Join Earl Kay Stice for an in-depth discussion in this video Performance evaluation example: Drilling contest, part of Accounting Foundations.
Let's do one more illustration of an…application of managerial accounting…using information inside a company.…The general topic here is performance evaluation,…and let me use my favorite illustration of this,…the famous Soviet oil-drilling contest.…I found this story years ago and…I forgot to write down the source,…so you'll have to trust me on this story,…but the story goes that back in the Old Soviet Union,…so this is back before 1990,…there was an oil-drilling contest.…
Oil teams that were set in competition,…one with another, to motivate the oil drillers…to work hard, and drill as much as possible.…OK, here's the way they decided…to measure who would win the contest.…Meters drilled.…The team that drills the most meters…is going to win the contest.…Well, some clever folks on one of the teams…figured out that the best way to drill…lots of meters is to drill a shallow hole,…say 100 meters down, and stop,…pull out all your drilling rig,…move your stuff a short distance away,…and drill another 100-meter hole,…pull up your stuff again, move a short distance away,…
- What is accounting?
- Working with balance sheets and income statements
- Determining the costs of products
- Performing break-even analysis
- Determining average and marginal tax rates
- Understanding tax deductions and credits
Skill Level Appropriate for all
1. Basics of Accounting
2. Financial Accounting
3. Managerial Accounting
4. Income Taxes
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