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Should rewards be based on accounting results or stock performance? Tying managers’ compensation to stock performance loads uncontrollable risk on them. Using EVA both focuses managers on creating value for shareholders and relies on nonstock performance measures.

25 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 831 | Lượt tải: 1

Managers should be held responsible for direct costs (any cost necessary to operate). They are always deducted for performance evaluation of a division whereas manager evaluation should only include direct costs that are controllable. Similarly, divisions can partially control indirect controllable costs.

28 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 626 | Lượt tải: 0

Most organizations use multiple inputs to produce their output. For example, Massachusetts General Hospital uses a combination of registered nurses, licensed practical nurses, and nurse’s aides to provide nursing care to patients. Bethlehem Steel Company uses a combination of iron ore and other raw materials to make its product. A mix variance ...

28 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 990 | Lượt tải: 0

Typical implications for developing good incentive plans include: developing incentive methods that provide rewards for both accurate forecasts and good performance. rewards that are positively related to forecasted sales to give incentives to forecast high rather than low. additional rewards for employees who beat the forecast and penalties f...

29 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 646 | Lượt tải: 0

Investments in computer-integrated manufacturing are often difficult because of difficulties in applying discounted cash flow methods Hurdle rate too high Should be cost of capital Bias toward incremental projects Uncertainty about operating cash flows Exclusion of benefits that are difficult to quantify More flexibility Shorter cycle and l...

29 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 667 | Lượt tải: 0

JIT is a philosophy, not a tool, that dovetails with total quality management (TQM) in that TQM requires reliable processing systems and disallows defective units. Flexible manufacturing that reduces both setup and inventory levels also enhances JIT.

29 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 778 | Lượt tải: 0

Can separate total costs into fixed and variable Cost and revenue behavior is linear. Implies the following in the relevant range Total fixed costs do not change Variable costs per unit remain constant Selling price per unit remains constant Product mix remains constant over relevant range

29 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 671 | Lượt tải: 0

In general, more sophisticated methods provide more accurate cost estimates than simpler ones. Methods of simplification are Using only one cost driver Assuming cost behavior patterns are linear within the relevant range Assume cost decreases are not “sticky”

28 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 671 | Lượt tải: 0

Break-even time Ignores cash flows after break-even point Does not consider strategic, nonfinancial reasons for new product Varies from one business to next, depending on product life cycles and investment requirements.

28 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 841 | Lượt tải: 0

Ciudad Juarez factory makes 2 products: mountain bikes and racing bikes. 1,000 mountain bikes and 200 racing bikes will be produced. Direct materials include Frames: $100 per mountain bikes and $200 per racing bike Direct labor: $30 per mountain bike and $60 per racing bike Overhead, allocated by activity costs

28 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 598 | Lượt tải: 0