Paper on Accounting Issue - Essay Example

a. Strategic Decisions - Accounting has always been an integral part of the decision making process in any business endeavor. Whether it is to start, expand, diversify, downsize or liquidate one, most of the options taken by management are hinged on financial issues. b. Tactical or Operational Decisions - The cases mentioned above however, are those seen when one looks at the business as a macrocosm, on the other hand, there are more prevalent and specific accounting issues once the business process is dissected into segments.

We can expound on this by citing issues at various stages in the business determining the best product mix to achieve optimum profit in Sales and Marketing, choosing the most efficient mode of shipping products to various locations, questions on whether to acquire new equipment vis-à-vis upgrade of existing or to increase or reduce inventory level in Materials Management to name a few. C. Cost Benefit Analysis - This form of analysis requires that every aspect of the proposal be given a financial value to enable the proponent to frame an argument in terms of costs and benefits (BNET) A.

Rationale – The deliberation of this case study aims to determine whether the status quo provides the better option or if the proposal of the proponent can best improve the inventory, i.e., malt, picture of the company. The process by which this can be established is thru a Cost Benefit Analysis “assessing the financial viability” (ADB Handbook 123) of the proposal. B. The Status Quo – Bubbly Beer Inc. buys malt from BRLI Corporation twice a month at 100,000 kilograms per shipment. This ordering pattern allows them to maintain an inventory level of 15 days.

Presently, malt costs US$24 per kilogram. C. Presentation of the Alternative - BRLI Corporation proposed to Bubbly Beer Inc. a 10% discount for every kilogram over and above their normal order if the latter can advance their second order this month. While the total sales for BRLI