SOLUTION MANUAL
For Management Control Systems:
Performance Measurement, Evaluation And
Incentives 4th Edition By Kenneth
Merchant (Author)
Questions And Answers Graded A+
,Pearson Education Limited
Kao Two Kao
Park
Harlow Cm17 9na United
Kingdom
Tel: +44 (0)1279 623623
Web: Www.Pearson.Com/Uk
Second Edition Published 2007
Third Edition Published 2012
This Edition Published 2018
© Pearson Education Limited 2018
The Rights Of Kenneth A. Merchant And Wim A. Van Der Stede To Be Identified As Authors Of
This Work Have Been Asserted By Them In Accordance With The Copyright, Designs And
Patents Act 1988.
Isbn 978-1-292-11056-1
All Rights Reserved. Permission Is Hereby Given For The Material In This Publication To
Be Reproduced For Ohp Transparencies And Student Handouts, Without Express Permission Of
The Publishers, For Educational Purposes Only. In All Other Cases, No Part Of This Publication
May Be Reproduced, Stored In A Retrieval System, Or Transmitted In Any Form Or By Any
Means, Electronic, Mechanical, Photocopying, Recording, Or Otherwise Without Either The Prior
Written Permission Of The Publishers Or A Licence Permitting Restricted Copying In The United
Kingdom Issued By The Copyright Licensing Agency Ltd, Barnard’s Inn, 86 Fetter Lane, London
Ec4a 1en. This Book May Not Be Lent, Resold, Hired Out Or Otherwise Disposed Of By
Way Of Trade In Any Form Of Binding Or Cover Other Than That In Which It Is Published,
Without The Prior Consent Of The Publishers.
Pearson Education Is Not Responsible For The Content Of Third-Party Internet Sites.
2
© Pearson Education Limited 2018
, Contents
I. Introduction
1. Introduction 8
2. Model Syllabi 11
3. Case Matrix 76
4. The Case Method Of Instruction: Suggestions For Students 80
II. Teaching Notes For Cases
Chapter 1 Cases
1. Leo’s Four-Plex Theater 86
2. Wong’s Pharmacy 88
3. Private Fitness, Inc. 89
4. Atlanta Home Loan 91
Chapter 2 Cases
5. Office Solutions, Inc.§ 96
6. Puente Hills Toyota 103
7. Kooistra Autogroep 108
8. Houston Fearless 76, Inc. 117
Includes (1) Teaching Note Addendum: Student Exam
Assignment And Report; (2) The Houston Fearless 76, Inc. (A):
Aftermath Case; And (3) The Houston Fearless 76, Inc. (B)
Case.
Chapter 3 Cases
9. Witsky And Associates, Inc.§ 136
10. The Platinum Pointe Land Deal 139
11. Eyeon Pharmaceuticals, Inc.§ 144
12. Axeon N.V.* 149
Chapter 4 Cases
13. Controls At The Bellagio Casino Resort 159
14. Pcl: A Breakdown In The Enforcement Of Management Control 165
Chapter 5 Cases
15. Philip Anderson 169
16. Sunshine Fashion: Fraud, Theft, And Misbehavior Among Employees 175
3
© Pearson Education Limited 2018
, 17. Better Beauty, Inc.§ 181
18. Fit Food, Inc. 186
19. Atlantis Chemical Industries§ 192
Chapter 6 Cases
20. Diagnostic Products Corporation 195
21. Game Shop, Inc. 201
22. Family Care Specialists Medical Group, Inc. 209
Chapter 7 Cases
23. Kranworth Chair Corporation 215
24. Zumwald Ag* 223
25. Global Investors, Inc. 227
Chapter 8 Cases
26. Royal Wessanen Nv§ 233
27. The Stimson Company§ 246
28. Multiple Versions Of The Plan§ 251
29. Vitesse Semiconductor Corporation 257
A Spreadsheet Containing The Irr Data And Calculations Is
Available Online On The Publisher’s Website.
30. Visuson, Inc.: Business Stress Testing 266
Two Visuson, Inc. Databases Are Available Online On
The Publisher’s Website—One For Instructors And One For
Students.
