Managerial Accounting
16th Edition
ISBN: 9781259995484
Author: Ray Garrison
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter P, Problem 12E
EXERCISE P-12 Cognitive Bias and Decision Making
During World War II,the U.S. military was studying its combat-tested fighter planes to determine the parts of the plane that were most vulnerable to enemy fire The purpose of the study was to identify the most vulnerable sections of each plane and then take steps to reinforce those sections to improve pilot safety and airplane durability The data gathered by the U.S.military showed that certain sections of its combat-tested fighter places were consistently hit more often with enemy fire than other sections of the plane.
Required:
- Would you recommend reinforcing the sections of the plane that were hit most often by enemy fire, or would you reinforce the sections that were hit less frequently by enemy fire? Why?
- Do you think cognitive bias had the potential to influence the U.S. military's decision-making process with respect to reinforcing its fighter planes? Source: Jerker Denrell,"Selection Bias and the Perils of Benchmarking,” Harvard Business Review, Volume 83,Issue 4, pp. 114-119.
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Question 3
Though COVID-19 has affected the majority of companies and individuals worldwide, to some companies; the pandemic is regarded as a window of business opportunity. Simox Pharmaceuticals Cc is one of the few Namibian companies that are locally manufacturing hand sanitizers for use in the fight of COVID-19. The hand sanitizers are produced in masses through a process costing system. The following information was extracted from the company’s records for the month ended 31 August 2020
Description
units
N$
work in progress - 1 july 2020
2000
- materials 100% complete
-
50000
- Coversion 80%
-
45000
During the month
units introduced to production
80000
-
work in progress - 31 August 2020 - Material 100% complete…
35
Which of the following statement is correct?
a.
Target technique ensures that the product is introduced to the market with a specific functionality, quality, and selling price
b.
Target costing involves the establishment of target costs for each product and each product- related activity, starting with the design of the product and culminating with the sale of the product
c.
All of these
d.
Implementation of a new computerized system, there is not only the initial cost of purchasing it. There will be; Training costs of staff to operate the system
Clear my choice
#2 Which of the following would be an example of a research and development expenditure eligible for the R&D credit?
a. Marketing research for a new project.
b. Research to technologically improve an existing product.
c. Research to alter design after commercial production has begun.
d. Research to adapt existing component to a large customer's personal requirements.
e. Routine testing for quality control of an existing product.
Nee
Chapter P Solutions
Managerial Accounting
Ch. P - Prob. 1QCh. P - Pick any major television network and describe...Ch. P - If you had to decide whether to continue making a...Ch. P - Why do companies prepare budgets?Ch. P - Why is managerial accounting relevant to business...Ch. P - Why is managerial accounting relevant to...Ch. P - Pick any large company and describe its strategy...Ch. P - Why do management accountants need to understand...Ch. P - Prob. 9QCh. P - Prob. 10Q
Ch. P - Prob. 11QCh. P - Locate the website of any company that publishes a...Ch. P - Why do companies that implement Lean Production...Ch. P - Why are leadership skillsimportant to managers?Ch. P - Prob. 15QCh. P - Prob. 16QCh. P - Prob. 17QCh. P - What internal controls would you implement to help...Ch. P - Why do companies take a physical count of their...Ch. P - Why do companies use sequential prenumbering for...Ch. P - Prob. 1ECh. P - Assume that you work for an airline unloading...Ch. P - Prob. 3ECh. P - EXERCISE P-4 Ethics and the Manager Richmond,...Ch. P - Prob. 5ECh. P - Prob. 6ECh. P - Prob. 7ECh. P - Prob. 8ECh. P - Prob. 9ECh. P - Prob. 10ECh. P - Prob. 11ECh. P - EXERCISE P-12 Cognitive Bias and Decision Making...Ch. P - Prob. 13E
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- The fundamental concept behind strategic performance measurement systems is that an organizations strategy can be represented by a set of performance measures. This basic concept of representing a complex idea (like strategy) with something more tangible (like a measure) goes back hundreds, even thousands of years. Platos Allegory of the Cave provides perhaps the first evidence of this concept. In the allegory, Plato describes a hypothetical scenario in which a group of prisoners is chained to a wall inside a cave, locked in a position facing away from the cave opening. Plato explains that the prisoners have been in this condition their entire lives so their knowledge of the outside world is limited to what they are able to perceive in their current state staring only at the cave wall. Plato then describes how sunlight from the outside casts shadows of anything that passes by the cave opening into the cave. These shadows appear on the wall that the prisoners are facing, and sounds from the outside echo off the shadowed wall. Plato explains that, to the prisoners, reality is not outside the cave but the shadows are reality. To them, sounds dont come from the outside but rather from the shadows on the wall before them. Plato then goes on to discuss the status of a prisoner freed from this bondage and his initial reaction to exposure to a different reality. Plato says, Will he not fancy that the shadows which he formerly saw are truer than the objects which are now shown to him? This allegory illustrates that reality can really only be indirectly perceived via imperfect representations of reality. That is what accounting is all about. Accounting measures are imperfect representations of economic ideas that cannot be seen directlyjust like Platos shadows in the cave. Accounting measures are merely reflections of more interesting and important