Analysis and Decision-Making Case b. Wanda naturally inquired further about the large and currently nonallosated selling, Wanda recently transitioned her career from the manufacturing sector to the service sector, general, and administrative cost. The accounting department provided her with the where she took a job with a management training organization. She needed a change of pace following breakdown by key activity and a fresh setting. Because she had 12 years of supervisory experience in manufacturing, the leadership team at the management training organization was thrilled to have her. The organization provided targeted training sessions in the following areas: supervisory, management, finance and accounting, and leadership. In the team's fourth quarter planning meeting, the CEO spoke to Wanda. "Wanda, your years of studying process efficiency and effectiveness are beneficial to us, as is your work in improving information for decision-making. Further, we recognize your experience in implementing an activity-based costing system. Therefore, we are assigning you to be the team leader for our our key events for improved decision-making, and (2) use this new information to drive After seeing these four key categories, Wanda put her skills to use. She interviewed many individuals to learn more details and noted the following. improvements in efficiency and effectiveness throughout our processes. Are you up for the Wanda didn't hesitate. She wanted the opportunity to bring her expertise to this new setting - Recruiting is done primarily by one individual to generate business for all current and participate in a team effort that could benefit many stakeholders: employees, customers, suppliers, and even the community. "I'm in," she confirmed. Once the meeting concluded, Wanda started making notes. There was much data to gather to - Selling, general, and administrative costs are for in-house operating expenses Once the meeting concluded, Wanda started making notes. There was much data to gather to - Event support off-site is conducted by one individual to gather and analyze the new ABC system. At Wanda's request, the accounting supervisor provided her with the training feedback; this individual also coordinates logistics ahead of time. following information about this year's profitability by category, where only direct costs were - Research and development costs are incurred to ensure that the most on-topic trends are addressed in training sessions, that current pedagogy is being utilized, assigned to each key training category throughout the year. - Leadership events are delivered in a different format than the other events; these participants commit to five different training sessions, for three days each, at select times throughout the year. Each three-day session is built on the previous sessions. Given this additional insight, specify a reasonable cost driver (allocation base) for each of the four key activity areas in order to allocate these costs to the training categories. c. Which of the four key activity areas identified in part (b) would Wanda consider breaking into even more detail? What would this new list of activities be? What cost driver(s) could Wanda use to assign those activity costs? d. Suppose Wanda lands on four specific cost drivers-one for each indirect activity, corresponding with the order in which they were originally presented in part (b). Details Required for each category's cost driver usage is as follows. a. Calculate the gross margin amounts and percentages for each key training area. What does this information suggest about the most profitable category? About the least profitable category? Given this new information, calculate activity rates and allocate these indirect costs to each category. What new information do these allocations give the leadership team? Perform additional analysis to determine profitability by category. What new information does this profitability analysis give the leadership team? From Wanda's perspective, write a memo to the leadership team explaining the initial benefit of her work. Explain what her next steps will be for improving information for decision-making as well as increasing efficiency and effectiveness throughout the organization. Be sure to explain if and how the cost of this initiative will benefit the organization. a. b. \begin{tabular}{|c|l|} \hline Key Activity-Recruiting & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline \end{tabular} c. \begin{tabular}{|l|l|} \hline Key Activity- SG\&A & \\ \hline & \\ \hline & \\ \hline & \\ \hline \end{tabular} New list of activies based on the above suggestions: d. Indirect Costs Allocated to the Supervisors \begin{tabular}{|l|c|c|c|} \hline \multicolumn{1}{|c|}{ Category } \\ \hline \multicolumn{1}{|c|}{ Key Activity } & Activity-based Rate & * Quantity of Cost Driver & = Indirect Costs Applied for Activity \\ \hline Recruiting & & & \\ \hline SG\&A & & & \\ \hline Event support off-site & & & \\ \hline Research and development & & & \\ \hline Total indirect costs applied & & & \\ \hline \end{tabular} Solution Ready \( \quad \quad_{x}^{\infty} \) Accessibility: Investigate Informattion provided given the above calculation: x Accessibility: Investigate