Preview

1. Calculate the revised product costs for the four pens, based on the activity information collected by Dempsey

Good Essays
Open Document
Open Document
921 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
1. Calculate the revised product costs for the four pens, based on the activity information collected by Dempsey
1. Calculate the revised product costs for the four pens, based on the activity information collected by Dempsey1. Calculate the revised product costs for the four pens, based on the activity information collected by Dempsey1. Calculate the revised product costs for the four pens, based on the activity information collected by Dempseyvvv1. Calculate the revised product costs for the four pens, based on the activity information collected by Dempsey1. Calculate the revised product costs for the four pens, based on the activity information collected by Dempsey1. Calculate the revised product costs for the four pens, based on the activity information collected by DempseyACCT81701: INTERNAL COST MANAGEMENT AND CONTROL
CLASSIC PEN COMPANY: DEVELOPING AN ABC MODEL CASE
SUMMER 2014
Assignment:
This case may be completed in groups of two or individually. You are responsible for finding a partner if you choose to complete the case with another student.

Purchase and read the Harvard Business School Case: Classic Pen Company: Developing an ABC Model located at the following link: https://cb.hbsp.harvard.edu/cbmp/access/27312446. (Note: The last case for the course, Foxy Originals is also contained in this course pack and should also be purchased for your final case).

After reading the case, perform the following:
1. Calculate the revised product costs for the four pens, based on the activity information collected by Dempsey. Prepare this analysis using an excel spreadsheet (please print out the spreadsheet on one page – it should fit).
2. Prepare a new Income Statement, using excel or word, for Classic Pen (by product and in total) using the ABC cost information (please print this out on one page).
3. Compare the ABC Income Statement to the Traditional Income Statement presented in the case.
4. Based on this comparison, write a memo, to me, addressing the actions this new ABC cost information could stimulate Classic Pen to pursue. Be thorough while still

You May Also Find These Documents Helpful

  • Good Essays

    Acct310 Unit 3

    • 535 Words
    • 3 Pages

    Using the estimated sales and production of 10,000 pair of skis as the expected volume, the accounting department has developed the following cost per pair of skis and bindings:…

    • 535 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Michael Williams 11/22/14 Exercise 7-38: Activity Rates, page 323 1. Plastic injection molding activity ; Activity rate is 18 cent per unit 2. Decal application activity; Activity rate is 36 cent per unit Exercise 7-40: Activity-Based Product Costing, page 324 Attached File!…

    • 98 Words
    • 1 Page
    Satisfactory Essays
  • Satisfactory Essays

    Luxor Case Answers

    • 327 Words
    • 2 Pages

    The calculation that converts the Wholesale selling price of the 12/31/2008 lipstick inventory shown as $11.5 million to the “cost” of $9.7 million:…

    • 327 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Consumer Math test 2

    • 582 Words
    • 4 Pages

    2. You pay the following for supplies: $19.36 for pens; $21.75 for notepads; and $32.26 for computer…

    • 582 Words
    • 4 Pages
    Satisfactory Essays
  • Powerful Essays

    Anagene In

    • 1220 Words
    • 9 Pages

    The cartridge margins shown in Tables A and B vary from 17% to 65%. What elements of cost account for the difference between the 2000 Actual and 2001 Budget margins in Table A? What elements of cost account for the difference between the margins in the original 2001 Budget in Table A versus the revised 2001 Budget in Table B? For each element, why do you think costs changed between 2000 and 2001 between the original and revised budgets in 2001? What would you predict for each cost in the long-run?…

    • 1220 Words
    • 9 Pages
    Powerful Essays
  • Satisfactory Essays

    1. Identify whether each of the items below is a Product Cost or Period Cost: (1/2 point each, total 5 points)…

    • 477 Words
    • 5 Pages
    Satisfactory Essays
  • Satisfactory Essays

    The three valuation method alternatives are: actual, normal, or standard. The Actual cost systems assign the actual costs of direct material (DM), direct labor (DL), and overhead (OH) to Work in Process (WIP) Inventory. A normal cost system that combines actual direct material and direct labor costs with predetermined overhead rates. Standard cost system a valuation method that uses predetermined norms for direct material, direct labor, and overhead to assign costs to the various inventory accounts and Cost of Goods Sold (Kinney & Raiborn, 2013, pp 151 & 816).…

    • 323 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Energy Gel Case Summary

    • 482 Words
    • 2 Pages

    HPC is deciding on whether or not to launch a new product line. Furthermore, if the company decided to proceed with the project, then the new product, Energy Gel, should be evaluated. The Energy Gel case describes three approaches in order to estimate project costs which are direct cost advocated by Harry Wickler, full cost supported by Mark Leiter, and equipment based costing supported by Frank Nanzen. The direct costing basis only considers the variable costs that are directly identified with the Energy Gel project. However, it ignores many costs or benefits including cannibalization of the existing Energy bar product, use of valuable excess capacity, and the possible increases in the overhead expenses. On the other hand, in full costing basis, Leiter considers the project as a stand-alone entity, which ignores benefits from the use of excess capacity and fixed cost activities. Lastly, the equipment- based costing by Nanzen proposes that Wickler…

    • 482 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Silven Industries Memo

    • 709 Words
    • 3 Pages

    Our new product line, “Chap-Off”, have total costs of $7.00 per box if we plan to produce it internally. This total cost per unit consists of $3.60 for direct material, $2.00 for direct labor, and $1.40 for manufacturing overhead. Moreover, a $90,000 charge for fixed manufacturing overhead will be absorbed by the product under the company’s absorption costing system.…

    • 709 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Costs and Direct Material

    • 424 Words
    • 2 Pages

    Moravia Company processes and packages cream cheese. The following data have been compiled for the month of April. Conversion activity occurs uniformly throughout the production process.…

    • 424 Words
    • 2 Pages
    Good Essays
  • Good Essays

    ACC 206 WK 3 JOURNAL

    • 583 Words
    • 2 Pages

    In at least one paragraph, describe the costing system that you would recommend Hershey use to account for its cost of goods sold and why. Include a few product costs you think would be traceable, which costs should be allocated and how Hershey should account and apply the manufacturing overhead costs.…

    • 583 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Curled Metal

    • 1589 Words
    • 7 Pages

    As the reference product the data is taken into account as shown in the Tables for Kendrick and Corey. Assumption is by disregarding the competition response(it is very innovative and totally different product), current pad cost of Kendrick and Corey should be the best alternative to use as reference. So it is basically $6.25/pad for Kendrick and $10/pad for Corey.…

    • 1589 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    Fi515 Week 5 Project

    • 463 Words
    • 2 Pages

    You have been asked by the president of your company to evaluate the proposed acquisition of a new spectrometer for the firm’s R&D department. The equipment’s basic price is $70,000, and it would cost another $15,000 to modify it for special use by your firm. The spectrometer, which falls into the MACRS 3-year class, would be sold after 3 years for $30,000. Use of the equipment would require an increase in net working capital (spare parts inventory) of $4,000. The spectrometer would have no effect on revenues, but it is expected to save the firm $25,000 per year in before-tax operating costs, mainly labor. The firm’s marginal federal-plus-state tax rate is 40%.…

    • 463 Words
    • 2 Pages
    Good Essays
  • Better Essays

    3. Determine the total cost of ending work in process inventory and the total cost of units transferred to the Packaging Department.…

    • 884 Words
    • 4 Pages
    Better Essays