Using the same WORD document, prepare memo #2 to management first explaining the two approaches to...

Transcribed Image Text:

Using the same WORD document, prepare memo #2 to management first explaining the two approaches to determining a client's profitability. Your memo should include at east two professional sources that address the issues related to Activity-Based Costing. Be sure to cite your references. Show a comparison of the costs assigned to each client under (1) traditional costing and (2) activity-based costing. Be sure to refer to actual cost differences. Provide a detailed explanation for why there are differences between traditional and the six cost pool ABC analysis. Your explanation should discussion how different activities consume different resources. It should also identify the ways management could use the information to make better decisions for the firm. Conclude with a recommendation for how to use the information generated by the ABC analysis to better manage the firm's resources. Your memo will include advantages as well as disadvantages of activity-based costing as you anticipate resistance from two partners. You will also discuss how to overcome resistance to change. The partners agree the ABC costing model provides better information and will consider mplementing it. However, they feel you should now focus your attention to whether or not to continue in-house library and research services or outsource these services to an external firm. You have requested quotes from vendors who supply this service. One vendor is willing to provide the service at a flat fee of $9,500 per month. Another vendor will provide the service based on an hourly fee of $30. Using the same WORD document, prepare memo #2 to management first explaining the two approaches to determining a client's profitability. Your memo should include at east two professional sources that address the issues related to Activity-Based Costing. Be sure to cite your references. Show a comparison of the costs assigned to each client under (1) traditional costing and (2) activity-based costing. Be sure to refer to actual cost differences. Provide a detailed explanation for why there are differences between traditional and the six cost pool ABC analysis. Your explanation should discussion how different activities consume different resources. It should also identify the ways management could use the information to make better decisions for the firm. Conclude with a recommendation for how to use the information generated by the ABC analysis to better manage the firm's resources. Your memo will include advantages as well as disadvantages of activity-based costing as you anticipate resistance from two partners. You will also discuss how to overcome resistance to change. The partners agree the ABC costing model provides better information and will consider mplementing it. However, they feel you should now focus your attention to whether or not to continue in-house library and research services or outsource these services to an external firm. You have requested quotes from vendors who supply this service. One vendor is willing to provide the service at a flat fee of $9,500 per month. Another vendor will provide the service based on an hourly fee of $30.