Baldwin Bicycle Company: Management Accounting

The purpose of this report is discussing the case of Wilkerson Company that confronting tough competition in price cutting in pumps which caused to a big drop of pre-tax operating income from 10% to 3%. After observing the existing costing allocation, we found out there is an issue on the existing costing report that the manager could not be able to see the real situation. In light of this, there will be brought to the discussion on the feasibility of using an alternative costing method – Activity based costing (ABC) in the latter paragraphs.

In the past few years, they have experienced a significant increase in inventory days. Not having attractive inventory leads to a decrease in sales and an increase in discounts and write offs leading to further decreases in EBITDA Margins. In 2009, the inventory turnover took 215 days. This is significantly above Le Chateaus competitors, for example Reitman’s inventory took only 72 days (Annual Report 2010). This means it takes Le Chateaus three times as long to sell inventory compared to their competitors. To make matters worse, this trend has been exacerbated in recent years. Le Chateau’s turnover has ballooned to a staggering 341 days while Reitman’s has kept inventory turnover stable at only 76 days.

Payton Approved, a new dog bakery opened in July 2014. To measure the businesses success the first six months are reviewed. The first topic will discover the steps of the accounting cycle with descriptions of each process. Next, one will learn and analyze a report of the importance of each step for the accounting process to measure success. The last analyzed step will discuss how the omission of one step can impact the success of the company.

cognizant of the fact that the choices he makes can affect the price a buyer pays

The purpose of accounting cycle report is to keep the best accounting records up to date. It also assist in producing the best possible financial statement that shows the true pictures of the business or organization and help making a good call whether business is profitable or not.

From the industry benchmark report for 2014, (appendix) between the year 2013 and 2014 our share value increased from 15.80 to 27.04 placing us ahead of everyone in our world. That is an increase of 172%. From out firm reports (appendix), our net income of 2,764,446 unfortunately fell short of our profit forecast. of 3,501,014. Even though our share holder’s value was the highest amongst our competitors, our profit before taxes was second to Bikes ‘R’Us by a total of $450,000. They had a profit of 4,339,987 while we only had a profit of 3,949,209. A part of the reason why our net income didn’t meet our forecasts and profit before taxes fell short of Bikes’R’Us is due to

a service department’s costs have been allocated, costs are not reallocated back to it under

Next comes “operating income”, which is revenues minus operating expenses, and generally referred to as EBIT, or earnings before income and taxes. In other words, this is a measurement of a company’s profits before all relevant deductions have been made. In our case, there was a significant increase of nearly 155 percent from year six to seven, and then another increase of over 60 percent in year seven to eight. The net earnings of Competition Bikes is up well over 300 percent for the first years of comparison, but declined over 80 percent between year seven and eight. This clearly indicates that factors have

The following is an analysis regarding if Competition Bikes Incorporated should change its traditional costing method to activity based costing (ABC). This consideration is being given because the organization is changing its sales strategy in the San Diego plant to produce 9 Titanium bikes for every 5 CarbonLite bikes, and there are indications that manufacturing will experience a 10% increase due to new environmental regulations.

• Given the changes in the company, there should be some periodic review of the organizational chart to assess whether changes are needed (having the same organizational structure for over 30 years may not be the most effective or efficient)

Cost measurement is the process of determining the dollar amount of direct materials, direct labor, and overhead that should be assigned to production. Cost accumulation is the process of associating costs with the units produced. Cost measurement is more about whether actual or estimated costs should be used, and cost assignment is about whether costs should be assigned to jobs or processes.

This report has been prepared to analyze the current costing method at Competition Bikes, Inc. (CBI) and provide a recommendation for improvement. To support this analysis, the differences between traditional based costing and activity based costing will be examined, along with the benefits and drawbacks for each method. A cost-volume-profit evaluation with break-even analysis for both sales units and sales dollars for the CarbonLite and Titanium bike lines will also be provided.

The purpose of this memorandum is to reflect the results of our due diligence on researching authorities related to the acquisitions made by Tom’s Tractor Supply Co. and Mills Machines, Inc.’s plans to change their policy of accounting for product recalls. The context of our research associated with these transactions, one undertaken and one planned, are twofold: International standards under IFRS and domestic U.S. standards under U.S. GAAP.

From the article it seemed that Baldwin Bicycle Company competed somewhere between a cost leader and a differentiator.

Would factory security and assembly activities be best classified at an appliance manufacturing plant as unit-level, batch-level, product-level, or organization-sustaining?