Analysis and Decision-Making Case b. Wanda naturally inquired further about the large and currently nonallosated selling, Wanda recently transitioned her career from the manufacturing sector to the service sector, general, and administrative cost. The accounting department provided her with the where she took a job with a management training organization. She needed a change of pace following breakdown by key activity and a fresh setting. Because she had 12 years of supervisory experience in manufacturing, the leadership team at the management training organization was thrilled to have her. The organization provided targeted training sessions in the following areas: supervisory, management, finance and accounting, and leadership. In the team's fourth quarter planning meeting, the CEO spoke to Wanda. "Wanda, your years of studying process efficiency and effectiveness are beneficial to us, as is your work in improving information for decision-making. Further, we recognize your experience in implementing an activity-based costing system. Therefore, we are assigning you to be the team leader for our our key events for improved decision-making, and (2) use this new information to drive After seeing these four key categories, Wanda put her skills to use. She interviewed many individuals to learn more details and noted the following. improvements in efficiency and effectiveness throughout our processes. Are you up for the Wanda didn't hesitate. She wanted the opportunity to bring her expertise to this new setting - Recruiting is done primarily by one individual to generate business for all current and participate in a team effort that could benefit many stakeholders: employees, customers, suppliers, and even the community. "I'm in," she confirmed. Once the meeting concluded, Wanda started making notes. There was much data to gather to - Selling, general, and administrative costs are for in-house operating expenses Once the meeting concluded, Wanda started making notes. There was much data to gather to - Event support off-site is conducted by one individual to gather and analyze the new ABC system. At Wanda's request, the accounting supervisor provided her with the training feedback; this individual also coordinates logistics ahead of time. following information about this year's profitability by category, where only direct costs were - Research and development costs are incurred to ensure that the most on-topic trends are addressed in training sessions, that current pedagogy is being utilized, assigned to each key training category throughout the year. - Leadership events are delivered in a different format than the other events; these participants commit to five different training sessions, for three days each, at select times throughout the year. Each three-day session is built on the previous sessions. Given this additional insight, specify a reasonable cost driver (allocation base) for each of the four key activity areas in order to allocate these costs to the training categories. c. Which of the four key activity areas identified in part (b) would Wanda consider breaking into even more detail? What would this new list of activities be? What cost driver(s) could Wanda use to assign those activity costs? d. Suppose Wanda lands on four specific cost drivers-one for each indirect activity, corresponding with the order in which they were originally presented in part (b). Details Required for each category's cost driver usage is as follows. a. Calculate the gross margin amounts and percentages for each key training area. What does this information suggest about the most profitable category? About the least profitable category? Given this new information, calculate activity rates and allocate these indirect costs to each category. What new information do these allocations give the leadership team? Perform additional analysis to determine profitability by category. What new information does this profitability analysis give the leadership team? From Wanda's perspective, write a memo to the leadership team explaining the initial benefit of her work. Explain what her next steps will be for improving information for decision-making as well as increasing efficiency and effectiveness throughout the organization. Be sure to explain if and how the cost of this initiative will benefit the organization. a. b. \begin{tabular}{|c|l|} \hline Key Activity-Recruiting & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline \end{tabular} c. \begin{tabular}{|l|l|} \hline Key Activity- SG\&A & \\ \hline & \\ \hline & \\ \hline & \\ \hline \end{tabular} New list of activies based on the above suggestions: d. Indirect Costs Allocated to the Supervisors \begin{tabular}{|l|c|c|c|} \hline \multicolumn{1}{|c|}{ Category } \\ \hline \multicolumn{1}{|c|}{ Key Activity } & Activity-based Rate & * Quantity of Cost Driver & = Indirect Costs Applied for Activity \\ \hline Recruiting & & & \\ \hline SG\&A & & & \\ \hline Event support off-site & & & \\ \hline Research and development & & & \\ \hline Total indirect costs applied & & & \\ \hline \end{tabular} Solution Ready \( \quad \quad_{x}^{\infty} \) Accessibility: Investigate Informattion provided given the above calculation: x Accessibility: Investigate