Classic Dog pen Case Article

ACC 341

Classic Pen Case Assignment

You should hand in one page of analysis and two sets of helping calculation.

The initially supporting calculations is an ABC program for Vintage Pen, constructed by completing the blanks in the subsequent table. Initially allocate the total expenses in each row to the numerous activities, based upon information in case. Then pick a cost driver and calculate the rate per unit of the cost driver.

Actions

Schedule &

Handle Development RunsSet up

MachinesKeep Item

RecordsRun MachinesTotal

Expenses

Roundabout labor & related fringes14, 00011, 2002, 800$28, 000* Computer systems$8, 000$2, 000$10, 000

Machinery8, 000$ almost 8, 000

Maintenance4, 000$ some, 000

Energy2, 000$ two, 000

Total activity costs22, 00011, 2005, 80014, 000 52, 000

Cost driver# of runsSetup timeDL HoursMachine Hours

Total quantity of price driver150 runs

(Exhibit 2)526 hours200010, 500

Allocation price per device of expense driver146. 6721. 292. 401. 40

*This includes half of the $16, 500 fringe benefits. The partner is linked to direct labor – don't forget to include this in your HURUF income declaration!

The second helping calculation is usually an FONEM income declaration showing sales revenue without each type of direct and indirect expense assigned to the four pencil types. Put two lines at the bottom in the income statement: one line shows the working profit per unit for each and every type of pencil based on the ABC calculations, and the other line displays the functioning profit per unit based on the traditional-income calculations in Exhibit 1 of the case.

The analysis includes answers towards the following questions (about one-half page each).

(a)Your ABC analysis should display that crimson pens are very unprofitable, while blue pens earn almost all of the factory's profits. One of the managers at Classic Pen inquiries your evaluation, saying, " I won't be able to believe will be certainly that much big difference in revenue per device between the blue and purple pens....

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