Decision at Applied Office Product Company ’s Background In 1992‚ Allied Office Products was a corporation with annual sales of $900 million. It deals with manufacturing of following forms : * Business Forms * Specialty paper product such as writing paper‚ envelopes‚ note cards‚ and greeting cards In 1988‚ as form manufacturing business matures‚ Allied Office Product had expanded into business form inventory management system and put a step ahead to attain a competitive advantage by embarking
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Case: Allied Office Products Company A costs Allied less money to service‚ they are also a much smaller source of potential growth for the company. Company B on the other hand utilizes far more services and has the potential to earn Allied much greater revenue. With the information we have from the new ABC costing scheme we now know that Allied should be charging far more for the services rendered to company B‚ and less for the services used by company A. Current information shows that company
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Question 1 Activity Based Service Cost for the TFC business Activity | Total Activity Cost (’000) | Activity Driver | Usage | Actual Cost | Storage | $ 1‚550 | Number of Cartons | 350‚000 | $ 4.43 | Requisition Handling | $ 1‚801 | Number of Requisition | 310‚000 | $ 5.81 | Basic Warehouse stock selection | $ 761 | Number of Requisition × 2.5 lines | 775‚000 | $
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Case: Allied Office Products Company A costs Allied less money to service‚ they are also a much smaller source of potential growth for the company. Company B on the other hand utilizes far more services and has the potential to earn Allied much greater revenue. With the information we have from the new ABC costing scheme we now know that Allied should be charging far more for the services rendered to company B‚ and less for the services used by company A. Current information shows that company B
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Allied Office Products Case Objective: This case provides practice in Activity-Based- Analysis (ABC) calculations for a service company. It also highlights the important considerations in moving from ABC to Activity-Based Management (ABM) and further into Strategic Cost Management (SCM) so as to influence customer behavior and profitability. Q1. Using the information in Exhibit 2 calculate ABC based service costs for the TFC distribution/warehouse services. These are some broad steps that
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entry 0.79 910 718.61 2‚500 1‚974.19 Desk top delivery 29.41 - - 26 764.71 Inventory handling 1‚950.00 6‚815.00 Freight - 52 2‚250 156 7‚500 Cost of distribution 10‚434.51 29‚829.21 Cost of product 50‚000 50‚000 Total cost 60‚434.51 79‚829.21 Sales income 79‚320 79‚320 Profit 18‚885.49 -509.21 3. What inference do you draw about the profitability of these two customers? I assume customer A has a much
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cost determination for individual customers - wrong cost determination for new services provided by DOP (to small charges for the “desktop” delivery‚ then the actual cost of it) 2. Develop an activity-base cost system for Dakota Office Products based on Year 200 data. Calculate the activity cost-driver rate for each DOP activity in 2000. Activity cost-driver rates: Activity One: process cartons in and out of the facility Rate=(90% of Warehouse Personnel Expense + Cost o Items
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assigned and allocated to products and services delivered to clients. This system has proven beneficial for companies where production operations are high labor intensive and overhead costs are smaller part of total costs. Nowadays‚ when automation and technology are ubiquitous overhead costs make up much higher percentage and are often lumped together with direct labor costs. An ABC approach would be much more appropriate for the DOP’s business as it will calculate costs of products and services based
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Description In ACC 301‚ you discussed the Dakota Office Products (DOP) case and were asked to design the ABC system. For this assignment in BCOM 250‚ you will take what you learned in ACC 301 and write a report recommending that DOP use activity-based costing to determine its pricing to customers. You do not need to go into deep detail about how you would design the ABC system. You will work with a team of 4-5 people to produce this deliverable. Assume that your group is part of the accounting staff
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Allied Products Assignment Allied Products‚ Inc.‚ has recently won approval from the Federal Aviation Administration (FAA) for its Enhanced Ground Proximity Warning System (GPWS). This system is designed to give airplane pilots additional warning of approaching ground danger and thus help prevent crashes. Allied Products has spent $10 million in research and development the past four years developing GPWS. The GPWS will be put on the market beginning this year and Allied Products expects it
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