Horngren's Cost Accounting, Student Value Edition (16th Edition)
Horngren's Cost Accounting, Student Value Edition (16th Edition)
16th Edition
ISBN: 9780134476032
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Textbook Question
Chapter 1, Problem 1.21E

Key success factors. Vargas Construction Company provides construction services for major projects. Managers at the company believe that construction is a people-management business, and they list the following as factors critical to their success:

  1. a. Increase spending on employee development to streamline processes.
  2. b. Foster cooperative relationships with suppliers that allow for more frequent deliveries as and when products are needed.
  3. c. Integrate tools and techniques that reduce errors in construction projects.
  4. d. Train employees in green construction techniques to appeal to companies seeking LEED certification.
  5. e. Benchmark the company’s gross margin percentages against its major competitors.

Match each of the above factors to the key success factors that are important to managers.

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Key success factors. Vargas Construction Company provides construction services for major projects. Managers at the company believe that construction is a people-management business, and they list the following as factors critical to their success: Increase spending on employee development to streamline processes. Foster cooperative relationships with suppliers that allow for more frequent deliveries as and when products are needed. Integrate tools and techniques that reduce errors in construction projects. Train employees in green construction techniques to appeal to companies seeking LEED certification. Benchmark the company’s gross margin percentages against its major competitors. Match each of the above factors to the key success factors that are important to managers.
Consider an organization that has empowered its employees, asking them to improve the quality, productivity, and responsiveness of their processes that involve repetitive work. This work could arise in a manufacturing setting, such as assembling cars or producing chemicals, or in a service setting, such as processing invoices or responding to customer orders and requests. Clearly, the workers would benefit from feedback on the quality (defects, yields) and process times of the work they were doing to suggest where they could make improvements.  Identify the role, if any, for sharing financial information with these employees to help them in their efforts to improve quality, productivity, and process times. Be specific about the types of financial information that would be helpful and the specific decisions or actions that could be made better by supplementing physical and operational information with financial information.
Classify the following decisions as being characteristic of strategic planning, tactical planning, managerial control, or operational control. Determining the mix of products to manufacture this year Examining whether the number of defective goods manufactured is within a certain range Expanding a product line overseas Determining the best distribution route Examining whether the cost of raw materials is within a certain range Examining whether personnel development cost is rising Employing more automated manufacturing this year Examining whether the amount of scrap material is acceptable Building a new plant facility Examining whether employees’ attitudes are improving Examining whether production levels are within a predicted range Making purchasing arrangements with a new supplier Increasing production capabilities this year by purchasing a more efficient piece of machinery Closing a plant

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Horngren's Cost Accounting, Student Value Edition (16th Edition)

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