Explain why the management accounting information from

Assignment Help Financial Accounting

Reference no: EM13378127

Explain why the management accounting information from the traditional responsibility accounting system fails to provide a greater strategic focus?
Give one example of an appropriate performance measure for each of the responsibility and the process-orientated accounting systems.
Explain four key features of a good process-oriented management accounting system.

Wallace Communications Ltd produces paints and primers in its factory.In recent years, the company's market share has been eroded by stiff competition from overseas. Two years ago, the company's CEO decided to devote more resources to improving product quality. He set up a task force from various areas of the factory, including: production, customer services, sales, and accounting.

Cost Item	Year 1	Year 2
Machine maintenance..................	$ 215,000	$160,000
Final testing ..............................	160,000	94,000
Warranty repairs........................	69,000	23,000
Customer returns	262,000	80,000
Incoming inspection	45,000	22,000
Training suppliers	5,000	15,000
Scrap	68,000	40,000
Rework	120,000	62,000
Design reviews	20,000	95,000
Total Quality Cost	$964,000	$591,000

Total production costs for year 1 was $4,120,000 and for year 2 was $4,510,000.

Required:

(a) Prepare a Quality Cost Report for Wallace Communications Ltd.

(b) By analysing the quality cost report you prepared above, determine if the company's quality improvement programme has been successful.

(c) There are different views of how quality can be managed. While a certain level of quality may be accepted, there is an argument to aim for the highest level of quality. Discuss these two views of "quality as cost" and "quality as value".

Reference no: EM13378127

Questions Cloud

1 occurs when a firm cuts prices below production costs in : 1. occurs when a firm cuts prices below production costs in a deliberate attempt to drive competitors out of business.

Mick and donald run a fast food outlet on queen street for : mick and donald run a fast food outlet on queen street. for most of the day mick and donald are able to keep up with

Countries x and y differ in population growth rates and : countries x and y differ in population growth rates and rates of investment.country x investment or savings is 20 of

A country is described by the solow model with a production : a country is described by the solow model with a production function y k12 where y is output per worker and k is

Explain why the management accounting information from : explain why the management accounting information from the traditional responsibility accounting system fails

1 according to one automobile group after the city imposed : 1 according to one automobile group after the city imposed the congestion fee average speeds in central londona

1 the focus of management accounting over time has changed : 1. the focus of management accounting over time has changed. which is the correct historical order for the following

How have you responded to increases in the price of : how have you responded to increases in the price of gasoline over the past few years? how would you respond if the

1 a monopolist is aa-price takerb-price setterc-cost : 1. a monopolist is aa-price taker.b-price setter.c-cost maximizer.d-quantity taker.2. in perfectly competitive markets

User Account

All Pages