Week 3 Acct2522

Framework for Analysis We will examine the given data from the case and compare the unit costs from the company’s current costing system (traditional costing) and from activity-based costing. We will also highlight other qualitative data in consideration with the numerical factors that may result to a significant change on our recommendation.

Management Consultants Report Executive Summary John Deere Component Works (JDCW) has been subject to a number of unsuccessful competitive bids due to the inherent deficiencies of their existing costing system. This has illustrated the importance of obtaining a thorough understanding of costs, and desirability of implementing a superior costing system. This report contains:

Now one must ascertain that such regulations would only be applied under certain governance systems- a good government; a government that is liable to the people. In such cases, there should be funds available for social programs. I will classify social programs as two types, based on how they should

REFERENCES Hilton, R. (2011). Managerial accounting: Creating value in a dynamic business environment (9th Ed.). McGraw-Hill. Hardcover ISBN: 9780073526928.

After Glaser management has identified the handful of the activities that connect overhead expenses to products, they must use the appropriate measure (the cost driver) to tie the overhead expenses to the product lines or service lines. To achieve this management must specify an appropriate cost driver for tracing costs associated with the various levels of activities to the next cost objective or products. The cost drivers can include a number of things such as direct labor hours, number of batches, or number of employees. (Appendix C shows the appropriate cost driver with the various levels of activities).

“The ACH procedure has the offsetting advantage of focusing attention on the few items of critical evidence that cause uncertainty or which, if they were available, would alleviate it.” (Heuer, 1999). Conclusions are derived from analysis of data, evidence is compared to possible hypotheses, and a hypothesis assessment is based on the reliability of the sources and validity and plausibility of the intelligence. Confidence levels are labeled as high, moderate, and low by ICD 203 standards.

Entrance Examination Syllabus Reference Material Copyright 2006 The Society of Management Accountants of Canada All rights reserved. No part of this manual may be reproduced in any form without the permission of the copyright holder.

Chadwick, L. (2002) Essential Finance and Accounting for Managers. Harlow, London, New York, Massachusetts, San Francisco, Toronto, Son Mills, Sydney et.al: PearsonEducation, p.280-281

In this report, I will provide a discussion of how activity-based costing (ABC) may assist Sierra Ltd to address its current issues. With the fragmented market in the recent past, companies are using different costing and pricing strategies to remain competitive. Organisations have implemented product diversification and automation. This trend

11 Activity-Based Costing – key features •  An activity is defined as any event that causes the consumption of overhead resources. •  An activity cost pool is a “bucket” that accumulates all costs related to a single activity measure. •  An activity measure is an allocation base in an ABC system. It is also referred to as cost driver. §  Transaction drivers – number of times an activity occurs §  Duration drivers – amount of time required to perform an activity

Activity-based management, activity-based costing and continuous improvement, all these help in the improvement of the efficiency in manufacturing, better control of overhead costs and the accurate costing of products. With this in mind, We disagree with the advice that Chuck Davis, the firm’s controller, gave Leonard Bryner. The traditional way of costing produce average costs that severely overstated or understated. Without the accurate costs, the firm would not be able to price properly their products and that would be damaging to the firm. With activity-based costing and management, all costs are accounted for with the help activity-drivers and overhead costs are decreased. In turn, the costs that the firm has for their products are more accurate and pricing is much easier.

State the title and source (including date) of the article: Accounting for Flexibility and Efficiency: A Field Study of Management Control Systems in a Restaurant Chain - By Thomas Ahrens (London School of Economics), and Christopher Chapman (University of Oxford), from The Contemporary Accounting Research Vol. 21 No. 2 (Summer 2004) pp. 271–301.

INTRODUCTION TO THE CORPORATE ANNUAL REPORT: A Business Application with IFRS Content 3rd edition Copyright 2011 by Applied Accounting Analytics. All rights reserved. Reproduction or translation of this book beyond that permitted by the applicable copyright law without Applied Accounting Analytics’ permission is prohibited. Requests for permission to reprint or for further information should be directed to bstanko@luc.edu or tzeller@luc.edu.

element of subjectivity into accounts. Bibliography Brown, R. (1998). Financial Accounting Theory. Longman: Australia. Deegan, C. (2000). Australian Financial Accounting. McGraw-Hill: Australia Henderson, S., Graham., & Harris, K. (2004). Financial Accounting Theory. Prentice Hall: Australia. Laing, G. (2000). Chambers Continuously Contemporary Accounting. Journal of Accounting. Retrieved August 24, 2004, from www.tasa.org.au

In the study of fixed costs behaviour, authors have identified a certain range of activity over which the firm expects a set of cost behaviours to be consistent. They have termed this range “relevant range”, which is a term used to describe the range of activity (units of production) for which cost behaviour patterns are likely to be accurate. It is up to the cost accountant to determine the relevant range and make clear to management that estimates being made for activity outside of the relevant range must be analyzed carefully for accuracy.