Discuss the opportunities available in the cost accounting

Assignment Help Operation Management
Reference no: EM132035578

You have just been hired by Gracie Faye International (GFI) as a cost accountant. The company was named for the internationally popular Toka player, Gracie Faye. The company was started by John Smith who, in his basement, crafted a toka ball and beautifully strong toka stick for his daughter, Tresha, who played on a local team.

Tresha's team saw the benefit of Tresha's well-crafted equipment, and soon after, John was asked to equip the whole team. After the team won the championship, he was taking orders for the whole league and soon the whole toka world was knocking on John Smith's door.

From simple beginnings, GFI has branched out to other sports, taking their brand of solid construction to new heights. Their ping pong table is known as the elephant's dancing table, since ping-pong star Kevin "The Elephant" Pelinsky leapt onto a GFI table to dance across the net after he won a championship.

Founder Smith was quoted soon after saying, "all of our products have elephant dancing quality." Their bleachers sales skyrocketed after the collapse of a competitor in the early ‘90s, and a Department of Parks and Recreation remodeled all their baseball fields with GFI electronic scoreboards and their batting cages with GFI automatic pitching machines.

The CFO (your new department head) has asked you to prepare a report to submit to the top management of the company. It would seem that the CFO did not do a very good job justifying your position and what you can do for the company.

The CFO would like for you to explain cost accounting, as well as present information to the management team on product costs for the production of toka balls, specific job order costs for special order products and provide costing information for two models of pitching machines currently offered.

You will present all of this information in a management report divided up into four separate sections as described below.

PART 1: In this section of the report, your job is to explain cost accounting and what skills you can bring to the company. The CFO feels you should include an overview of what cost management is and some of its applications. Be sure to discuss the opportunities available in the cost accounting and how it relates to corporate strategy. This section of your report should be approximately two pages in length.

PART 2: In this section of the report, you are asked to classify the product costs for the production of toka balls. Classify each cost as:

fixed or variable

direct or indirect

Complete the table and include it in your report. The management team will require justification for each cost (i.e. why you classified the costs as you did).

Product CostVariableFixedDirectIndirect Electricity Real Estate Taxes Wood for toka sticks Leather to tie wood together Manufacturing Labor Water Lubricants for Machinery Equipment depreciation

Use Microsoft Excel to calculate your answers for Parts 3 and 4 and cut and paste the calculations from Excel into your report to show your work.

PART 3: The third section of the report should contain your computations for the month of July based on the information given below. The following information is available for a GFI division that produces electronic scoreboards. These are special order products that use a job order cost accounting system. The management team wants to see your calculations in your responses.

                                June 30                          July 31Inventories

Raw materials              62,000                         75,000

Goods in process          85,000                         95,000

Finished goods             103,000                        58,000

Activities and information for July

Raw materials purchases by cash  510,000

Factory payroll by cash  745,000

Factory overhead

Indirect materials  24,000

Indirect labor 132,000

Other overhead costs 220,000

Sales in cash 3,500,000

Predetermined overhead rate based on direct labor cost 52%

Compute the following amounts for the month of July.

Cost of direct materials used.

Cost of direct labor used

Cost of goods manufactured.

Cost of goods sold. (Do not consider any underapplied or overapplied overhead.)

Gross profit.

Overapplied or underapplied overhead.

PART 4: In the last section of the report, the management team would like to know the profits they can expect from the two models of pitching machines they currently manufacture. The softball pitching machine and the hardball machine make up the entire product line. To help determine the profit of each individual product, the CFO wants overheads to be allocated back to the products. Total inspection costs are $40,000.

The estimated production budget is as follows.

Softball pitching machineUnits20 unitsDirect labor hours per unit200 hours per unitNumber of inspections5 per unit

Hardball pitching machineUnits20 unitsDirect labor hours per unit200 hours per unitNumber of inspections15 per unit

Under a costing system that uses direct labor hours as a driver for the allocation, how much of the inspection costs would be allocated to softball machine?

Repeat the same question for hardball machine.

Using ABC and the number of inspections as a driver for allocation, recalculate the allocation for the softball machine.

Repeat the activity mentioned in question 3 for hardball machine.

You know that your report will be shared with senior level managers and eventually to the board of directors.

However, you are uncertain whether or not you will be allowed to present your work at a later time or in a different manner.

Therefore it is important that your report is well written, professional, includes an introduction and a conclusion, and follows APA standards.

Reference no: EM132035578

Questions Cloud

What is efficiency wage theory : Will employees shirk more or less and be more or less productive at their jobs when they are paid the above-market equilibrium wages by the firm?
Use of open-market operations to influence : How does the Federal Reserve's use of open-market operations to influence the money supply affect our economy and what are the respective consequences
Above-market equilibrium wages by the firm : Will monitoring costs decline or increase when employees are paid the above-market equilibrium wages by the firm?
Finish with selling the good or service to the customer : Explain, in detail how the product or service you have selected (koolaid) for your business plan will be produced.
Discuss the opportunities available in the cost accounting : Discuss the opportunities available in the cost accounting and how it relates to corporate strategy.
Calculate chelsea''s income elasticity of demand for cd : When Chelsea's income increased from $35,000 to $60,000 a year, her purchases of CDs increased from 10 to 40 CDs a year.
Review problem on health care delivery system : Impact on the Health Care Delivery System Include three peer-reviewed sources and two other sources to support the policy brief.
Marginal returns to labor begin to diminish : a. At what quantity of labor do the marginal returns to labor begin to diminish?
Should the machine be? purchased : The? firm's tax rate is 35 ?%, and its? after-tax MARR is 15 ?%. Should the machine be? purchased?

Reviews

Write a Review

Operation Management Questions & Answers

  Book review - the goal

Operations Management is about a book review. Title of the book is "Goal". This book has been written by Dr. Eliyahu Goldartt. The book has been appreciated by many as one of those books which offers an insight into the operations and strategic capac..

  Operational plan in hospitality enterprise

Operational plan pertaining to a hospitality enterprise is given in detail in the solution. The operational plan is an important plan or preparation which gives guidelines regarding the role and responsibilities of each and every operation at all lev..

  Managing operations and information

Recognise the importance of a strategic approach to the development and deployment of organisational information systems. Demonstrate an understanding of the importance of databases and their integration to the organisation's overall information mana..

  A make-or-buy analysis

An analysis of the holding costs, including the appropriate annual holding cost rate.

  Evolution and contributor of operations management

Briefly explain Evolution and contributor of Operations management.

  Functions and responsibilities of an operations manager

A number of drivers of change have transformed the roles, functions and responsibilities of an operations manager over recent years. These drivers have not only been based on technological innovations but also on the need for organisations to develop..

  Compute the optimal order quantity

Compute the Optimal Order quantity of DVD players. Determine the appropriate reorder point.

  Relationship to operations practice in the organisation

Evaluate problems in operations and identify approaches to overcoming them. Critically evaluate operating plans and identify areas for improvement. Justify, implement and evaluate changes to operations in line with modern approaches.

  A make or buy analysis

Develop a report for Figi Fabricating that will address the question of whether the company should continue to purchase the part from the supplier or begin to produce the part itself.

  Prepare a staffing plan

Prepare a staffing plan showing the change of your unit from medical/surgical staffing to oncology staffing.

  Leadership styles in different organizations

Ccompare the effectiveness of different leadership styles in different organizations

  Risk management tools and models

Be able to understand the concept of risk, roles and responsibilities for risk management and risk management tools and models.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd