Solution Manual for Fundamentals of Cost Accounting 6th Edition By Lanen

Solution Manual for Fundamentals of Cost Accounting 6th Edition By Lanen Solutions to Critical Analysis and Discussion Questions 1-9. We would not agree. The role of accountants is to help manage the organization. Part of that role is to report results. Another part is to design systems that assist other managers in making decisions to improve performance. This role requires that accountants understand how value is created in their organizations. 1-10. The calculation of cost depends on the decision being made. Therefore, the first question to ask is, “What decision (or decisions) are you trying to make?” 1-11. Costs that you could ask to be reimbursed might include the fuel, a share of the maintenance costs, “wear and tear,” or depreciation, and insurance. To avoid disagreements, it would be necessary to negotiate an agreement (even if only informally) between you and your friend considering all factors. For example, you might agree that she should pay for the gas and any other supplies (e.g., oil) needed on the trip. If you are going along, you might change the agreement so that you split these costs. Alternatively, you might say that because you are going anyway, she can ride along for nothing. 1-12. Although it is not the “job” of accounting to determine strategy, accounting provides important information to those who do determine strategy. If the cost accounting system provides inaccurate information, the firm may end up with an unintended strategy, because managers are making decisions based on faulty information. 1-13. Executive performance evaluation systems are designed for a specific company’s needs. The systems should be flexible to adapt to the circumstances that exist in that company. A common set of accounting principles would tend to reduce flexibility and usefulness of these systems. As long as all parties know the accounting basis used by the system, the exact rules can be designed in whatever manner the parties deem appropriate.