© The McGraw-Hill Companies, Inc., 2018
10 Managerial Accounting, 16th Edition
Exercise P-5 (60 minutes)
Company Strate
g
y
1. Deere Product leadership:
“
Nothin
g
runs like a
Deere”
“
g
“
T
5.
A
mazon.com Operational excellence: Hu
g
e selection of
“
T
“
© The McGraw-Hill Companies, Inc., 2018. All rights reserved.
Solutions Manual, Prologue 11
Exercise P-6 (15 minutes)
Industry
Example of Business
Risk
Example of Contro
l
to
Reduce the Business
Risk
A
irlines
A
n airplane mi
g
ht
crash.
Implement a
preventive
maintenance program.
Pharmaceutical dru
g
s
A
customer mi
g
ht be
harmed by a drug.
Desi
g
n tamper-proof
packaging.
T
’
A
A
A
© The McGraw-Hill Companies, Inc., 2018
12 Managerial Accounting, 16th Edition
Exercise P-7 (20 minutes)
1. If all automotive service shops routinely tried to sell parts and services
to customers that they didn’t really need, most customers would
2. As argued above, if customers could not trust their service
representatives, they would be reluctant to follow the service
© The McGraw-Hill Companies, Inc., 2018. All rights reserved.
Solutions Manual, Prologue 13
Exercise P-8 (10 minutes)
1. The type of cognitive bias revealed by this data is called self-
2. This bias may cause managers to be overly-optimistic when making
plans for the future. This bias might also cause managers to readily
3. Managers can help reduce the potential adverse consequences of self-
© The McGraw-Hill Companies, Inc., 2018
14 Managerial Accounting, 16th Edition
Exercise P-9 (20 minutes)
The purpose of this exercise is to present students with an opportunity to
debate the ethicality of competing courses of action. Some students may
© The McGraw-Hill Companies, Inc., 2018. All rights reserved.
Solutions Manual, Prologue 15
Exercise P-10 (20 minutes)
The purpose of this exercise is to create a platform for students to debate
the merits of the shareholder-focused and stakeholder-focused
© The McGraw-Hill Companies, Inc., 2018
16 Managerial Accounting, 16th Edition
Exercise P-11 (20 minutes)
1. This question gives students a platform for discussing the merits of
2. This question gives students an opportunity to discuss the roles of
3. This question gives students an opportunity to discuss the
© The McGraw-Hill Companies, Inc., 2018. All rights reserved.
Solutions Manual, Prologue 17
Exercise P-12 (20 minutes)
1. Most students are likely to recommend reinforcing the sections of the
2. Perceptive students may realize that this is a classic case of selection
During World War II, statistician Abraham Ward recommended that the
Note: The above quote appears on page 118 of Jerker Denrell’s article
© The McGraw-Hill Companies, Inc., 2018
18 Managerial Accounting, 16th Edition
Exercise P-13 (20 minutes)
The purpose of this exercise is to present students with an opportunity to
debate the ethicality of competing courses of action. Some students may
The power of rationalization is a very important topic when discussing
ethics and decision making. When students are asked a generic question
Note to instructors: Before beginning a classroom discussion, allow