Instructor’s Manual m
Management Control m
Systems m
Third Edition m
Kenneth A. Merchant m m
Wim A. Van der Stede
m m m m m
For further instructor material
m m m
please visit:
m m
www.pearsoned.co.uk/merchant
ISBN : 978-0-273-73762-9
m m
© Pearson Education Limited 2012
m m m m
Lecturers adopting the main text are permitted to download the manual as required.
m m m m m m m m m m m m
,Pearson Education Limitedm m
Edinburgh Gate m
Harlow
m
Essex CM20 2JE m m
England
m
and Associated Companies around the world
m m m m m
Visit us on the World Wide Web at:
m m m m m m m
www.pearson.com/uk
This edition published 2012
m m m
© Pearson Education Limited 2012
m m m m
The rights of Merchant and Van der Stede to be identified as the authors of this work have
m m m m m m m m m m m m m m m m m
been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
m m m m m m m m m m m m m m
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
m m m m m m m m m m m m m m
system, or transmitted in any form or by any means, electronic, mechanical, photocopying,
m m m m m m m m m m m m m
recording or otherwise, without either the prior written permission of the publisher or a
m m m m m m m m m m m m m m
licence permitting restricted copying in the United Kingdom issued by the Copyright
m m m m m m m m m m m m
Licensing Agency Ltd, Saffron House, 6-10 Kirby Street, London EC1N 8TS.
m m m m m m m m m m m
Pearson Education is not responsible for the content of third-party internet sites.
m m m m m m m m m m m
m ISBN: 978-0-273-73762-9
m
British Library Cataloguing-in-Publication Data
m m m
A catalogue record for this book is available from the British Library
m m m m m m m m m m m
Library of Congress Cataloguing-in-Publication Data
m m m m
A catalog record for this book is available from the Library of
m m m m m m m m m m m
Congress 10 9 8 7 6 5 4 3 2 1
m m m m m m m m m m m
Typeset in 11/12 pt Times New Roman by 31
m m m m m m m m
, Contents
Chapters Pages
I Introduction
1. Introduction 6
2. Model Syllabi m 9
3. Case Matrix m 70
4. The Case Method of Instruction: Suggestions for Students
m m m m m m m 75
II Teaching Notes for Cases
m m m
1. Leo’s Four-Plex Theater
m m 81
2. Wong’s Pharmacy m 83
3. Private Fitness, Inc.
m m 84
4. Atlanta Home Loan m m 86
5. Armco, Inc.: Midwestern Steel Division
m m m m 91
6. Loctite Company De Mexico, S.A. de C. V.
m m m m m m m 97
7. Puente Hills Toyota m m 101
8. Houston Fearless 76, Inc. m m m 106
Includes (1) Teaching Note Addendum: Student Exam Assignment
m m m m m m m
mand Report; (2) the Houston Fearless 76, Inc. (A): Aftermath
m m m m m m m m m
mcase; and m
(3) the Houston Fearless 76, Inc. (B) case.
m m m m m m
9. The Platinum Pointe Land Deal
m m m m 125
10. Axeon N.V. m 130
11. Alcon laboratories, Inc.
m m 139
12. Controls at the Bellagio Casino Resort
m m m m m 143
13. The Lincoln Electric Company
m m m 149
14. PCL: A Breakdown in the Enforcement of Management Control
m m m m m m m m 154
15. Philip Anderson
m 155
16. Sunshine Fashion: Fraud, Theft and Misbehavior Among Employees
m m m m m m m 161
17. Fit Food, Inc.
m m 162
18. Diagnostic Products Corporation m m 168
19. Game Shop, Inc. m m 174
20. Family Care Specialists Medical Group, Inc.
m m m m m 182
21. AirTex Aviation m 188
22. Kranworth Chair Corporation m m 195
23. Toyota Motor Sales m m 203
24. Zumwald, AG (with Erratum on page 208)
m m m m m m 209
25. Global Investors, Inc.
m m 213
26. Citibank Indonesia m 219
27. HCC Industries
m 226
28. Patagonia, Inc. m 232
29. VisuSon, Inc.: Business Stress Testing
m m m m 238
Two VisuSon, Inc. databases are available online on the publisher’s
m m m m m m m m m
mwebsite – one for instructors, and one for students.
