Read the cases and find out the following required information.
Required: 1 Calculate the material handling rate that would have been used by Eloise Smith’s predecessor at East Coast Marine. 2 (a) Calculate the revised material handling costs to be allocated on a per purchase order basis. (b) Discuss why purchase orders might be a more reliable cost driver than the dollar amount of direct material. 3 Calculate the difference due to the change to the new method of allocating material handling costs to government contracts. 4 Prepare a forecast of the cumulative dollar impact over a three year period (based on the coming year plus 2 more years) of Eloise Smith’s recommended change for allocating Material Handling Department costs to the Government Contracts Unit. Round all calculations to the nearest whole number. 5 Referring to the standards of ethical conduct for accountants described in Chapter 1: (a) Discuss why Eloise Smith has an ethical conflict. (b) Identify several steps that Smith could take to resolve the ethical conflict.
CCMA. act.4preal
Required: I Describe the changes in cost structure that are likely to have occurred at Cravings for Cakes over the last 20 years, and explain their causes. 2 Do you think that the existing costing system understates or overstates the cost of: (a) Lamington? (b) Danish pastry? Explain your answers. 3 Explain how activitybased costing could overcome the deficiencies inherent in the existing costing system. 4 What factors should U.B. Bright consider when deciding whether to use: (a) Simple activitybased costing system to assign manufacturing overhead to products? lb) Activity based system that includes both manufacturing overhead and non manufacturing costs? Cc) Comprehensive activity based system that includes all product related costs except direct material?
Attachments:
CASE studies.pdf