Solutions for Williams

Chapter 16

Exercise 16.8

|The Bastile Furniture Company’s management accounting system has these three problems: |

|1. | The decision-making authority for incurring costs at the plant level is not under the complete control of Sheila. … This could be|

| |fixed by adjusting the budget for the actual number of units produced. |

|2. |The accounting reports are not designed to help support decision making, in terms of reporting period. |

|3. |The current use of the accounting information in performance evaluation might motivate poor decision making by Sheila. For |

| |example, in order to meet the end of year budget, Sheila might decide to delay some purchases or repairs on some equipment until |

| |the next year. These delays might not be in the best interest of the company. Including in the performance evaluation other |

| |measures like employee turnover, customer perceptions of furniture quality, etc. would improve the plant outcomes. |

Case 16.4

Q107- Done in class

Chapter 22

Ex. 22.10

|(1) |Profit center |

|(2) |Cost center |

|(3) |Investment center |

|(4) |Profit center |

|(5) |Profit center |

|(6) |Cost center |

Ex. 22.11

The point is that Harry’s response is not appropriate....