Submitted by:

Antonio

Raz

Tolosa

GROUP 2

1-18. Value chain and classification of costs, pharmaceutical company

a. Marketing

b. Design of Products and Processes

c. Customer Service

d. Research and Development

e. Marketing

f. Production

g. Marketing

h. Distribution

1-23. Planning and control decisions.

a. Planning

b. Planning

c. Control

d. Planning

e. Control
1-29. Strategic decisions and management accounting.

1. a. Product Differentiation Strategy

b. Cost Leadership Strategy
c. Cost Leadership Strategy
d. Product Differentiation Strategy

2. a. There are numerous varieties of anti-aging facial creams sold in the market,
but there are only few that are made from natural ingredients just like what Stila
Cosmetics is considering to introduce to the public. As to their source of
competitive advantage, the managerial accountant can provide information
regarding the costs of the materials and production of the anti-aging creams.
Also, he can report their target price in launching the product in comparison to
the prices offered by their contemporaries through benchmarking.

b. Some of the information the managerial accountant can provide about the
source of competitive advantage of Kontron Computers when they use the cost
leadership strategy include the amount of costs they will be able to cut in
producing a special type of microprocessor, the expected expense in purchasing
or designing the equipment which will be used to make those microprocessors,
and also the reaction of their customers and prospective customers regarding the
price of the microprocessors because customers often weigh the quality of
products based on their prices, causing some to conclude that cheaper products
are poorer in quality compared to their competitors who offer higher prices.

c. If Pelican Industries decides to install bio-metric systems in its factory, some of

the information the managerial accountant can provide include the cost-benefit in
installing such system, if adequate cash will be available to fund the installation
of bio-metric systems or should the company generate additional funds, and how
the installation will affect the costs of the products they are offering considering
they are targeting to reduce idle time and increase productivity.
d. The managerial accountant can provide information regarding the price the
company targets to charge for the telemedicine facility, if the number of
prospective customers is sufficient to be profitable in introducing the said facility,
what price can they charge to be competitive, and what fraction the additional
service will take in the overall increase in sales of services by Coral Health
Solutions.

1-36. Professional ethics and end-of-year actions.

1. The snack-foods division is expecting only 8% annual earnings growth
which is lower compared to the estimated 10% for Daniel Foods which
dissatisfies the division president, Mr. Ray. In order to raise the possibility of
increasing their division’s annual earnings growth, he decided to lessen the
expenses they will report through deferring the monthly maintenance on
packaging equipment for December until January next year and also deferring
the advertising expenses, also he wanted to extend the current fiscal year
and give double bonus to salespeople who exceed the target sales in order to
boost the amount of sales their division will record in their Statement of
Income.
Other possible reasons which may have motivated Mr. Ray to pursue
end-of-year actions include wanting their division to be recognized in terms of
performance in meeting or exceeding annual earnings growth rate
estimations, giving rise to the promotion of his people, and to give incentives
to employees who are performing well.
2.

ACCEPTABLE UNACCEPTABLE
A Deferring monthly maintenance for
a month is not considered to be
against the Standards of Ethical
Behavior for Practitioners of
Management Accounting and
Financial Management.
 B Extending the close of the current
fiscal year is unethical because it
promotes the false reporting of the
current year’s sale.
C Altering dates of shipping documents
to record January sales as December
sales is a form of disregarding
credibility through falsification of
documents.
D Giving double bonus to
salespeople who exceed the target
sales is acceptable because it is a
normal practice to boost sales for
the remaining weeks of the
accounting year.
E Deferring television advertising to
reduce the amount of expenses to
be recorded does not defy any
ethical standards.
F Deferring current period’s advertising
costs to the next period is against the
required credibility because it will
hinder the fair and objective reporting
of financial information.
G Persuading carriers to accept
merchandise for shipment is an
acceptable strategy to boost sales,
unless there is bribery involved for
the carriers to accept even if it is
against their will.

3. Some of the end-of-year actions are acceptable as per determined in

the previous question, but if Mr. Ray forces Butler to perform the ones
identified as unacceptable under the Standards of Ethical Behavior for
Practitioners of Management Accounting and Financial Management, then
Butler must stand firmly on her beliefs and directly consult with Ray regarding
her opinions and principles. If Mr. Ray refuses to hear her pleas, then Butler
may communicate to the next person in the hierarchy. As a division controller,
she must not lose sight of what must be done in her job, which is to
communicate precisely what should be in the Financial Statements of the
company. If she finds herself disregarded even after talking to the higher ups,
Butler may choose to resign to appease her integrity. There are many more
opportunities waiting for a highly ethical employee which she can pursue.
If the job she has drives and pushes her to go against her professional
ethics which she upholds so much, then the job is not worth keeping if she’s
going to lose herself.