support your position with evidence from the text. Your initial post should be 200 to 250 words.

Week 1 - Discussion 2

(Chapter 1 Discussion Question 9(a)) Controller, Judy Koch, in a recent speech said, "I rarely see a real variable cost or a truly fixed cost."  What did she mean?  Include in your response an explanation of the difference in behavior of variable and fixed cost, including an example to illustrate your explanation. Your initial post should be 200 to 250 words.

Week 2 - Discussion 1

In Chapter 3, you were introduced to three types of costs associated with a manufactured product – direct materials, direct labor, and manufacturing overhead.  Explain how these costs are associated with the manufactured product.  Why are some of these costs allocated to the product through costing methods such as job order costing or process costing? As part of your response, please read the article First Solar preview: Manufacturing costs, project order book in the spotlight and provide a specific example of this company’s manufacturing costs. Your initial post should be 200-250 words.

Week 2 - Discussion 2

Explain the similarities and differences between job order costing and process costing.  In your explanation, provide examples of when job order costing and process costing would be most appropriate. Your initial post should be 200 to 250 words.

Week 3 - Discussion 1

Describe the three methods used to allocate joint costs.  What are the advantages/disadvantages of each allocation method?  Which method would you recommend?  Why?  Support your position with evidence from the text or external sources. Your initial post should be 200-250 words.

Week 3 - Discussion 2

As you read in Chapter 8, there are arguments (for and against) variable costing and absorption costing.  Select one of these costing methods and explore the various arguments.  Determine whether you are “for” or “against” this selected method.  Provide evidence from the text to support your position.  Your initial post should be 200-250 words.

Week 4 - Discussion 1

(Exercise 6-13 – Revised) Select one of the following quotes from the text to discuss. Clearly state whether you either agree or disagree with the comment and support your opinion with at least one scholarly resource.  Include in your response an explanation of the major purposes of budgeting.  Your initial post should be 200-250 words.

· "One major criticism of budgeting is that it is used as a ‘cost reduction’ tool rather than a ‘cost control’ tool.  The objective of the budget is to control costs at an efficient level of operation."

· "There are generally three benefits from allowing employees to participate in developing the budget:  (1) Employees tend to accept the budget as their own plan of action.  (2) Participation tends to increase morale among employees and toward management.  (3) Employee cohesiveness is increased, and productivity will also increase if dictated by the group norm."

· "Even though budgets are quantitative tools, considerable emotion is connected to budgeting.  The individual in control often sees the budget as a means of getting things done.  People being controlled often have feelings of anxiety because their success and promotion are tied directly to the budget."

Week 4 - Discussion 2

Using Chapter 7 of your text as a reference, define a standard cost and explain what constitutes the components of a standard cost.  Describe the advantages and disadvantages of a standard cost system and explain under what circumstances a standard cost system is most effective. Your initial post should be 200-250 words.

Week 5 - Discussion 1

Select one of the capital investment evaluation methods described in Chapter 10 of your text.  Fully explain the capital evaluation method’s strengths and weaknesses.  Take a position and defend the use of your selected method.  Be sure to use at least two scholarly sources to support your position.  Your initial post should be 200-250 words.

Week 5 - Discussion 2

(Problem 10-41) Grosvenor Industries has designated $1.2 million for capital investment expenditures during the upcoming year.  Its cost of capital is 14 percent.  Any unused funds will earn the cost of capital rate.  The following investment opportunities along with their required investment and estimated net present values have been identified:

Project             Net Investment               NPV                 Project       Net Investment                  NPV 

            A             $200,000                 $22,000                  F             $250,000                 $30,000

            B               275,000                   21,000                 G              100,000                     7,000

            C               150,000                     6,000                 H              200,000                   18,000

            D               190,000                  (19,000)                I               210,000                     4,000

            E                500,000                    40,000                J              250,000                   35,000

In your response, complete the following:

1.  Rank the projects using the profitability index.  Considering the limit on funds available, which projects should be accepted?

2.  Using the NPV, which projects should be accepted, considering the limit on funds available?

3.  If the available investment funds are reduced to only $1,000,000:

            (a)        Does the list of accepted projects change from Part 2?

            (b)        What is the opportunity cost of the eliminated $200,000?

Week 6 - Discussion 1

When comparing various divisions within a company, describe what problems can arise from evaluating divisions that have different accounting methods, as described in Chapter 11 of your text.  Cite three examples of accounting methods that could cause divisions' profits to differ. Your initial post should be 200-250 words.

Week 6 - Discussion 2

Exercise 12-12) Dr. Steve Rosenthal has his own medical practice. He specializes in the treatment of diabetics. His staff consists of a receptionist, two nurses, a lab technician, and a dietitian. As patients enter the outer office, they check in with the receptionist. The patient then waits until called by a nurse. When called, the patient moves from the waiting room to the inner offices. The patient must weigh in and is then assigned a room. The nurse assigning the patient to a room gathers all the personal data for updating the medical records, such as insulin dosage, medication, illnesses since last visit, etc. The nurse also takes an initial blood sample for blood sugar testing and performs a blood pressure test. The patient then waits until the doctor comes in. After the doctor's conference, the nurse returns to take more blood samples, depending on what is ordered by the doctor. The patient then waits until the dietitian comes to review eating habits and talk about how to improve meal planning and weight control. The patient returns to the receptionist to pay for the office visit and to schedule the next visit.

In your response include the following:

1. Identify the activities in the doctor's office that fall into process time, inspection time, move time, wait time, and storage time.

2. List the activities in the doctor's office that are candidates for nonvalue-added activities. Explain why you classify them as nonvalue-added activities.