costing method (Volume Based Costing): • California Creamery has a budgeted manufacturing overhead of $600‚000 and a budgeted direct labour cost of $300‚000 • Overhead rate per direct labour cost => $600‚000/$300‚000 = $2 From Exhibit 2 CALIFORNIA CREAMERY‚ INC. Two Product Examples (2004 Data) Polynesian Fantasy • Direct labour $1.20/gallon Overhead assigned to: Vanilla $1.20/gallon Polynesian Fantasy = $2 * $1.20 = $2.40 /gallon Vanilla = $2 * $1.20 = $2.40 /gallon 1a) Based on Will’s
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Natalie Simmermon ACC 503 California Creamery‚ Inc. (Activity-Based Costing) 1. What is the cost of the two products under traditional costing? Under traditional accounting the costs for each flavor were intuitively wrong. The cost to produce a gallon of Polynesian was $5.60‚ only 20 cents more than Vanilla comparatively. One would assume that an exotic flavor would have a significantly higher cost proportionally. 2. What is the cost of the two products under activity-based costing
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MEMO Date: October 20‚ 2014 To: Mr. Jim Peterson‚ President‚ Boston Creamery‚ Inc.‚ Ice Cream Division From: Subject: Evaluating the decision choices of Boston Creamery to improve budgeting Introduction Boston Creamery is currently experiencing difficulties with regards to its budgeting process and variance analysis. For the fiscal year 1973‚ the Ice Cream Division has a favorable operating income variance of $71‚700. The President‚ Jim Peterson feels that the comparisons between budgeted
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Drury‚ Management and Cost Accounting – Boston Creamery Boston Creamery Professor John Shank‚ The Amos Tuck School of Business Administration Dartmouth College This case is reprinted from Cases in Cost Management‚ Shank‚ J. K. 1996‚ South Western Publishing Company. The case was prepared by Professor John Shank from an earlier version he wrote at Harvard Business School with the assistance of William J. Rauwerdink‚ Research Assistant. This case deals with the design and use of formal "profit
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EXECUTIVE SUMMARY Boston Creamery‚ Inc‚ is an ice cream company that manufactures and distributes ice cream to wholesalers and retailers. In 1973‚ the company had installed a new financial planning and control system that compares budgeted results against actual results and be able to highlight things that needed corrective actions or commend things that resulted in a favorable overall variance. This year‚ the division has a favorable operating income variance of $71‚700. Highlights: · Jim
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System Study of New Zealand Creamery‚ Inc. In Partial Fulfillment Of the Requirements for the Course COMS331P – Practicum Submitted to Ms. Roda N. Sanares Faculty‚ Computer Studies Department De La Salle University – Dasmariñas College of Science Dasmariñas‚ Cavite Vernon Edward E. Guintu BCS32 6/1/2012 1. Company Background a. History of the Company The company started out in 1958 as a joint venture with New Zealand Dairy Board. Under this
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can highlight areas which are to be addressed urgently. As per the case‚ they only wish to see the items that need their concern so that action can be taken the next year‚ 1974. Boston Creamery must increase advertisements of their products to address the increase in market size. Boston Creamery‚ Inc. lost 1.0% market share – from 50% to only 49%‚ despite the favorable increase in market size variance of $ 167‚610.00 (See Exhibit 2). This was highlighted from the unfavorable result of $ 55‚266.00
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Case 4: Boston Creamery Introduction A new financial planning and control system is only as good as a company’s capacity to implement it effectively. But most importantly‚ many employees see the new system as an end in itself‚ instead of a means to an end. The way standards are formulated play a crucial role in the results of these variances. For instance‚ management decided to use the sales forecasts based on what they made and incurred in the previous year. This would normally be the case
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Cold Stone Creamery. The first thing that we had to do was find out what franchising really was. We all had a basic understanding of what franchising was and to become a franchisee‚ but after further research we realized there was a lot more that we didn ’t know. We researched everything we could about Cold Stone Creamery. We conducted a survey to find out if Cold Stone really was everyone ’s favorite ice cream place. We found out the mission and the vision that Cold Stone Creamery has for their
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1. Activity Based Costing benefits businesses that are more complex in nature. In this case‚ Greetings. INC has added a new product line‚ Wall Decor‚ which permits them to grow without expanding their physical stores; however‚ they have significantly raised their overhead costs by multiplying their cost drivers. Not to mention the fact that they have incorporated a largely automated system into their product line‚ which we know calls for an ABC system. The main reason to move to ABC though‚ would
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