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(a)Whether to develop an application that uses the latest technology that remotely notifies you of the contents of your fridge and the meals you can make with them.(b)Whether to develop a new brand of casual running shoes and sell it in discount stores(c)Whether to develop a new pasta sauce made with sundried tomatoes, pine nuts, and anchovies.(d)Whether to launch a new range of business jackets with standard features. For each of the relevant corporate decisions, discuss what information might be relevant to the management accountant in helping arrive at a decision? Consider both financial and non-financial information.

Question

(a)Whether to develop an application that uses the latest technology that remotely notifies you of the contents of your fridge and the meals you can make with them.(b)Whether to develop a new brand of casual running shoes and sell it in discount stores(c)Whether to develop a new pasta sauce made with sundried tomatoes, pine nuts, and anchovies.(d)Whether to launch a new range of business jackets with standard features. For each of the relevant corporate decisions, discuss what information might be relevant to the management accountant in helping arrive at a decision? Consider both financial and non-financial information.

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Solution

(a) For the application development, the management accountant would need to consider the cost of development, potential revenue from app sales or subscriptions, and ongoing maintenance costs. Non-financial information could include the size of the potential market (how many people have smart fridges), competition, and technological trends.

(b) For the running shoes, the accountant would need to consider the cost of production, potential revenue from sales, and the cost of distribution to discount stores. Non-financial information could include the size of the market for casual running shoes, competition, and trends in athletic wear.

(c) For the pasta sauce, the accountant would need to consider the cost of ingredients, production, and distribution, as well as potential revenue from sales. Non-financial information could include the size of the market for pasta sauces, competition, and food trends.

(d) For the business jackets, the accountant would need to consider the cost of materials, production, and distribution, as well as potential revenue from sales. Non-financial information could include the size of the market for business jackets, competition, and fashion trends.

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