Chapter 01 - Accounting Information Systems and Firm Value 1-1 .. Solutions – Chapter 1 Discussion Questions 1. Brainstorm a list of discretionary information that might be an output of an accounting information system and be needed by Starbucks. Prioritize which items might be most important and provide support. Answers will vary. Here are some potential answers: The cost of a cup of coffee, by type: Breakfast blend, Cafe estima, caffe Verona, espresso roast, Ethiopia sidamo, french roast, Gold coast blend, Guatemala Antigua, house blend, Italian roast, Kenya coffee, komodo dragon blend, organic Serena blend, organic shade grown Mexico, sumatra, decaf caffe Verona, decaf espresso roast, decaf house blend, and decaf Sumatra! Monthly Sales per square foot of retail space. Employee cost for each operating hour. Advertising expenditures per dollar of sales. The cost of condiments per dollar sales of coffee. Condiments might include sweeteners, liquid creamers, cream canisters, sugar packets, sugar canisters, stir sticks! The cost of electricity per operating hour each month of the year. 2. Explain the information value chain. How do business events turn into data then into information and then into knowledge? Give an example starting with the business event of the purchase of a DVD at Best Buy all the way to useful information for the CEO and other decision makers. The information value chain represents the overall transformation from a business need and business event (like each individual sale of U.S. flag) to an ultimate decision. The information value chain might be represented considering the purchase of a DVD at Best Buy in the following way: The DVD will be recorded as sales revenue and then after deducting its costs will add to or subtract from corporate income. The cash from the DVD sale will also add to the operating cash flows. The specific DVD will be recorded in the information as a sale to monitor which DVDs are selling within Best Buy. This will help Best Buy and its suppliers know which DVDs are selling and which type of DVDs should be reordered. The type of DVD will also help the marketing department better understand its customers and their respective demographic profile to better market to them.