Managerial Accounting (15th Edition)

Published by McGraw-Hill Education
ISBN 10: 007802563X
ISBN 13: 978-0-07802-563-1

Chapter 1 - Managerial Accounting: An Overview - Questions - Page 19: 1-10

Answer

Planning: McDonald's may place a clause in their plan to boost sales that the plan will be immediately ended in the event that overall sales fall by more than 10%. McDonald's is dealing with the risk of their plan by attempting to limit the potential risk associated with the actions that will be taken. Controlling: Managers will manage the financial risk of an action by monitoring the predefined budget and time frame and by using that information to consider their options. Decision Making: A manager needs to consider how an action will affect the company and the outside world in all aspects before making a decision. An action may be financially beneficial but ethically disastrous. All risks must be considered in order to make the overall best decision in any scenario.

Work Step by Step

Planning: McDonald's may place a clause in their plan to boost sales that the plan will be immediately ended in the event that overall sales fall by more than 10%. McDonald's is dealing with the risk of their plan by attempting to limit the potential risk associated with the actions that will be taken. Controlling: Managers will manage the financial risk of an action by monitoring the predefined budget and time frame and by using that information to consider their options. Decision Making: A manager needs to consider how an action will affect the company and the outside world in all aspects before making a decision. An action may be financially beneficial but ethically disastrous. All risks must be considered in order to make the overall best decision in any scenario.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.