Managerial Accounting Question on Accounting Information, homework help

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Perfgre

Business Finance

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Hi,

This is a managerial Accounting question.

Requirements: To indicate the answers in part 1(a), (b), (c) and 2(a) as stated in the question. APA citation required.

Thank you.

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Question 1 Accounting information is useful for decision-facilitation and decision-influencing. In the decision-facilitating role, accounting information provides relevant information and (or) knowledge to decision makers to make informed decisions while in the decision-influencing role, it is used to incentivise desired actions from decision makers to make decisions that are in line with maximising organizational value. Required: Using not more than 1,000 words (in total) for question 1 to describe the following questions stated below. Reference or bibliography at the end (use APA referencing guidelines). Company: Apple; AAPL (a) Using only Apple company’s functional area (research & development), discuss in detail how accounting information is used to facilitate and influence decision making to maximize firm value. (b) Comment on whether the quality of the accounting information you have described achieve the objective of maximizing the firm value. Your comment on the quality of the accounting information can be based on the attributes of accuracy, timeliness and cost of producing the information. (c) Suggest possible improvements the company can adopt on the quality of accounting information. Question 2 (a) In the context of the company that you have selected in question 1, provide two (2) examples each. Explain the rationale for classifying your examples as direct or indirect costs.
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Explanation & Answer

Hello Buddy, Kindly clarify on question 2 as asked. Kindly do so as soon as possible so that I can finish the work. Thanks

Running head: APPLE COMPANY

1

Accounting Information for Apple Company

Name
Institution Affiliation

APPLE COMPANY

2
Accounting Information for Apple Company

1 (a) Gloria (2008) suggests that accounting information consists source documents,
journals, ledger, income statement and a balance sheet that facilitate and influence decision
making in companies. Accounting information is very essential for the Apple Research and
Development functional area. It guides the decision and policy makers to come up with the most
applicable decisions out of the many alternatives the company might have. Though this
functional area is separate from the marketing, production and other functional areas, they relate
and collaborate to analyze the accounting information.
Apple Company Research and Development staff conducts a thorough study before a
new product is developed. This study includes reviewing the financial documents of the previous
products. Example, before the company produced I-phone 7, it considered the sales and the profit
margin made by I-phone 6. They realized that the I-phone 6 sales were rapidly decreasing due to
competition from other mobile phone producing companies. To counter this, the company
decided to produce I-phone 7 which has advanced features. This attracted more customers hence
the profit realized increased.
The department analyzes the expenses account to determine the production cost (Edwin
et al.,2012). The main objective of Apple Company is to make as much profit as possible. This is
achieved through minimizing the cost and maximizing on income. If the department realizes that
the production cost of the gadget they want to produce outweighs the income likely to be
generated, they do away with that gadget.
The department also deals with the existing product updates and upgrades. Apple Finance
Functional area joins hands with the Research and Development Functional area to stabilize the
financial position of the business. This is done by upgrading their products to satisfy their
customers. Example, the I-tune users complained about the gadget storage capacity. They sought

APPLE COMPANY

3

other alternatives in the market. The Apple Company realized this. In turn, it decided to upgrade
the I-tune storage capacity to support more music. This made them sustain and even attract more
customers.
Apple Company compares accounting information with the other companies in the same
production field. The Research and Development employees use the information to help the
company to remain competitive in the industry. They analyze the gadgets and software other
companies are making and the trends within the industry. This aids the company in making
future-oriented decisions.
Apple Research and Development team works with the Sales and Marketing Functional
Area to determine the selling price of their products. Whenever the Research and Development
department come up with a new gadget, the sales and marketing department set the relatively
lower cost to attract more customers. The two departments use the sales report to determine
where their products are highly demanded hence increasing stock in those areas. They also make
a decision on whether to increase or reduce the selling price of their gadgets.
Accounting information consist returned goods ledger. Apple devices users may return
the gadgets when the gadgets malfunction or when the customers are unable to use them. The
Research and Development team uses this information send their specialists in the field. The
gadget developers and engineers interact with the customers and professionally respond to
complaints. They guide them on how to operate the gadgets. In case there are damaged gadgets,
the team repairs them or replaces them with new ones. This has helped the company to maintain
a good relationship with their customers thus sustaining their financial position.
The research and development function collaborates with the administration function in
collecting, d...


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