Cost accounting principles are an important component of any organization that assist management in their decision-making. Additionally, managers rely on accountants to interpret data and provide information to help them understand their business in greater depth. Which of the following choices best represents an operating plan?
A) Nathan is the manager of an automotive shop who knows that the shop needs more mechanics on staff to expand their service offerings.
B) Susan is a therapist and would like to expand her practice by hiring new therapists over the next few years.
C) Tara is a florist who would eventually like to retire and has enlisted the help of her children to formulate a plan by which they take over control within the next 5 years.
D) Theodore is the manager of a local football team and is using last year's ticket sales data to create a plan to increase ticket sales for the coming year.

Question

Quizplus · Accepted Answer

This question requires familiarity with the differences between a strategic plan and an operating plan. Choice D is the correct choice because that plan is likely focused on an immediately upcoming year's specific outcome. The other three choices are closer to strategic plans in that they are comprehensive, likely multi-year, plans for an organization.

Cost Accounting Principles Are an Important Component of Any Organization