Linear programming and optimal product mix decisions directed toward maximizing accounting income typically have assumed the use of direct costing. However, in this article a linear programming model is utilized to establish optimal sales and production levels which maximize income measured in terms of absorption costing. Since optimal sales and production levels may differ under the two systems, the use of linear programming represents a valuable pedagogical approach to the comparison of direct and absorption costing results in multiproduct situations.
Presents a letter to the editor in response to the article "Newly Emerging Standards of Auditor Responsibility," previously published in the January 1976 issue of "The Accounting Review."
Many factors influence the decision which a student makes regarding accepting job offers by "big 8" firms. Recruits often view twenty separate factors as different among firms. Newly hired employees receiving more than one job offer from "big 8" firms were asked to "rate" their chosen firm for each factor and the firm they last decided to reject. Findings indicated that factors such as friendliness of personnel and relaxed mood were more likely to influence the decision than were differences in salary, expected overtime work and travel.
The deductibility of professors' home office expenses has been increasingly liberalized for the last 13 years, resulting in a favorable income tax deduction. Recent legislation has limited this deduction severely, although with proper tax planning, a number of professors still will find it available. The purpose of this article is to examine the availability of the home office deduction under the new legislation and to illustrate the economic feasibility of taking it even when the deduction is allowable. A table provides the economic results of taking the home office deduction under various combinations of personal residence ownership periods and total home office deductions to depreciation ratios. As illustrated, the home office deduction is not economically feasible in a number of circumstances.
Multiple choice questions, in contrast to problems and discussion questions, permit coverage of a greater breadth of topics in a given time period and reduce grading workload; however, the basis of the conventional multiple choice answer is not elaborated. Preparing this elaboration can be a valuable learning experience. This article describes and illustrates a technique that guides the accounting student's preparation of elaborated multiple choice answers. The technique can be adapted for both examination and assignment purposes, with the benefits far exceeding the costs in either use.
Presents a reply to commentaries on a study about accuracy of earnings forecast. Clarification on the objectives of the study; Criticism on the model used in the study.
Common dollar financial statements add a second time dimension to financial reporing that beginning students of accounting mag find difficult to grasp. The authors find that students' difficulty in understanding the roll-forward adjustment and the distinction between monetary and nonmonetary items is alleviated when common dollar statements are introduced with a two-dimensional display. The two-dimensional display accommodates the money time dimension as distinguished from statement time, the monetary/nonmonetary distinction, the computation of income and the reconciliation of equity accounts as between statements based on common dollar magnitudes.
Starting with the increased role of nonprofit organizations and mounting pressures for accountability, this paper reviews several contemporary approaches used to achieve performance evaluation in nonprofit service organizations. An analysis of the deficiencies of social indicators, PPB systems and cost-benefit analysis leads to prospective cost-analytic solutions focusing upon costs and outcomes of service programs. In developing these solutions, cost-outcome is emphasized as fundamental to building viable cost-effectiveness analyses for service program evaluation and accountability. Conceptual discussions of related outcome issues follow. A detailed mental health example illustrates the application of the combined cost-outcome and cost-effectiveness methodology in assessing nonprofit performance for decision-making purposes.