Management and Cost Accounting, 10th Edition Solution Manual

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SOLUTIONS TO REAL WORLD VIEWS QUESTIONSREAL WORLD VIEWS 1.1Chartered institute of management accountants (CIMA)–activities andskillsQuestion1.Provide more detailed illustrations for each of the first four items in the firstcategory of the above list of how the management accountant can be ofassistance in an organization with which you are familiar.Outline answer1.Advise managers about the financial implications of projectsManagement accountants aim to provide information to help managersmake better decisions by providing financial information on the profitabilityand risks to be considered when evaluating alternative projects. The finaldecision will be taken by senior managers based on the information providedand the advice given by the management accountant. The role of themanagement accountant tends to be as an information provider rather thana decision-maker, although the management accountant is likely to have avery significant influence on the decisions made by senior management.Explain the financial consequences of business decisionsBesides providing written reports on the financial consequences of thealternatives decisions being considered the management accountant shouldalso verbally explain and interpret the information provided to seniormanagers. In particular, the management accountant acts as an advisor byproviding business support to mangers relating to the financial and the non-financial consequences of alternatives being considered.Formulate business strategyA business strategy relates to the courses of action that must be taken toachieve an organization’s overall objectives. Management accountants arefrequently members of the senior management team that identify thosestrategic options that have the greatest potential for achieving the company’sobjectives. In order to make an informed choice regarding the alternativestrategies management accountants generate data relating to alternativestrategies. For example, information may be generated relating to:•The projected growth rates of the alternatives being considered•The market share the company is likely to achieve•The profits for each alterative being considered.Monitor spending and financial controlTo monitor performance, the management accountant provides feedbackinformation in the form of performance reports relating to activities forwhich managers are responsible. These performance reports compare actual

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