Basics Of Managerial Accounting

Question 1

Value Chain Analysis

Answer 1

Value Chain is a sequence of business functions in which customer usefulness is added to products.

Research and Development - generating new product

Design -

Production -

Marketing and Sales -

Distribution - processing and shipping

Customer Service - after sales + Customer Relationship

Question 2

Key drivers of successful business strategy

Answer 2

1-Cost + efficiency

1-Quality

1-Time

2-Innovation

2-Sustainability

Question 3

Controlling

Answer 3

Strongly defined by researchers, academic discussions and theory

Question 4

Managerial Accounting

Answer 4

Strongly defined by businness practice

Question 5

Principal-Agent-Theory

Answer 5

Principal-Agent-Theory analyzes economic and business relationships in which one partner has a relevant
knowledge advantage toward the other partner.

Assumptions:
Principal delegates job
Agent has more knowledge
Information asymmetry
Adequate types of contracts can help

Problems:
Moral Hazard - hidden effort/information while agent knows this is harmful for company (agent goes home earlier)
Adverse Selection - Employee has more knowledge than Employer -> Employer will only offer an average contract to him, He is very skilled, and will reject the offer -> best qualities leave the market

Remedies:
Contract design - small fixed salary and significant bonus for achieving something
Screening - finding out as much as possible about the agent
Signalling - revealing as much as possible about agent’s qualities

Question 6

5-step decision-making system

Answer 6

1. Identify problems and uncertainties
2. Obtain Information - better understanding of uncertainties
3. Make predictions about the future
4. Make decisions by choosing among alternatives
5. Implement decisions, evaluate performance and learn