concepts. Consider financial statements and answer the following: Why do people care about what is on a firms balance sheet or income statement? Are they really interested in the financial statements in and of themselves, or do they use the financial statements to learn something about the issues they really care about? What are some of those issues?arrow_forward38 - Which of the following statements about human resource planning is correct? a) Resistance to changes in human resource planning is a challenge for the business. B) The most widely used estimation methods are numerical-statistical methods. NS) Human resources commonly make plans in the middle (1-5 years) range. D) The most preferred method of subjective forecasting is trend analysis. TO) Organizational competencies inventory is among the external environmental factors in human resources planning.arrow_forwardQUESTION 43 The ____ was deliberately designed to measure outputs, without taking into account their beneficial or harmful environmental impacts. a. genuine progress indicator b. free market c. gross domestic product d. market pricing structure e. government subsidy systemarrow_forward
- Examine the last column in Table 8.2 (p. 280) for the following personnel only: access control officer, chief information officer (CIO), structural security/disaster recovery manager, testing/quality assurance, and database administrator. For each of the five functions, list one control plan from this chapter that would address the control concern described in the last column of Table 8.2 (p. 280) for that function. Explain how the plan might address the concern mentioned. Do not use the same plan twice; use five different plans.arrow_forwardRefer to Problem 14.41. In the environmental benefits section of the report, three types of benefits are listed: income, savings, and cost avoidance. Now, consider the following data for selected items for a four-year period: The engineering design costs were incurred to redesign the production processes and products. Redesign of the product allowed the substitution of a material that produced less ozone-depleting substances. Modifications in the design of the processes also accomplished the same objective. Because of the improvements, the company was able to reduce the demand for pollution control equipment (with its attendant depreciation and operating costs) and avoid fines and litigation costs. All of the savings generated in a given year represent costs avoided for future years. The engineering costs are investments in design projects. Once the results of the project are realized, design costs can be reduced to lower levels. However, since some ongoing design activity is required for maintaining the system and improving it as needed, the environmental engineering cost will not be reduced lower than the 90,000 reported in 20x5. Required: 1. Prepare a partial environmental financial statement, divided into benefit and cost sections for 20x3, 20x4, and 20x5. 2. Evaluate and explain the outcomes. Does this result support or challenge ecoefficiency? Explain.arrow_forward10.2 Explain how independent performance evaluation procedures are either violated or ef- fectively applied in each of the following situations. Identify the problem and suggest the check required (or applied) to prevent the identified problem from occurring. a. The manager who oversees the corporate fleet vehicles signed off on the purchase of 15 luxury SUVs to expand the company's fleet of cars. As soon as this was done, he instructed that the payment be made. b. At a newly opened local restaurant, waiters work six-hour shifts. There are three six- hour shifts per day, with each shift overlapping the next. The restaurant currently has two cash registers and these can be operated by any one of the waiters during a shift without them requiring any form of identification. The new manager has decided that the cash in the cash register box will be checked once every 24 hours, i.e., in the mornings before the new shift for the day begins. c. A company's financial clerk does a spot check of…arrow_forward
- 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 plantarrow_forwardRefer to Problem 14.43. In 20x3, Jack Carter, president of Kartel, requested that environmental costs be assigned to the two major products produced by the company. He felt that knowledge of the environmental product costs would help guide the design decisions that would be necessary to improve environmental performance. The products represent two different models of a cellular phone (Model XA2 and Model KZ3). The models use different processes and materials. To assign the costs, the following data were gathered for 20x3: During 20x3, Kartels division produced 200,000 units of Model XA2 and 300,000 units of Model KZ3. Required: 1. Using the activity data, calculate the environmental cost per unit for each model. How will this information be useful? 2. Upon examining the cost data produced in Requirement 1, an environmental engineer made the following suggestions: (1) substitute a new plastic for a material that appeared to be the source of much of the hazardous waste (the new material actually cost less than the contaminating material it would replace), and (2) redesign the processes to reduce the amount of air contaminants produced. As a result of the first suggestion, by 20x5, the amount of hazardous waste produced had diminished to 50 tons, 10 tons for Model XA2 and 40 tons for Model KZ3. The second suggestion reduced the contaminants released by 50 percent by 20x5 (15 tons for Model XA2 and 110 tons for Model KZ3). The need for pollution equipment also diminished, and the hours required for operating this equipment for Model XA2 and Model KZ3 were reduced to 60,000 and 200,000, respectively. Calculate the unit cost reductions for the two models associated with the actions and outcomes described (assume the same production as in 20x3). Do you think the efforts to reduce the environmental cost per unit were economically justified? Explain.arrow_forward
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