1.Based on the interviews and data in the case‚ we calculated the following information. (1)The cost of processing cartons through the facility: Personnel expense (warehouse‚ truck drivers)2‚570‚000 ¡ÐCompensation for truck drivers ( 250‚000) Warehouse personnel expense $2‚020‚000 ¡ÏWarehouse expenses (excluding personnel) 2‚000‚000 $4‚020‚000 (2) The cost of entering electronic and manual customer orders: Order entry expenses $ 840‚000 (3) The cost of shipping cartons on commercial
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Midwest Office Products Aaron Wilson‚ Brittni Henson‚ Dennie Smyth & Joshua Boatright Midwest Office Products Case ACCT. 6233 October 15‚ 2012 1. Based on the interviews and data in the case‚ estimate: a. The cost of processing cartons through the facility The two costs of processing cartons through the facility are warehouse costs and warehouse personnel costs. The total processing costs are $54/carton. Cartons/yr | 80000 | Commercial Freight | 75000 | Desktop Delivery | 5000
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Regional distributor of office supplies • Writing implement (such as pens‚ pencils and markers) • Specialty paper for printing machine 4 Part I. Introduction How we operate? • Collaborate with different suppliers • Self own distribution center( warehouse + data processing system) 5 Part I. Introduction How we operate? • Unload Cartons Warehouse • Receive order Accumulate the cartons Shipment 6 Part I. Introduction How do we price our product? • Warehousing‚ order
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Case Overview: MidWest Office Product was a regional distributor of office supplies to institutions and commercial businesses. The company offered a comprehensive product line like simple writing implements and fasteners to specialty paper for modern high-speed copiers and printers. Warehouse personnel in the company’s distribution center unloaded truckload shipments from manufactures‚ and moved the cartons into designated storage location until customers request the items. Typically‚ the company
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Activity Based Costing Implementation for a Not-For-Profit Darrell Ament‚ Author The author was tasked with setting up an activity based costing (ABC) system for a not-for-profit organization. The first thing done by the author was to use the internet to research the use of ABC systems for non-profits. The result was the conclusion by the author that QuickBooks’ class feature could be used to track expenses‚ revenues and balance sheet costs for the implementing ABC. Income‚ Revenue and Balance
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chain activities Main activities: a. Investment activities‚ such as receiving‚ storage and configuration and other related activities; b. Production operation‚ forthcoming input into the end product of related activities; c. Productive activities‚ such as finished goods transportation‚ storage‚ customer contact‚ order processing‚ etc. d. Sales activities to let customers understand and buying of goods‚ such as advertising‚ promotion‚ marketing agency costs‚ etc; e. Service activities‚ including
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Questions: Dakota Office Products 1. Why was Dakota’s existing pricing system inadequate for its current operating environment? Dakota’s existing pricing system was inadequate for its current operating environment because the pricing was based on traditional allocation of overheads. The result of which were that the actual costs incurred for fulfilling the orders of customers were not ascertained. There were two effects of this method. First‚ the overall prices of all the products increased. Second
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Cost Allocations & Activity Based Costing (ABC) Abstract The cost allocation is a process of assigning costs to different activities. There is several methodology of cost allocation. The cost driver allocates costs into different activities and locations. Health organizations use different allocation methods according to their needs to attain organization and profitability. The purpose of allocation is to make the understanding
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Dakota Office Products Q1) Why was Dakota’s existing pricing system inadequate for its current operating environment? The existing policies being followed by Dakota regarding Accounts receivables are a major issue‚ which is affecting its payment of working capital line of credit (@10%). Customer A pays its bill within 30 days‚ whereas B takes up 90 days or more. Dakota can achieve sufficient liquidity‚ if it tightens its credit policy. | | | | | 2) Develop an activity based cost
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15.514 Summer 2003 Session 17 Activity-Based Costing Objectives 1. Computation of product costs using ABC 2. Understand the role of judgment: how are cost pools and cost drivers determined? 3. Link cost data to strategic choices Game Plan & Class Pedagogy Case discussion. Reading Assignment CP: Siemens Electric Motor Works Class Preparation Questions Focus your group’s attention on the qualitative questions (1 -6). Attempt to answer questions 7 and 8 before coming to
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