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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Case Name: Boston Creamery‚ Inc. Short Cycle Process: Who: Frank Roberts‚ VP Sales & Marketing‚ Boston Creamery‚ Inc. When: December 31‚ 1973 Where: Case facts not given Issues: 1. The current variance analysis used for the 1973 fiscal years shows an overall favorable net variance of $71‚700. This is an aggregate net figure based upon the favorable variance due to sales and the unfavorable variance due to operations. This net variance figure fails to highlight areas of deficiency to help identify
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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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Sou SOLUTIONS TO EXERCISES EXERCISE 18-1 (15-20 minutes) (a) Huish could recognize revenue at the point of sale based upon the time of shipment because the books are sold f.o.b. shipping point. Because of the return policy one might argue in favor of the cash collection basis. Because the returns can be estimated‚ one could argue for shipping point less estimated returns. (b) Based on the available information and lack of any information indicating that any of the criteria in FASB Statement
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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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EXERCISE 18-1 (10-15 minutes) Add or deduct from accounting income (a) 2 deduct (b) 1 add (c) 3 add (d) 1 add (e) 2 deduct (f) 2 deduct (g) 1 add (h 3 deduct (i) 3 deduct (j) 1 add (k) 1 add (l) 1 add EXERCISE 18-3 (15-20 minutes) (a) Accounting income $105‚000 Permanent differences: Non-deductible fines 11‚000 116‚000 Timing differences: Excess of CCA over amortization (16‚000 ) Excess rent collected over rent earned 24‚000 Taxable income $124‚000
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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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