As controller of Patriot Steel, you have been asked to provide information to management that would be helpful in answering a variety of questions.
Required:
a. For each of the questions below, classify the needed information as being an example of either full cost accounting, differential accounting, or responsibility accounting.
(1) Should the company own and operate its own iron ore mines or buy the ore from another firm?
(2) As a result of a new labor contract with the United Steel Workers Union, what will be the profit margin on a ton of steel at current prices?
(3) Is the supervisor of the maintenance shop doing a good job?
(4) How much money does the company have invested in finished goods inventory?
(5) Should the company consider replacing its old open-hearth furnaces with new ones?
(6) Which district sales manager is doing the best job?
b. In addition to management accounting information, what other types of information might be useful in attempting to answer each of the above questions?