Chapter 9 Cases
31. Harwood Medical Instruments Plc 272
32. Superconductor Technologies, Inc. 276
33. Raven Capital, Llc 284
Chapter 10 Cases
34. Behavioral Implications Of Airline Depreciation Accounting
Policy Choices* 296
35. Las Ferreterías De México, S.A. De C.V.* 300
36. Industrial Electronics, Inc.* 305
37. Haengbok Bancorp* 309
38. Corbridge Industries, Inc.§ 313
39. King Engineering Group, Inc.§ 319
40. Berkshire Industries Plc 324
4
© Pearson Education Limited 2018
For Management Control Systems:
Performance Measurement, Evaluation And
Incentives 4th Edition By Kenneth
Merchant (Author)
Questions And Answers Graded A+
,Pearson Education Limited
Kao Two Kao
Park
Harlow Cm17 9na United
Kingdom
Tel: +44 (0)1279 623623
Web: Www.Pearson.Com/Uk
Second Edition Published 2007
Third Edition Published 2012
This Edition Published 2018
© Pearson Education Limited 2018
The Rights Of Kenneth A. Merchant And Wim A. Van Der Stede To Be Identified As Authors Of
This Work Have Been Asserted By Them In Accordance With The Copyright, Designs And
Patents Act 1988.
Isbn 978-1-292-11056-1
All Rights Reserved. Permission Is Hereby Given For The Material In This Publication To
Be Reproduced For Ohp Transparencies And Student Handouts, Without Express Permission Of
The Publishers, For Educational Purposes Only. In All Other Cases, No Part Of This Publication
May Be Reproduced, Stored In A Retrieval System, Or Transmitted In Any Form Or By Any
Means, Electronic, Mechanical, Photocopying, Recording, Or Otherwise Without Either The Prior
Written Permission Of The Publishers Or A Licence Permitting Restricted Copying In The United
Kingdom Issued By The Copyright Licensing Agency Ltd, Barnard’s Inn, 86 Fetter Lane, London
Ec4a 1en. This Book May Not Be Lent, Resold, Hired Out Or Otherwise Disposed Of By
Way Of Trade In Any Form Of Binding Or Cover Other Than That In Which It Is Published,
Without The Prior Consent Of The Publishers.
Pearson Education Is Not Responsible For The Content Of Third-Party Internet Sites.
2
© Pearson Education Limited 2018
, Contents
I. Introduction
1. Introduction 8
2. Model Syllabi 11
3. Case Matrix 76
4. The Case Method Of Instruction: Suggestions For Students 80
II. Teaching Notes For Cases
Chapter 1 Cases
1. Leo’s Four-Plex Theater 86
2. Wong’s Pharmacy 88
3. Private Fitness, Inc. 89
4. Atlanta Home Loan 91
Chapter 2 Cases
5. Office Solutions, Inc.§ 96
6. Puente Hills Toyota 103
7. Kooistra Autogroep 108
8. Houston Fearless 76, Inc. 117
Includes (1) Teaching Note Addendum: Student Exam
Assignment And Report; (2) The Houston Fearless 76, Inc. (A):
Aftermath Case; And (3) The Houston Fearless 76, Inc. (B)
Case.
Chapter 3 Cases
9. Witsky And Associates, Inc.§ 136
10. The Platinum Pointe Land Deal 139
11. Eyeon Pharmaceuticals, Inc.§ 144
12. Axeon N.V.* 149
Chapter 4 Cases
13. Controls At The Bellagio Casino Resort 159
14. Pcl: A Breakdown In The Enforcement Of Management Control 165
Chapter 5 Cases
15. Philip Anderson 169
16. Sunshine Fashion: Fraud, Theft, And Misbehavior Among Employees 175
3
© Pearson Education Limited 2018
, 17. Better Beauty, Inc.§ 181
18. Fit Food, Inc. 186
19. Atlantis Chemical Industries§ 192
Chapter 6 Cases
20. Diagnostic Products Corporation 195
21. Game Shop, Inc. 201
22. Family Care Specialists Medical Group, Inc. 209
Chapter 7 Cases
23. Kranworth Chair Corporation 215
24. Zumwald Ag* 223
25. Global Investors, Inc. 227
Chapter 8 Cases
26. Royal Wessanen Nv§ 233
27. The Stimson Company§ 246
28. Multiple Versions Of The Plan§ 251
29. Vitesse Semiconductor Corporation 257
A Spreadsheet Containing The Irr Data And Calculations Is
Available Online On The Publisher’s Website.
30. Visuson, Inc.: Business Stress Testing 266
Two Visuson, Inc. Databases Are Available Online On
The Publisher’s Website—One For Instructors And One For
Students.
Chapter 9 Cases
31. Harwood Medical Instruments Plc 272
32. Superconductor Technologies, Inc. 276
33. Raven Capital, Llc 284
Chapter 10 Cases
34. Behavioral Implications Of Airline Depreciation Accounting
Policy Choices* 296
35. Las Ferreterías De México, S.A. De C.V.* 300
36. Industrial Electronics, Inc.* 305
37. Haengbok Bancorp* 309
38. Corbridge Industries, Inc.§ 313
39. King Engineering Group, Inc.§ 319
40. Berkshire Industries Plc 324
4
© Pearson Education Limited 2018
