Nonprot organizations, such as agencies of the federal government and nonp

need managerial accounting because they do not have to earn a prot. Do you
statement? Why or why not?
I do not agree with the statement, because nonprofit organizations have people in charge
assets. This puts them into similar situation as for profit organizations, as these people mu
in order to have these nonprofits up and running in an optimal way.
In my opinion, it does not matter what the end goal is (profit, nonprofits, something else),
made them managerial accounting is a necessity.

Fixed costs are really variable. The more you produce, the smaller the unit cos
statement correct? Why or why not?

This statement is not correct, as fixed costs could never be variable. The statement here i
unit cost of production, but this in reality is irrelevant on the cost side as the organization
amount at the end of the period regardless of how many units it produced.

The unit cost of production is relevant in other areas. For example, people from pricing dep
much cost is allocated to a single unit cost to make appropriate selling price. But I emphas
make a difference at the end of the period when the fixed amount would be due.

Opportunity cost analysis. Susan Ortiz operates a covered parking structure th

to 600 cars. Susan charges $6 per hour for parking. Parking attendants cost $12
the cashiers booth at Susans Parking. The facility has two parking attendants
hours per day. Utilities and other xed costs average $4,000 per month. Recentl
nearby Sheraton Hotel approached Susan concerning the reservation of 100 spo
weekend for a lump sum of $3,600. This particular weekend will be a football we
would be full for only the six hours surrounding the game. Other than those six
would have more than 100 empty spots available. The facility would have the sa
attendants whether or not Susan takes the offer from the Sheraton Hotel. What
accepting the offer?
Fixed cost
Parking attendants
Opportunity cost for 100 spots
Hotel pays

In this case Susan should be indifferent to the offer as the amount that hotel would pay wo
that would be taken during the football game.

Nonetheless, Susan would have to wisely weight these 2 options because of the possible f
and she must decide if hotel is her more valuable customer or it is more important for her
during football games.

Per month
$4,000
Per hour
$12
Spots
100

Not affected
# of attenda. Working hrs
2
8
Hours
Per hour
6
6

Total
$192
Total
$3,600
$3,600
$0

Not affected

Responsibility for ethical action (adapted from CMA exam). Emily Johnson recen
Chemicals, Inc., as assistant controller. Growth Chemicals processes chemicals f
During her rst month on the job, Emily spent most of her time getting better a
responsible for plant operations. Emily asked the plant supervisor what the proc
disposal of chemicals. The response was that he (the plant supervisor) was not
waste and that Emily would be wise to ignore the issue. Of course, this only dro
the matter further. Emily soon discovered that Growth Chemicals was dumping t
public landll late at night. Further, she discovered that several members of ma
in arranging for this dumping. Emily was, however, unable to determine whethe
controller, was involved. Emily considered three possible courses of action. She
with her controller, anonymously release the information to the local newspaper
with an outside member of the board of directors whom she knows personally.
a. Does Emily have an ethical responsibility to take a course of action?
b. Of the three possible courses of action, which are appropriate and which are

a. This is a very complex issue, but in my opinion Emily definitely has the responsibility to
Dumping the toxic waste near public landfill is a serious crime, and it is Emily's duty to do
than just ignore her discovery and carry on like nothing was happening.

b. I believe that the best action would be to go talk to the controller. I think that moving up
probability that someone would be concerned with this issue and start solving the problem
this company is clearly violating the law and Emily should quit her job.