m m m m m m m m
30. Harwood Medical Instruments PLC m m m 244
31. Superconductor Technologies, Inc. m m 248
3
© mPearson mEducation mLimited
2012
, rd
Merchant m& mVan mder mStede, mManagement mControl mSystems, m3 edition, mInstructor’s
m
Manual
32. Tsinghua Tongfang Co. Ltd. m m m 256
33. Raven Capital, LLC
m m 262
34. Behavioral Implications of Airline Depreciation Accounting
m m m m m
Policy Choices
m 273
35. Las Ferreterías de México, S.A. de C.V.
m m m m m m 277
36. Industrial Electronics, Inc.
m m 282
37. Haengbok Bancorp m 286
38. Berkshire Industries PLC m m 290
39. Catalytic Solutions, Inc.m m 299
40. First Commonwealth Financial Corporation
m m m 307
41. Statoil 315
42. Olympic Car Wash m m 324
43. Southern California Edison
m m 327
44. Beifang Chuang Ye Vehicle Group
m m m m 335
45. Hoffman Discount Drugs, Inc.
m m m 338
46. Formosa Plastics Group m m 342
47. Bank of the Desert
m m m 348
The teaching notes for Bank of the Desert (A) and (B) are combined.
m m m m m m m m m m m m
mIncludes Bank of the Desert: Appendix. The Bank of the Desert
m m m m m m m m m m
mdatabase and a set of teaching slides are available online on the
m m m m m m m m m m m
mpublisher’s website. m
48. Vector Aeromotive Corporation
m m 361
49. Golden Parachutes?
m 367
50. Pacific Sunwear of California, Inc.
m m m m 371
51. Entropic Communications, Inc.
m m 376
52. Financial Reporting Problems at Molex, Inc.
m m m m m 382
53. Don Russell: Experiences of a Controller/CFO
m m m m m
Includes the Don Russell (A) case.
m m m m m 390
54. Desktop Solutions, Inc. (A): Audit of the St. Louis Branch
m m m m m m m m m
(B): Audit of Operations Group Systems m m m m m 400
55. Landale PLC m 405
56. Two Budget Targets
m m 408
57. Conservative Accounting in the General Products Division
m m m m m m 411
58. Education Food Services at Central Maine State University
m m m m m m m 416
59. The Sales Acceleration Program
m m m 420
60. Expiring Software License
m m 424
61. Lernout & Hauspie Speech Products
m m m m 427
62. ConAgra Grocery Products Company
m m m 434
63. Lincoln Electric: Venturing Abroad
m m m 439
64. TECO Electric & Machinery Co. Ltd.
m m m m m 451
65. Kooistra Autogroep m 455
66. City of Yorba Linda, California
m m m m 464
67. Waikerie Co-Operative Producers Ltd.
m m m 469
68. Boston Lyric Opera
m m 473
69. University of Southern California: Responsibility
m m m m
Center Management System
m m 492
4
© mPearson mEducation mLimited
2012
Management Control m
Systems m
Third Edition m
Kenneth A. Merchant m m
Wim A. Van der Stede
m m m m m
For further instructor material
m m m
please visit:
m m
www.pearsoned.co.uk/merchant
ISBN : 978-0-273-73762-9
m m
© Pearson Education Limited 2012
m m m m
Lecturers adopting the main text are permitted to download the manual as required.
m m m m m m m m m m m m
,Pearson Education Limitedm m
Edinburgh Gate m
Harlow
m
Essex CM20 2JE m m
England
m
and Associated Companies around the world
m m m m m
Visit us on the World Wide Web at:
m m m m m m m
www.pearson.com/uk
This edition published 2012
m m m
© Pearson Education Limited 2012
m m m m
The rights of Merchant and Van der Stede to be identified as the authors of this work have
m m m m m m m m m m m m m m m m m
been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
m m m m m m m m m m m m m m
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
m m m m m m m m m m m m m m
system, or transmitted in any form or by any means, electronic, mechanical, photocopying,
m m m m m m m m m m m m m
recording or otherwise, without either the prior written permission of the publisher or a
m m m m m m m m m m m m m m
licence permitting restricted copying in the United Kingdom issued by the Copyright
m m m m m m m m m m m m
Licensing Agency Ltd, Saffron House, 6-10 Kirby Street, London EC1N 8TS.
m m m m m m m m m m m
Pearson Education is not responsible for the content of third-party internet sites.
m m m m m m m m m m m
m ISBN: 978-0-273-73762-9
m
British Library Cataloguing-in-Publication Data
m m m
A catalogue record for this book is available from the British Library
m m m m m m m m m m m
Library of Congress Cataloguing-in-Publication Data
m m m m
A catalog record for this book is available from the Library of
m m m m m m m m m m m
Congress 10 9 8 7 6 5 4 3 2 1
m m m m m m m m m m m
Typeset in 11/12 pt Times New Roman by 31
m m m m m m m m
, Contents
Chapters Pages
I Introduction
1. Introduction 6
2. Model Syllabi m 9
3. Case Matrix m 70
4. The Case Method of Instruction: Suggestions for Students
m m m m m m m 75
II Teaching Notes for Cases
m m m
1. Leo’s Four-Plex Theater
m m 81
2. Wong’s Pharmacy m 83
3. Private Fitness, Inc.
m m 84
4. Atlanta Home Loan m m 86
5. Armco, Inc.: Midwestern Steel Division
m m m m 91
6. Loctite Company De Mexico, S.A. de C. V.
m m m m m m m 97
7. Puente Hills Toyota m m 101
8. Houston Fearless 76, Inc. m m m 106
Includes (1) Teaching Note Addendum: Student Exam Assignment
m m m m m m m
mand Report; (2) the Houston Fearless 76, Inc. (A): Aftermath
m m m m m m m m m
mcase; and m
(3) the Houston Fearless 76, Inc. (B) case.
