Required:

Select the managerial accounting objective$($s$)$ that are applicable for each scenario: planning, controlling $($including performance evaluation$),$ or decision making.

a$.$ Laboratory Manager: An HMO approached me recently and offered us its entire range of blood tests. It provided a price list revealing the amount it is willing to pay for each test. In many cases, the prices are below what we normally charge. I need to know the costs of the individual tests to assess the feasibility of accepting its offer and perhaps suggest price adjustments on some of the tests.

$$

b$.$ Operating Manager: This report indicates that we have $30\%$ more defects than originally targeted. An investigation into the cause has revealed the problem. We were using a lower$-$quality material than expected, and the waste has been higher than normal. By switching to the quality level originally specified, we can reduce the defects to the planned level.

$$

c$.$ Divisional Manager: Our market share has increased because of higher$-$quality products. Current projections indicate that we should sell $25\%$ more units than last year. I want a projection of the effect that this increase in sales will have on profits. I also want to know our expected cash receipts and cash expenditures on a month$-$bymonth basis. I have a feeling that some short$-$term borrowing may be necessary.

$$

d$.$ Plant Manager: Foreign competitors are producing goods with lower costs and delivering them more rapidly than we can to customers in our markets. We need to decrease the cycle time and increase the efficiency of our manufacturing process. There are two proposals that should help us accomplish these goals, both of which involve investing in computer$-$aided manufacturing. I need to know the future cash flows associated with each system and the effect each system has on unit costs and cycle time.