Case 5-36 from Management Accounting 6th edition (Atkinson, Kaplan, Matsumura, Young) A. Calculate the practical capacity and the capacity cost rates for each of Towerton?s personnel resources: brokers, account managers, financial planners, principals, and customer service representatives. B. Calculate the practical capacity and the capacity cost rates for each of Sippican?s resources: production and setup employees, machines, receiving and production control employees, shipping and packaging employees, and engineers. C. Using these capacity cost rates and the production data in Exhibits 5-10 and 5-11, calculate revised costs and profits for Sippican?s three product lines. What difference does your cost assignment have on reported product costs and profitability? What causes any shifts in cost and profitability? D. Could this approach be extended to service companies and to companies much larger and more complex than Sippican? What would be the barriers and difficulties with implementing time-driven ABC in practice? E. On the basis of the revised cost and profitability estimates, what actions should Sippican?s management team take to improve the company?s profitability? Case 5-37 A. Estimate the resource demands from Knight?s forecasted sales production plan in Exhibit 5-12. B. Prepare a pro forma product line income statement based on the new plan. C. Comment on the magnitude of the change in profit with the new plan in relation to the change in production and sales under the previous plan.

Case 5-36 from Management Accounting 6th edition (Atkinson, Kaplan, Matsumura, Young) A. Calculate the practical capacity and the capacity cost rates for each of Towerton's personnel resources: brokers, account managers, financial planners, principals, and customer service representatives. B. Calculate the practical capacity and the capacity cost rates for each of Sippican's resources: production and setup employees, machines, receiving and production control employees, shipping and packaging employees, and engineers. C. Using these capacity cost rates and the production data in Exhibits 5-10 and 5-11, calculate revised costs and profits for Sippican's three product lines. What difference does your cost assignment have on reported product costs and profitability? What causes any shifts in cost and profitability? D. Could this approach be extended to service companies and to companies much larger and more complex than Sippican? What would be the barriers and difficulties with implementing time-driven ABC in practice? E. On the basis of the revised cost and profitability estimates, what actions should Sippican's management team take to improve the company's profitability? Case 5-37 A. Estimate the resource demands from Knight's forecasted sales production plan in Exhibit 512. B. Prepare a pro forma product line income statement based on the new plan. C. Comment on the magnitude of the change in profit with the new plan in relation to the change in production and sales under the previous plan