Managerial accounting and performance measures

Assignment Help Managerial Accounting

Reference no: EM1317282

An-Hour Foto provides film processing at a single store location. The store has a policy that film will be developed in 24 hours, or the processing is free. It also has a policy that it will refund customers' money for any pictures that were poorly developed.

In order to improve income without raising prices, the company must find ways to reduce cost. To this end, the company has experimented with a new chemical used in its film processing. Management has determined that the chemical takes longer to process film and is more sensitive to improper handling than the old chemical. While the new chemical is less expensive to improper handling than the old chemical, the amount of free processing and photo returns have increased since the company switched to this chemical. Accordingly, management must decide whether to continue using this new chemical or return to the old chemical.

Required

A. How can managerial accounting be used to assist the company in determining whether to continue using the new chemical?

B. What are some of the nonfinancial measures provided by managerial accounting to assist managers in the decision-making process?

Reference no: EM1317282

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