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Two young and inexperienced MBAs buy a virtually bankrupt company. They design a decentralized control system organized around profit centers. As a case in control systems, there is ample detail for a discussion of design issues, control of independent profit centers, and details about decentralized control. A rewritten version of an earlier case.

A 23-year-old sales executive for a multinational office furniture and supply company was thinking of leaving the company over a dispute regarding her compensation. A friend had suggested setting up her own business: a recruiting agency. The sales executive had known some human resources managers and office managers throughout the years, however, she also realized that it was a very competitive business and she had no experience. She did some cost analysis and had to decide whether it was worth doing. This case could be used as an introduction to management accounting or entrepreneurial finance.

A 23-year-old sales executive for a multinational office furniture and supply company was thinking of leaving the company over a dispute regarding her compensation. After doing some cost analysis on the feasibility of starting a recruiting agency, the young entrepreneur decided it was worth trying. One year later, the company had experienced a successful and profitable first year. This follow-up to the (A) case, 9A99B033, provides the opportunity to compare estimates with actual financial performance.

Supplements the (A) case.

Mauricio Santillan, regional vice president for the Latin American division of Microsoft, has introduced a new performance measurement system to help his country managers formulate and control strategy. Microsoft Latin America's priorities are rolling out of an entirely new corporate database software package and devising a strategy to combat software piracy. Santillan uses the measurement system to motivate country managers to establish locally-relevant strategies that will be aligned with the region's global priorities. This case shows how a Balanced Scorecard system can be useful to help managers in emerging markets learn about the importance of strategy and become better general managers. Also illustrates that a strategic measurement system can be implemented even in an environment where reliable data may be difficult to acquire.

After a manager at Owens & Minor, a national medical and surgical distribution company, proposes and develops a formalized activity-based pricing and activity-based management approach to sales and service provision, this case explore the outcome.

Spreadsheet Supplement for case 100079

A forward-thinking manager at Owens & Minor (O&M), a large national medical and surgical distribution company, enlisted the help of both logistics and cost managers to develop an innovative pricing schedule based on the customer's activities instead of the price of the product since the existing cost-plus pricing structure made it impossible for O&M to price services appropriately. The case also explores the customer resistance to his new proposal.

This case is designed for an introductory MBA management accounting course or an MBA course in management planning and control systems. It provides exposure to (1) the basic assumptions in the creation of an operating plan; (2) analyzing the difference in actual and planned financial results, including the development of flexible expense budgets, quantifying the profit impact of various business risks that impact profit, and preparing a comprehensive reconciliation of actual and planned profit; and (3) thinking through some basic issues associated with performance evaluation of functional managers. The chief executive officer of Bellaire Clinical Labs, Inc., just completed her initial review of the company's 1998 results with the company's chief financial officer. In comparing the 1998 actual results with the 1998 operating plan, the CEO expressed concern because revenues were substantially higher than planned, but those higher revenues did not translate into increased profits. The CFO is asked to investigate.

Supplements the (A) case.

Spreadsheet Supplement for case 100044

CitySoft is a very small software developer that is grappling with issues of cost measurement and management.

The Cambridge Hospital Community Health Network needed to gain a better understanding of its unit-of-service costs, which had been rising at a rate of 10% per year. The network's step-down costing system gave only aggregate costing information, and there was some concern that it might be inaccurately representing the true cost of the intern and resident program, the interpretive services department, and the use of nurse practitioners. So the Primary Care Unit (PCU) initiated a pilot activity-based costing program. The case provides detailed exhibits on the methods of allocating costs using activity-based drivers.

Brierley's is an investment company that has performed poorly in the New Zealand market. Management has prepared a report of the intrinsic value of the company's investments.

Describes alternative approaches to accounting for business activities during periods of inflation. Presents hints and techniques for analyzing financial statements during inflationary periods. A rewritten version of an earlier note.

Covers interim period accounting objectives, theories, and practices. Special financial analysis concerns related to this topic are discussed. A rewritten version of an earlier note.

Discusses global accounting for leases by lessees and lessors with emphasis on U.S. lease accounting standards. A rewritten version of an earlier note.

A U.S. company must decide how to translate its German subsidiary's DM financial statements into U.S. dollars for public and internal reporting purposes. A rewritten version of an earlier case.