Part one.

Assignment Part A

Fort the next steps of the project, Melissa has decided to add your group to the team to bring in your expertise with cost accounting system. Melissa asks you to provide your recommendations in the form of a management consulting report. She specifically has requested the following information to be included in the report:

1. As shown in Table 1, Panel C, AXE Life is allocating all expenses of all departments to products. Are there any potential problems caused by allocating all expenses to products?

2. Table 2 shows the results of the test month of the first iteration for the system. Melissa has confirmed that all expenses were allocated. Review Table 1, Panel D and Table 2, Panel D and discuss the functional centres in which the expense allocation bases have been improved and those that still may need improvement.

3. Table 4 shows the cost centres for the Life Insurance Projects functional centre and a description of the activities in each cost centre that make up that functional centre. Based on this information, is the proposed basis for allocating expenses for these cost centres accurate? Why? How could it be improved?