Browse the case: Activity-Based costing, Task Costing, Price Allocation, and Cost systems, at Colorscope Inc, (attached).
Your crew has been asked by the administration of Colorscope, Inc to provide an overview from the issues facing the company. You are required to write a are accountable to the administration of Colorscope, Inc, addressing the following problems. The word limit on this statement is truck words +/- 10% allocation (excluding what in desks and calculations).
1 . Write an business summary to focus on the competitive advantages of Colorscope Inc, relative to its competitors, large marketing agencies and departmental stores, as listed in Exhibit several. (10 marks)
2 . Prepare a two stage price system showing the profitability of various jobs. To do this, you need to stick to these steps (30 marks):
п‚· choose source drivers to allocate the expense of resources to cot regularly п‚· Select cost individuals to designate the costs in numerous cost private pools to jobs п‚· Compute the cost travel rates
п‚· Calculate the profitability of each job (use an exhibit) 3. What you did in requirement 2 over is a " full costвЂќ analysis. This can be in contrast to " direct-costвЂќ evaluation that ignores overhead costs. Talk about whether total cost provides the right metric for job profitability and customer profitability. Also, go over the presumptions that are made regarding the variability of expenses when a " full-costвЂќ evaluation is used (10 marks) four. Discus the financial result of remodel. Also, make clear what alternatives are available for Colorscope to manage reworks (30 marks)
5. Talk about your advice (s) to solve the cost-quality trade-off problem (10 marks)
6. Should certainly Colorscope do anything about its incentive program? (10 marks)