MANAGEMENT ACCOUNTING AND CONTROL

1. CASE ANALYSIS
2. The production of the shoes depends on the number of order per bulk of customer of OTTO Manufacturing. Everyday, there is a set of desired output that each production line needs to meet. As per the interview from the operation's vice president manager, Mr. John Cruz, the average demand of customer increases up to 6,000 pair of shoes per month with a daily desired output or quota of 300 pairs of shoes. As of now, the company is able to produce the 239 pairs. This problem also results to opportunity loss of P14,640 per day or P 3,513,600 annually.

Existing Operation

Process

-.H I'll-hem. w Question: What do you think would be the best costing system that the manager could apply in this case? Explain your answer. What are the advantages and disadvantages of the costing system that you chose? B. PROBLEM-SOLVING[SYS} Donald Trump Company uses an activitybased costing system to compute the cost of making floral bouquets and delivering the bouquets to its commercial customers. Company personnel who earn $180,000 typically perform both tasks: other firm-wide overhead is expected to total $70,000. These costs are allocated as follows: Bouquet Production Deliver_v_ Other Wages and salaries 50% 30% 10% Other overhead 50% 35% 1 5% Riverside anticipates making 20,000 bouquets and 4,000 deliveries in the upcoming year. 1. The cost of wages and salaries and other overhead that would be charged to each bouquet made is: 2. The cost of wages and salaries and other overhead that would be charged to each delivery is: Obama Products manufactures three types of remotecontrol devices: Economy, Standard, and Deluxe. The company. which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below. My % Cost Driver Material handling $ 225,000 Number of parts Material insertion 2,475,000 Number of parts Automated machinery 840,000 Machine hours Finishing 170,000 Direct labor hours Packaging 170,000 Orders shipped Total $3 888,000 The following information pertains to the three product lines for next year: Q Standard Deluxe Economy 0