Seligram, Inc.: Electronic Testing Operations
1. What caused the existing system at ETO to fail?
2. Calculate the reported cost of the five components listed in Exhibit 6 using:
a. The existing system.
b. The system proposed by the accounting manager.
c. The system proposed by the consultant.
3. Which system is preferable? Why?
4. Would you recommend any changes to the system you prefer? Why?
5. Would you treat the new machine as a separate cost center or as a part of the main test room?
Bridgeton Industries: Automotive Component & Fabrication Plant
1. The official overhead allocation rate used in the 1987 model year strategy study at the …show more content…
1. Based on the 2004 statement of profit and loss data (Exhibits 1 and 2), do you agree with Waters’ decision to keep product 103?
2. On January 1, 2006, should the company reduce the price of product 101? To what price?
3. What is Superior’s’s most profitable product?
4. What appears to have caused the return to profitable operations in the first six months of 2005? How useful was the data in Exhibit 4 for the purpose of this analysis?
5. Why is it important that Superior has an effective cost system? What is your overall appraisal of the company’s cost system and its use in reports to management? List the strengths and weaknesses of this system and its related reports for the purposes management uses the system’s output. What recommendations, if any, would you make to Waters regarding the company’s cost accounting system and its related reports?
Cafes Monte Bianco: Building a Profit Plan
1. Use a profit plan model to evaluate the attractiveness of switching all production to private brand coffee. Estimate key accounting variables relating to profitability and cash flow for this alternative.
2. Based on your analysis, what recommendations would you make to Giacomo Salvetti?
3. What assumptions did you make to complete your analysis? How critical are these assumptions to your conclusions?
4. Prepare a list of additional assumptions that you would