OBJECTIVE

The objective of this assignment is to introduce you to how to approach the analysis of a

business case $($problem$)$ and make recommendations using the management accounting

concepts we study in this course.

CASE

The case you will be analyzing is "Sapphire Textile Mills Ltd$.,$ Refined Costing," which can be

found in Brightspace under the "Tools $-$ Ares Reserves" tabs$.$

SPECIFIC PROBLEM or DECISION

The case looks at a situation where a local textile manufacturing company finds its existing

costing system inadequate and tries to move towards an activity$-$based costing approach. Even

though the newer system is a refinement, it still has its flaws, and the CFO has to decide

whether a more accurate system is needed for costing various customer orders.

You will need to calculate the cost of the customer orders given in Exhibit $6$ of the case using

the existing costing system and also using the proposed costing system in order to formulate an

appropriate recommendation for the company.