the action ( 1-6) according to its step in the five-step decision making process.

Lecture

CASE Study:-We illustrate a five –step decision CASES

1. Planning and Control decision; - Rupa is a book retailing company. Most of its sales are made its own
stores located in shopping mall or in central business centre. A small but increasing percentage of sales is
made via Barnes and Noble .com, in which its major competitor is Amazon.Com. The following five
reports were recently prepared by the management accounting group at Rupa.
1. Annual Financial statements.
2. Weekly report to Vice president of operation for each Rupa store- includes revenues, gross margin,
and operating costs.
3. Study for vice president of new business development of the expected revenues and costs of
barnesandNoble.Com, selling music products (CDs, cassettes, etc 0 as well as books.
4. Weekly report to book publishers and trade magazines on the sales of the top 10 selling fiction and
Non-fiction books at both its own stores and BarnesandNoble.Com
5. Report to insurance company on losses Rupa suffered at its three Gujarat stores due to an
earthquake.

For each report, identify both a planning- decision and a control decision used by a Rupa Manager.

2. Problem Solving, Scorekeeping and attention directing:- for each of the Fallowing activities, Identify the
main role the accountant is performing- Problem Solving, Scorekeeping and attention directing.
1. Preparing a monthly statement of Indian sales for the IBM marketing Vice president.
2. Interpreting differences between actual results and budgeted amounts on a performance report for
the customer warranty department of generic Electric.
3. Analysing for a Mitsubishi international- Manufacturing manager, the desirability of having some auto
parts made in India.
4. Interpreting why a New Delhi distribution centre exceeds its delivery – costs budget.
5. Explaining a Xerox corporation shipping department’s performance report.
6. Preparing for the manager of production control of an Indian steel plant, a cost comparison of two
computerised- manufacturing control system.
7. Prepare a scrap report for the finishing department of a Toyota parts plant.
8. Preparing the budget for the maintenance department of Apollo hospital.
9. Analyzing for a general motors’ product designer the impact on product costs of a new headlight.

3. Five – Step decision making process, manufacturing. : - KFC Foods makes frozen dinners that it sells
through grocery stores. Typical products include turkey, Pot roast, fried chicken and meatloaf. The
managers at KFC have recently proposed a line of frozen chicken pies. They take the fallowing actions to
help decide whether to launch the line.
(a) KFC’s test kitchen prepares a number of possible recipes for a consumer focus group.
(b) Sales managers estimate they will sell more chicken in their northern sales territory than in their
southern sales territory.
(c) Managers discuss the possibility of introducing a new chicken pie.
(d) Managers compare the actual costs of making chicken pies with their budgeted costs.
(e) Costs for making chicken pies are budgeted.
(f) The company decides to introduce a new chicken pie.
(g) To help decide whether to introduce a new chicken pie, the company researches the cost of potential
ingredients.
Classify each of the actions ( a-g) as a step in the Five-step decision making process.

4. Five step decision – Making process, service Firm.

Birla Exterior is a firm that provides house painting services. Aditya Birla, the owner trying to find new ways to
increase revenues. Mr Birla performs the fallowing actions, not in the order listed.

1. Mr Birla decides to buy the paint sprayers rather than hire additional painters.
2. Mr Birla discusses with his employees the possibility of using paint sprayers instead of hand painting
to increase productivity and thus profits.
3. Mr Birla learns of a large potential job that is about to go out for bids.
4. Mr Birla Compares the expected cost of buying sprayers to the expected cost of hiring more workers
who paint by hand and estimates profit from both alternatives.
5. Mr Birla estimates that using sprayers will reduce painting time by 20%.
6. Mr Birla researches the price of paint sprayers on line.

Classify each of making process using the example of the daily News, a newspaper in Mumbai. The daily News
differentiated itself from its customers by using (1) Highly respected journalists who writes well- researched
news articles, (2) colour to enhance attractiveness to readers and advertisers. And (3) a Web site that delivers
up – to- the minute news, interviews, and analysis. The news paper has the fallowing resources to deliver on
this strategy ; an automated, computer – integrated , state of the art printing facility ; a Web- based
information technology infrastructure, and a distribution network that is one of the best in the news paper
industry. To keep up with steadily increasing production costs, Anita, manager of the daily news needs to
increase the company’s revenues. To decide what she should do. Anita works through the five steps – decision
making process.