ACCY 211 Tutorial 1: Management Accounting in context (1.3, 1.10, 1.

22)

1.3 How can a management accountant help to formulate a strategy?

Management accountants work closely with managers in formulating strategy by providing

information about the sources of competitive advantage; for example, the cost, productivity or
efficiency advantage of their company relative to that of competitors or the premium prices a
company can charge relative to the costs of adding features that make its products or services
distinctive.

1.10 Describe the three guidelines that help management accountants provide the most value to
managers.

The three guidelines that help management accountants provide the most value to managers
including employ a cost-benefit approach, provide full recognition to behavioural and technical
considerations, and use different costs for different purposes.

1.22 Dewhirst Painters is a firm that provides house painting services. Harry Dewhirst, the owner,
is trying to find new ways to increase revenues. Dewhirst performs the following actions, not in
the order listed.

a. Dewhirst calls Johnson’s Hardware to ask the price of paint sprayers. (4)

b. Dewhirst discusses with his employees the possibility of growing revenues of the firm. (1)

c. One of Dewhirst’s project managers suggests that using paint sprayers instead of hand painting
will increase productivity and thus revenues. (2)

d. The workers who are not familiar with paint sprayers take more time to finish a job than they did
when painting by hand. (3)

e. Dewhirst compares the expected cost of buying sprayers to the expected cost of hiring more
workers who paint by hand and estimates profits from both alternatives. (5)

f. The project scheduling manager confirms that demand for house painting services has increased.
(7)

g. Dewhirst decides to buy the paint sprayers rather than hire additional painters. (6)