Description
This case has two separate parts.
Part I
How can activity based management and activity based costing (ABC) benefit an organization? Specifically, address the following points.
- How does ABC differ from other allocation methods?
- Describe the main characteristics of ABC.
- What type of companies tends to benefit from ABC?
- Comment on a company (research Internet) that has implemented ABC.
- What type of company is it?
- Was it successful?
Part II
The below concepts are all applied by many business in an attempt to be more efficient and reduce costs. Create a table describing at least three of the concepts below and how implementation may benefit an organization.
- Lean manufacturing
- Just-in-time
- Theory of constraints
- Total quality control
- Value chain
The submission should be 3 to 5 pages and need to include answers to all the questions listed above. Include references in APA format.
Modular Case Expectations
It is important to answer the questions above. The discussion should be three to five pages and written in a clear and concise manner. Support your discussion with references in APA format. You are encouraged to use Excel or other compatible spreadsheet when computations are involved.
module 4 SLP
|
Background information |
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Total |
Prod A |
Prod B |
|
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Beginning inventory |
0 |
||
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Units produced |
10,000 |
2,500 |
7,500 |
|
Units sold |
8,000 |
2,000 |
6,000 |
|
Selling price per unit |
$255 |
480 |
180 |
|
Variable costs per unit |
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Direct material |
100 |
280 |
40 |
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Direct labor |
60 |
60 |
60 |
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Variable overhead |
25 |
40 |
20 |
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Variable selling and admin. exp. |
10 |
13 |
9 |
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Fixed costs |
|||
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Fixed manufacturing overhead |
200,000 |
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Fixed selling and administrative |
100,000 |
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Production runs (not $) |
100 |
65 |
35 |
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Number of sales reps (not $) |
25 |
15 |
10 |
Here are the first few lines of the segmented income statement to help you get started. Complete the statement in good format and make sure you allocate the fixed costs to the two products. When done, comment on the information and the relative profitability of the two products.
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Herrestad Company |
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Segmented Income Statement |
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For the period ending Dec. 31, 2011 |
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|
A |
B |
Total |
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Sales |
$960,000 |
$1,080,000 |
$2,040,000 |
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Variable costs: |
|||
|
Direct material |
560,000 |
240,000 |
800,000 |
The submission should be 2 to 4 pages and need to include answers to all the questions listed above. Show computations, discuss the results and include references in APA format.
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