m m m m m m
9. The Platinum Pointe Land Deal
m m m m 125
10. Axeon N.V. m 130
11. Alcon laboratories, Inc.
m m 139
12. Controls at the Bellagio Casino Resort
m m m m m 143
13. The Lincoln Electric Company
m m m 149
14. PCL: A Breakdown in the Enforcement of Management Control
m m m m m m m m 154
15. Philip Anderson
m 155
16. Sunshine Fashion: Fraud, Theft and Misbehavior Among Employees
m m m m m m m 161
17. Fit Food, Inc.
m m 162
18. Diagnostic Products Corporation m m 168
19. Game Shop, Inc. m m 174
20. Family Care Specialists Medical Group, Inc.
m m m m m 182
21. AirTex Aviation m 188
22. Kranworth Chair Corporation m m 195
23. Toyota Motor Sales m m 203
24. Zumwald, AG (with Erratum on page 208)
m m m m m m 209
25. Global Investors, Inc.
m m 213
26. Citibank Indonesia m 219
27. HCC Industries
m 226
28. Patagonia, Inc. m 232
29. VisuSon, Inc.: Business Stress Testing
m m m m 238
Two VisuSon, Inc. databases are available online on the publisher’s
m m m m m m m m m
mwebsite – one for instructors, and one for students.
m m m m m m m m
30. Harwood Medical Instruments PLC m m m 244
31. Superconductor Technologies, Inc. m m 248
3
© mPearson mEducation mLimited
2012
, rd
Merchant m& mVan mder mStede, mManagement mControl mSystems, m3 edition, mInstructor’s
m
Manual
32. Tsinghua Tongfang Co. Ltd. m m m 256
33. Raven Capital, LLC
m m 262
34. Behavioral Implications of Airline Depreciation Accounting
m m m m m
Policy Choices
m 273
35. Las Ferreterías de México, S.A. de C.V.
m m m m m m 277
36. Industrial Electronics, Inc.
m m 282
37. Haengbok Bancorp m 286
38. Berkshire Industries PLC m m 290
39. Catalytic Solutions, Inc.m m 299
40. First Commonwealth Financial Corporation
m m m 307
41. Statoil 315
42. Olympic Car Wash m m 324
43. Southern California Edison
m m 327
44. Beifang Chuang Ye Vehicle Group
m m m m 335
45. Hoffman Discount Drugs, Inc.
m m m 338
46. Formosa Plastics Group m m 342
47. Bank of the Desert
m m m 348
The teaching notes for Bank of the Desert (A) and (B) are combined.
m m m m m m m m m m m m
mIncludes Bank of the Desert: Appendix. The Bank of the Desert
m m m m m m m m m m
mdatabase and a set of teaching slides are available online on the
m m m m m m m m m m m
mpublisher’s website. m
48. Vector Aeromotive Corporation
m m 361
49. Golden Parachutes?
m 367
50. Pacific Sunwear of California, Inc.
m m m m 371
51. Entropic Communications, Inc.
m m 376
52. Financial Reporting Problems at Molex, Inc.
m m m m m 382
53. Don Russell: Experiences of a Controller/CFO
m m m m m
Includes the Don Russell (A) case.
m m m m m 390
54. Desktop Solutions, Inc. (A): Audit of the St. Louis Branch
m m m m m m m m m
(B): Audit of Operations Group Systems m m m m m 400
55. Landale PLC m 405
56. Two Budget Targets
m m 408
57. Conservative Accounting in the General Products Division
m m m m m m 411
58. Education Food Services at Central Maine State University
m m m m m m m 416
59. The Sales Acceleration Program
m m m 420
60. Expiring Software License
m m 424
61. Lernout & Hauspie Speech Products
m m m m 427
62. ConAgra Grocery Products Company
m m m 434
63. Lincoln Electric: Venturing Abroad
m m m 439
64. TECO Electric & Machinery Co. Ltd.
m m m m m 451
65. Kooistra Autogroep m 455
66. City of Yorba Linda, California
m m m m 464
67. Waikerie Co-Operative Producers Ltd.
m m m 469
68. Boston Lyric Opera
m m 473
69. University of Southern California: Responsibility
m m m m
Center Management System
m m 492
4
© mPearson mEducation mLimited
2012
