01 Jan Capital Budgeting

Module 1 discussion

Plant Manager’s Opinion

As a new controller, respond to this comment by a plant manager: “As I see it, our accountants may be needed to keep our records for shareholders and Uncle Sam, but I don’t want them sticking their noses in my day-to-day operations. I do the best I know how. No bean counter knows enough about my responsibilities to be of any use to me.”

Module 2 discussion

Cost-Volume-Profit (CVP)

“There is no such thing as a fixed cost. All costs can be ‘unfixed’ given sufficient time.” Do you agree? What is the implication of your answer for CVP analysis?

Module 3 discussion

Job Costing vs. Process Costing

Many companies need to use both job costing and process costing. Discuss why this may be the case with appropriate examples.

Module 4 discussion

Activity-based Costing (ABC)

“Activity-based costing is the wave of the present and the future. All companies should adopt it.” Do you agree? Explain.

Module 5 discussion

Customer-profitability Profile

“It is not important for a company to distinguish between cost incurrence and locked-in costs.” Do you agree? Explain with the use of appropriate examples.

Module 6 discussion

Contribution Margin Per Unit

“Companies should focus on financial measures of quality because these are the only measures of quality that can be linked to bottom-line performance.” Do you agree? Explain with the use of at least two appropriate examples.

Module 7 discussion

Capital Budgeting (Core Value Assessment)

Capital budgeting is very important in cost and management accounting. Discuss the importance of integrity in the capital budgeting process with the use of appropriate examples.

Module 8 discussion

Budgeted Performance vs. Past Performance

“Budgeted performance is a better criterion than past performance for judging managers.” Do you agree? Explain with appropriate examples.