CHAPTER 1 Solutions to Problems Problem 1.1 The Information Age has provided business with an increased quantity and improved quality of the information that is available in real time for planning, decision making, and control. As a result, more people in the organization are now involved in decision making, and timelier and more accurate decisions can be made. This has also facilitated an expansion in the scope of business decisions beyond cost accounting to include strategic performance measurement, risk management, connecting strategy with operations, looking to the future, and environmental awareness. In response, accounting practices have expanded to include systems that measure and support this new realm of business practices, such as: value-based management, quality management, environmental accounting, activity-based management, strategic management and lean accounting. Problem 1.2 Arising from the Industrial Revolution were large, complex companies that were characterized by multiple product lines, automation and complex processes, and largescale operations. As organizations became more diversified and decentralized, more emphasis was placed on measuring profitability and addressing other issues such as performance measurement, quality management, and customer service. This created a need for different and more accurate information for decision making. It is quite possible that many companies could not succeed in our current business environment without having the benefit of management accounting to assist in planning, decision making and control. Problem 1.3 a) Scorekeeping b) Problem solving c) Problem solving d) Decision making e) Scorekeeping f) Scorekeeping