Decision making in companies is often facilitated by utilizing
cost allocation methods. Anthony's Orchards is measuring its
performance and reviewing its service department cost allocation
methods to determine whether current methods reflect the true value
and profitability of the businesses. Write a 1- to 2-page memo to
the accounting manager on why you would recommend using a
particular cost allocation method. To prepare for your memo use
data from the Anthony's Orchards website and calculate the three
different service department methods (direct, step-down, and
reciprocal) and compare and contrast the methods. Choose one method
and state why you recommend this method for Anthony's Orchards.
Your memo should reflect the application of the material presented
this week as well as anything from previous weeks and Required
and/or Optional Resources. A description of your recommendation, a
rationale for why it is important, and a description of the
consequences of not following the recommendation should be included
in the memo. Be sure to support your work with specific citations
from this week's Learning Resources and any additional
resources.
Tuesday, August 1, 2017
Decision making in companies is often facilitated by utilizing cost allocation methods. Anthony's Orchards is measuring its performance and reviewing its service department cost allocation methods to determine whether current methods reflect the true value and profitability of the businesses. Write a 1- to 2-page memo to the accounting manager on why you would recommend using a particular cost allocation method. To prepare for your memo use data from the Anthony's Orchards website and calculate the three different service department methods (direct, step-down, and reciprocal) and compare and contrast the methods. Choose one method and state why you recommend this method for Anthony's Orchards. Your memo should reflect the application of the material presented this week as well as anything from previous weeks and Required and/or Optional Resources. A description of your recommendation, a rationale for why it is important, and a description of the consequences of not following the recommendation should be included in the memo. Be sure to support your work with specific citations from this week's Learning Resources and any additional resources.
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