Horngren’s Cost Accounting A Managerial Emphasis 17th Global Edition by Srikant M. Datar solution ma

 
1-4   Value chain analysis helps organizations to assess their competitive advantage by determining the implications of all strategic activities to the organization. Cost accounting provides the financial analysis of each of the strategic activities. Cost accounting provides the financial estimates by undertaking the following analysis:

1. Internal cost analysis: this involves estimating the cost of each internal value chain process, determining the financial implications and viability.
2. Vertical linkage analysis: this cost analysis estimates the sources of differentiation within internal value-creating processes. Vertical linkages require obtaining information on operating costs, revenues and assets for each process throughout the industry’s value chain.
3. Internal differentiation analysis: this analysis requires the estimation of the effect of cost supplies and other processes within the value chain and the business performance.

 
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 one organization or in multiple organizations.
            Cost management is most effective when it integrates and coordinates activities across all companies in the supply chain as well as across each business function in an individual company’s value chain. Attempts are made to restructure all cost areas to be more cost-effective.
 
1-6  Management accounting is concerned largely with looking at current issues and problems and the future in terms of decision-making and forecasting. As management accounting outputs are mainly for internal users, a confidential report is usually produced before the directors of the company.
Management accounting enables organizations in the following decision-making activities: forecasting revenues and costs, planning activities, managing cost, identification of sources and costs of funding, evaluation of investments, measurement and controlling performance. Management accounting is therefore involved in managing the scorecard of the firm.
Management accounting provides forward-looking information to help managers plan and control operations as they lead the business. This includes managing the company’s plant, equipment, and human resources. 
 
1-7      Management accountants can help improve quality and achieve timely product deliveries by recording and reporting an organization’s current quality and timeliness levels and by analyzing and evaluating the costs and benefits—both financial and nonfinancial—of new quality initiatives, such as TQM, relieving bottleneck constraints, or providing faster customer service.
 
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 selecting organization goals and strategies, predicting results under various alternative ways of achieving those goals, deciding how to attain the desired goals, and communicating the goals and how to attain them to the entire organization.
            Control decisions focus on taking actions that implement the planning decisions, deciding how to evaluate performance, and providing feedback and learning to help future decision making.
 
1-10     The three guidelines for management accountants are:

1. Employ a cost-benefit approach.
2. Recognize technical and behavioral considerations.
3. Apply the notion of “different costs for different purposes.”

 
1-11 Agree. Technical and basic analytical competences are necessary for preparing and interpreting management accounting reports. However, these competencies are insufficient. Management accountants are required to know:

1. how to work well in cross-functional teams and be an efficient business partner;
2. how to possess high integrity, and communicate clearly, openly and candidly;
3. how to lead and motivate people to change and be innovative;
4. how to promote fact-based analysis and make tough-minded, critical judgments without being adversarial.