Corporate Accounting Management Analysis

Running Head: ACCOUNTING 0
Accounting
(Student Name)

ACCOUNTING 1
Table of Contents
Question 1........................................................................................................................................2
Question 2........................................................................................................................................2
Question 3........................................................................................................................................3
Question 4........................................................................................................................................4
Question 5........................................................................................................................................4
Question 6........................................................................................................................................5
Question 7........................................................................................................................................5
Question 8........................................................................................................................................5
References........................................................................................................................................7

ACCOUNTING 2
Question 1
Dakota Office Company uses inaccurate calculation of costs for new services.
Management has confronted its goods with significant pricing and costing problems. The
business used the method of standard costing to calculate the product cost made available to the
customers. Highlight as per strategy to arrive at the product's sale rate. As a result of failing to
follow the Activity Based Costing, the corporation was not able to realistically compute prices
for the goods. This has contributed to product mispricing and the company has produced overall
losses (Kaplan, 2005).
The Dakota Office now has to use an operating costing method to address these issues an
d insure that its goods are priced correctly.
Question 2
Key
Activity Detailed Activity
Assig
ned
Cost
Activit
y
Quantit
y Formula
Rate of
Cost
Driver
Acti
vity
1
Process
Carton in
and out
Personnel
Warehouse (90%)
21600
00 80000
90% of
Warehouse
Personnel
Expense +
Cost Items
Purchased
/cartons
processed 464.5
per
car
ton
Purchased Cost 35000 (216000+3500

ACCOUNTING 3
items 000 0000/ 80000)
Acti
vity
2
Desktop
Delivery
Service
Warehouse
Personnel (10%)
24000
0 2000
10% of
Warehouse
Personnel
Expense +
Delivery
Truck
Expenses /
desktop
deliveries 220
per
car
ton
Delivery
Truck Delivery Truck
20000
0
(10% of
2400000 +
200000 /2000)
Acti
vity
3
Order
Handling Freight
45000
0 24000
(Warehouse
Expenses +
Freight) /
number of
orders 102.08
per
car
ton
Warehouse
Personnel
(excluding
personnel)
20000
00
(450000+2000
000/24000)

ACCOUNTING 4
Acti
vity
4 Data Entry
Expense of Order
entry
80000
0 150000
Order entry
expenses/Orde
r lines 5.33
per
lin
e
(800000/1500
00)
Question 3
Customer A
Custom
er B
Activity Rate of Cost Driver Quantity
Cost = Cost
Rate *
Quantity
Cost =
Cost Rate *
Quantity
Process
cartons in
and out of
the facility
$
464.50 200
$
92,900.00 200
$
92,900.00
New
desktop
delivery
price
$
220.00 0
$
- 25
$
5,500.00
Order $ 6 $ 100 $

ACCOUNTING 5
Handling 102.08 612.48 10,208.00
Data Entry
$
5.33 60
$
319.80 180
$
959.40
Total Cost
of
Purchased
Items
$
93,832.28
$
109,567.40
Contributi
on to
general
and selling
expenses =
number of
cartons
ordered *
(general
and selling
expenses +
Interest
expenses)
/ cartons
processed
(2000000+120000)*2
00/80000
$
5,300.00
For both
customers A
and B

ACCOUNTING 6
Calculation of Customer Profitability expenses
Customer A Customer B
Sales 103000 104000
Less:
Total Cost of Purchased Items $ (93,832.28) $ (109,567.40)
Contribution to general and selling
expenses $ (5,300.00) $ (5,300.00)
Remaining Profit 3867.72 -10867.4
Question 4
Numbers of placing orders by different number of customers are explained in the below points:
 Customer B chooses 150 package numbers shipped with industrial goods, a far more
costly distribution of 50 boxes than Customer A.
 Client A has 60 paper files, Customer B has a Guide, and Customer B has 180 line posts.
Thus, B expended more money on edict entry than Client A.
 Client A had 6, 200 cartons and 6 EDI orders for manual transactions.
 Client B had 100 labor-intensive orders for 200 packets.
 The processing of orders is approximately $102.08 per order. So Client A has spent
$1224.96 as well as Client B has spent $10,208.
 Leaving Customer B paid $8983.04 more.

ACCOUNTING 7
This result can tell us about actions of a consumer. With respect to the report, Customer A
has been advised to use the newest EDI ordering system effectively, which is less expensive for
DOP, to position larger orders and not to use the "Desktop" service. In other terms, Customer B
does not put an EDI order, places a smaller order and demands a greater number on its "Screen."
Question 5
The limitations on the standards of efficiency of the two consumers indicate that expense
sources can be estimated and that the actual drivers will be properly assessed. The figures used
for the prior year's estimate of expense factors are true but not always the same for the coming
years. Many adjustments will need to be undertaken in coming years to determine the
appropriate contract allocations. Costing system based on operations may be expensive for
companies, but the rewards of an effective system are significantly higher than its costs. In order
to grant reasonable prices to its facilities, the DOP must insure that all expenses are taken into
account.
Question 6
In order to enhance profitability, the organization will have to change its prices in order
to evaluate the cost-effectiveness report generated with the Activity-Based Costing framework. It
will require a price increase for some DOP operations to allow consumers to use less expensive
services. While rising prices may increase profitability in some facilities, DOP requests to
upsurge the value of the substances bought. DOP will connect with its customers in an open
manner. The move should be implemented early in order to take account of the preparation
required for this transition. This modification should be announced. DOP must realize that price
changes will influence demand as well. The decision then has to be taken after a profit-
maximizing demand study; on how many the costs are that and/or how much money is desired.
Question 7
When using the study in question 3 for the whole client base, Dakota will understand that
the traditional system of delivery costs has certain limitations as well as the value of laptop
provisions should be changed in compliance with the storeroom size. Dakota should provide a
benefit for those who purchase larger orders because it will also give customers an opportunity to
place large orders and thus decrease small orders dramatically.

ACCOUNTING 8
Question 8
When there is a scenario where the full number of consumers would be sorry to put all
orders manually via the internet, otherwise company 1 would be affected: cartons inside and out
of the facility would shift and the rates would be changed by driver suit.
Price = EDI orders / EDI operating hours Rate= 8,000 / 500 = 16 orders per hour
Total orders / hour orders = 24,000 / 16 = 1500 working hours and 8,500 working hours
fewer than 10000 spent hours. Therefore, it invested 85% less on salaries.
Activity 4: data entry would be impacted because the expense of EDI would be decreased
while using and the same cost per line will be reduced.
The cost drivers have reduced, as defined by Question 2 of the 4 operation, so that the
consumer increases income. A better way should also be to receive payments from consumers, so
that the loan interest rate is not equivalent and reduces annual profit.
The Cost-effectiveness would be much developed since the distribution of two out of four
vile operation outlays would decline to increase income per company, and the benefit would also
be decreased by the number of customers making smaller orders (Jiambalvo, 2015).

ACCOUNTING 9
References
Jiambalvo, J. (2015). Managerial Accounting, Binder Ready Version (Sixth Edition Ed.). United
States: John Wiley & Sons.
Kaplan, R. S. (2005). Dakota Office Products Harvard Business School, Boston, MA.