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College of San Mateo

Accounting 131

Rosemary Nurre

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Group Research Project

   

Group Research Project

Research Projects for Managerial Accounting - 90 points

Please choose one of the following topics to research for your end of semester project. The analysis is due May 17, 2004. Each paper should be approximately 3 - 4 pages in length. This project is worth 90 points and should be done individually.

1. Rutgers University has a web site- RAW (Rutgers Accounting Web) which is a repository of a voluminous accounting data. The address is http://accounting.rutgers.edu. Select two articles that appear on a managerial accounting topic, read them, summarize and comment on them in your own words in a critique approximately 3-4 pages long. Include the issues being discussed and an analysis of the conclusions reached by the authors. Be sure to properly identify and provide citations for the article (including the web addresses accessed to read the article) in your submission.

2. Many businesses accumulate costs for each job performed. Examples of businesses that use a job order costing system include print shops, car repair shops, insurance firms, health (medical/dental) clinics, and kennels. Visit a local business that uses job order costing, and interview the owner, manager, or accountant about the process and the documents the business uses to accumulate product costs. Write a paper that summarizes the information you obtained. Include the following items in your written summary:

a. The name of the business and the type of operations performed.
b. The name and position of the individual you interviewed.
c. A description of the process of starting and completing a job.

a. How do you assign the cost of direct labor to each job?
b. How do you assign overhead to individual jobs?
c. How do you assign the cost of direct materials to each job?
d. How do you determine what to charge each customer?

d. A description of the accounting process and the documents used to track a job.
e. Compare the documents discussed in the textbook to the documents used in the company that you visited. How are they similar and how are they different?
f. In your opinion, does the business record and accumulate its product costs effectively? Explain. Do you have any suggestions for improving the approach that you observed?

3. There are numerous examples of ABC applications in the real world. A good source of ABC case studies for various industries is found at http://www.abctech.com. Access that site and select success stories. Within the process or discrete manufacturing category, choose a firm and then read about its experience with ABC. Next, select the services category, choose a service firm, and read about its implementation of an ABC system. Answer the following questions about the two cases:

a. What were the reasons offered for implementing ABC?
b. What implementation procedures were used?
c. How many activities were identified?
d. What types of benefits (results) were achieved by each company?
e. What problems were mentioned, if any?
f. What is the major cause of failure of many ABC implementations?


4. The usefulness of standard costing has been challenged in recent years. Some claim that its use is an impediment to the objective of continuous improvement (an objective that many feel is vital in today's competitive environment). Write a short paper that analyzes the role and value of standard costing in today's manufacturing environment.

Address the following questions:

a. What are the major critcisms of standard costing?
b. Will standard costing disappear, or is there still a role for it? If so what is the role?
c. Given the criticisms, can you explain why its use continues to be so prevalent? Will this eventually change?
d. What are some suggestions for redesigning the standard cost systems fo they are more relevant for advanced manufacturers?
e. How compatible are ABC and standard costing?
f. If standard costing is no longer suitable for some manufacturing environments, what control approaches are being used to supplement (replace) the functions-based control model?


5. In a similar sense as companies, the US government must prepare a budget each year. However, unlike private, for-profit companies, the budget and its details are available to the public. The entire budgetary process is established by law. The government makes available a considerable amount of information concerning the federal budget. Most of this information can be found on the Internet. Using the internet resources (e.g., consider accessing the Office of Management and Budget) answer the following questions:

a. When is the federal budget prepared?
b. Who is responsible for preparing the federal budget?
c. How is the final federal budget determined? Explain in detail how the government creates its budget.
d. What percentage of the gross domestic product (GDP) is represented by the federal budget?
e. What are the revenue sources for the federal budget? Indicate the percentage contribution of each of the major sources.
f. How does our spending as a percentage of the GDP compare to other countries?
g. How are deficits financed?


6. The April 2000 issue of the Journal of Accountancy contains an article by Lawrence B Macgregor Serven entitled "The Planning Peril." You can find this article via the following website: http://www.findarticles.com

Read the article and answer the following questions.


a. Describe the three reasons why revamping the planning process can be perilous.
b. What four recommendations does the author provide to improve the chances of success of efforts to revamp the planning and budgeting process?
c. Review the sample survey. Identify what you believe are the three most important questions in this survey, and explain why you think they are important.

7. The February 2000 issue of the Journal of Accountancy contains an article by Russ Banham entitled "Better Budgets." You can find this article via the following website: http://www.findarticles.com

Instructions:
Read the article and answer the following questions.

a. Why have some companies decided not to do major overhauls of their budgeting systems after some initial investigations into the possibility? What percentage of companies that attempt overhauls give up before finishing?
b. What is the 'new planning paradigm'?
c. What does the author argue is the 'final link' necessary for successful budgeting and planning?

8. The Government Performance and Results Act of 1993 requires all federal agencies to establish strategic plans and develop methods for measuring the performance of strategic initiatives. In other words, federal agencies must implement a strategy based responsibility accounting system. One possibility that is being explored for satisfying this mandate is the use of the Balanced Scorecard. This strategic management approach has been successfully used in the private sector. However, in governmental settings, outcomes are based on mission success rather than financial success. This fundamental difference creates a number of interesting questions:

a. Can the Balanced Scorecard be adapted to fit a governmental setting?
b. If so, how is it adapted (i.e., what are the changes)?
c. Are there any successful applications of the Balanced Scorecard in state or federal government agencies?
d. What are examples of core measures? Of lead indicators?
e. What are the desired characteristics of measures in the government sector?
f. What are the limitations or weaknesses of this approach for this setting?

Search the internet to obtain information that will allow you to answer the above questions. You might start with http://www.balancedscorecard.org, the homepage of the Balanced Scorecard Institute. The Balanced Scorecard Institute is a non-profit source of information about applications of the Balanced Scorecard in government. Its mission is to serve as a Web clearinghouse for government managers to exchange information, ideas, and lessons learned in building strategic management systems using the Balanced Scorecard approach.

9. Debate the relative merits of budgeting. Discuss and define the difference between the operating and capital budget. Identify and research three companies and discuss how they use the budget to manage their business. How are the overall budget goals set? What is the process used to build the budget? Who does it? How much input do operating managers have in the process? How long does it take to build a budget? What are the main benefits of budgeting? How are budgets used? How has technology helped them to budget? Why would a company not want to budget?

10. Research three companies that have adopted Just-In-Time (JIT). Discuss the benefits, if any, that the companies expect to derive from the system and benefits that the company has actually realized thus far. Also discuss how JIT was implemented and any problems that the firm encountered. What information is required from customers? How did technology affect the decision to implement JIT? Your presentation should include a discussion of what JIT is and the situations where it is most successful. Why wouldn't a firm want to adopt JIT?

11. Identify three companies in your local area that are likely to use standards such as a commercial bakery, auto repair shop, chain restaurant, or manufacturer. After verifying that the company uses standards, make an appointment to meet with the manager, controller, or chief financial officer of the organization.

At the scheduled meeting, find out the answers to the following questions:

  1. How and by whom are standards set?
  2. Are standards practical or ideal?
  3. How are standards used?
  4. What are the consequences of unfavorable variances? Of favorable variances?
  5. Do the standards and variances create any potential problems?

Your presentation should include a discussion of what standards are and how they should be used.

Please site at your sources. Submit evidence of sources you have identified.

 

 

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