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

 
1-12 The new controller could reply in one or more of the following ways:

1. Explain to the plant manager how he or she could benefit from activities and tasks performed by accountants and the controller such as ‘reporting and interpreting relevant data’ and highlight how the controller can influences the behavior of all employees and helps line managers make better decisions.
2. Demonstrate to the plant manager how accountants and the controller can help them with Global Financial Planning/Budgeting and making correct decision/s when there is a variation between budgeted costs and actual costs.
3. Demonstrate to the plant manager how accountants and the controller can help them in identifying and analyzing problem situations and evaluating financial and nonfinancial aspects of different alternatives, such capital budgeting, make or buy decisions, special prices, outsourcing decisions, product-mixed decisions, etc.
4. Demonstrate to the plant manager that what accountants and the controller can do is not a duplication of what accounting software and packages are capable of, and provide them with a list of activities which need more in depth insights from accountants and the controller such as customer satisfaction reporting, profitability reporting, performance reporting and etc.
5. Explain that while the existing accounting software is able to provide information for the smooth operation of current operational activities, the controller would be able to provide information that would help the manager to become aware of and prepare for shifts in the external environment, which would require changes in production processes.

 
1-13       The controller is the chief management accounting executive. The corporate controller reports to the chief financial officer, a staff function. Companies also have business unit controllers who support business unit managers or regional controllers who support regional managers in major geographic regions.
 
1-14 1. Setting professional ethical standards is important due to the following facts:

• They offer confidence in the employee-employer affiliation,
• Standards embody a locus point of reference for management accountants confronted with ethical impasses;
• They allow for an assurance to the information users that the quality and integrity of the information made available by the management accountants is without doubt.

2. The five fundamental principles of ethics for professional management accountants as advanced by the Chartered Institute of Management Accountants (CIMA) are:
 
There are five fundamental principles of ethics for professional management accountants:
(a) Integrity — to be straightforward and honest in all professional and business relationships
(b) Objectivity — not to compromise professional or business judgments because of bias, conflict of interest or undue influence of others.
(c) Professional competence and due care to:
(i) Attain and maintain professional knowledge and skill at the level required to   ensure that a client or employing organization receives competent professional service, based on current technical and professional standards and relevant legislation; and
(ii) Act diligently and in accordance with applicable technical and professional   standards.
(d) Confidentiality - to respect the confidentiality of information acquired as a result of professional and business relationships.
(e) Professional behavior — to comply with relevant laws and regulations and avoid any conduct that the professional accountant knows or should know might discredit the profession.
 
1-15 When basic ethics is weak, suppliers might not improve the quality of their products or lower the costs while at the same time win supply contracts by bribing executives. This situation can lead to customers’ dissatisfaction when they receive low quality products at a high price.  When the quality of products is low, customers are discouraged to buy them, causing the market to fail.
            The price of products increases as a result of higher prices (which incorporate the bribes) paid to suppliers while fewer products being produced and sold.
 
1-16 Choice ‘c’ is correct.  Preparation of financial statements and cash flow statement are not the responsibilities of the management accountant. This is usually handled by the financial accountant.
Choice ‘a’ Preparation of cost estimates, project planning, and analysis, Choice ‘b’ Budgetary controls and investigation, and Choice ‘d’ Performance evaluation and reporting are all duties of the management accountant.