Online videos that document how various everyday products (and services) are made. Find a product that interests you and your group members and answer the following seven questions:

Go to www.Youtube.com and search for ' How Its Made

 

1) Discuss the cost drivers (at least 4) for assigning the cost of activities to cost objects of the chosen product. Select and critically discuss high and low-cost activities.

2) Identify two variable costs of making the product. Explain -what makes it a variable cost and why? Give one example of how a manager (in this scenario) can increase variable costs while decreasing fixed costs.

3) Identify two fixed costs of making the product. Explain - what makes it a fixed cost and why? Give one example of how a manager (in this scenario) can decrease variable costs while increasing fixed costs.

4) Using the activity-based costing approach, determine overhead rates for each activity that is relevant to production. Identify all inputs required. Using excel spreadsheet, estimate and show all calculations required.

5) Calculate the operating expense of the selected product for 1000 units. Using excel spreadsheet, estimate and show all calculations required.

6) Using excel spreadsheet, compute how a company that makes this product would compute gross margin (for 1000 units) and contribution margin (for 1000 units). Provide one example each and critically discuss the results from your spreadsheet.

7) Discuss how the company can greatly improve its overall profitability by creating value for waste and developing full environmental costs. Provide 2 recommendations to the company on the following issues: a) the importance of cost control for business sustainability b) management accounting innovations?