Compare the product costs calculated

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Reference no: EM131974345 , Length: word count:900

Management Accounting Assessment Task - Case Study

Case -

Happy Traveller Ltd. is a manufacturing company which is in the process of determining the product costs using traditional costing system as well as ABC system. Sufficient cost data information is provided in the case so that you are able to derive the product costs of its two main types of upscale luggage. The requirements listed at the end of the case are the main points that your report must cover.

Happy Traveller Ltd has historically had a simple costing system that allocates indirect costs using a single indirect-cost rate. The Company produces mainly two types of luggage, namely Simple luggage and Complex luggage, and undisclosed amount of other types of luggage. The annual overhead costs for the Happy Traveller Ltd, which involves three production centres (two machine centres and one assembly centre) and two service centres (materials procurement and general factory support), are as follows (in attached file).

Required:

1) Perform overhead analysis systematically firstly based on traditional costing system. The overhead analysis under traditional costing system involves two-stage allocation process by assigning all manufacturing overheads to production and service cost centres, and followed by reallocating the costs assigned to service cost centres to production cost centres. Provide the calculations of the manufacturing costs assigned to the two products (Simple luggage and Complex luggage).

2) Perform again the overhead analysis using Activity-based costing (ABC) system. The overhead analysis under ABC system involves assigning costs to activity cost centres. Provide the calculations of the manufacturing costs assigned to the two products (Simple luggage and Complex luggage) based on ABC system.

3) Compare the product costs calculated under the traditional costing system and ABC system and explain the rationale behind the differences in product costs calculated under the two costing systems.

4) Analyse the cost versus benefit considerations in adopting ABC system in Happy Traveller Ltd.

5) Explain in details in what ways the ABC cost management can be applied in Happy Traveller Ltd besides assigning costs to its products.

Your report: There are four sections in your report.

Introduction -

Explain the purpose of this report
The significance of traditional costing systems and activity based costing
Cite references to support your discussion in the section

Discussion -

For Happy Traveller Ltd case, show the workings of the above requirements 1) to 3)

Requirement 1) traditional costing system
Requirement 2) ABC
Requirement 3) compare traditional costing system and ABC

Conclusion -

For Happy Traveller Ltd case, give answers for the above requirements 4) to 5)

Requirement 4) Analysis the cost and benefit

Requirement 5) Apply ABC to the company

References -

Provide a reference list here. You are expected to use journals and textbooks published after 2008. Cite references in Harvard referencing style.

Attachment:- Assignment File.rar

Reference no: EM131974345

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Reviews

len1974345

5/8/2018 12:35:35 AM

Instructions for this task - All assignments must be handed in on the due date. Late assignments will be penalised. Assignments submitted after the due will incur a 10% penalty of the maximum marks available for that assignment. Assignments received more than three calendar days after the due date will not be allocated a mark. Due dates will be strictly adhered to and extensions will be granted only in cases of extreme circumstances. A student may apply to the NLiC for an extension to the submission date of an assignment.

len1974345

5/8/2018 12:35:30 AM

Requests for extension must be made on the appropriate form on or before the due date for submission, and must demonstrate exceptional circumstances which warrant the granting of an extension. Each student is to submit an individual assignment based on the given case below. The individual assignment should be around 900 words (numerical data as part of the calculations is not included in the word count).

len1974345

5/8/2018 12:35:24 AM

Please note that the topic of the case study is covered only in Week 8 (Chapter 8) and the due date of this assessment is in Week 11, 11PM). Student is expected to acquire the knowledge/ learn the topic of the case study on his / her own in advance of week eight, so that there is ample time for preparation of assessment Task 2. As this assessment Task 2 is of individual basis, collaboration between students in the assignment is prohibited. Submission showing similar format of presentation in calculations among students may indicate presence of plagiarism and implicated students may have committed academic misconduct knowingly or unknowingly.

len1974345

5/8/2018 12:35:17 AM

Task 2 must: Be typed using 1.5 lines spacing left justified. Use Ariel or Times New Roman font size 12. Display a 2.5 cm margin on all sides. Include a page number on each page. Name the Microsoft word file as “your student number_ACCT204_Task2”. Provide a reference list here. You are expected to use journals and textbooks published after 2008. Cite references in Harvard referencing style.

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