Question

For each of the following​ items, identify which of the management accounting guidelines​ applies: cost-benefit​ approach, behavioral and technical​ considerations, or different costs for different purposes.
a. Changing an employee bonus plan to include additional paid time off in response to a changing employee demographic.
b. Deciding whether to sell products directly to customers in a new overseas market or to hire a distributor.
c. Introducing a participatory budgeting that involves lower-level managers.

Answer 1

Answer:

Identifying the management accounting guideline that is applicable to each item:

a. Changing an employee bonus plan to include additional paid time off in response to a changing employee demographic.

Different costs for different purposes

b. Deciding whether to sell products directly to customers in a new overseas market or to hire a distributor.

Cost-benefit​ approach

c. Introducing a participatory budgeting that involves lower-level managers.

Behavioral and technical​ considerations

Explanation:

Management Accounting Guidelines:

a. Cost-benefit​ approach: This approach specifies that managers must compare the expected benefits and expected costs of an action before reaching a decision.

b. Behavioral and technical​ considerations: This approach involves using the desired information to make wise economic decisions that will ginger workers to contribute their efforts towards attaining organizational goals.

c. Different costs for different purposes:  There are different reporting purposes.  The cost that is reported externally may not be useful for internal decisions.  This means that the cost may have to be reported in another format to make the information useful to management.