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However, instead of production and purchasing supervisors’ reward being based on the individual variances over which they have control, they are currently rewarded based on total cost variances, and on bottom line profit of the three products in the Clothing Department.

Review of costing system

For a number of reasons the firm is commencing an extensive review of its costing system and reporting practices.  This review will involve all divisions of the firm, though our focus will be on one division only (the Clothing Department), and emphasise one product (“Surf” board shorts).  Some of the issues which have prompted the review are:

• Various pressures from competitors seeking the advantages of life on Queensland’s fabulous Gold Coast have alerted the firm to be more cost conscious.   The firm has had a number of issues with their product pricing recently.  The firm sets prices based on a mark-up on total cost (i.e. inventoriable (product) cost + period cost for each product).  Various inconsistencies  have been identified when comparing Boardies prices with those of its major competitors.  As a result  the firm wants to have more confidence in the product cost generated by the accounting system, in particular the cost of each individual product (Surf, Sun, Sand in this product range).

• In addition to product pricing, the costing data provided by the firm is now being used extensively for other decision-making within the firm.  This means that the accuracy of costing data is becoming increasingly important.

• Top management is reviewing the way it rewards supervisory staff.

• In recent times the firm has been faced with limited storage space at their premises.  The firm is unable, at this stage, to consider options involving a significant capital outlay to relocate or rebuild.  Further, Just in Time inventory is not an option for this firm.  (Note:  the recent change in factory layout has no impact in any way on storage capacity.)

• Management is considering various costing system options.  To facilitate their decision-making they have requested the preparation of a number of schedules.  However, apart from providing the completed schedules (the technical reports below), management is not seeking your advice/assistance in relation to choices between costing alternatives, e.g. normal/standard costing; absorption/variable costing; how to allocate variances.  Therefore, in none of the questions for the report below are you required to make choices between costing options except for question (2) which specifically relates to ABC.

Review – Boardies @ Mermaid

The following information is required.  For the written report to management you are required to present that information, using management’s instructions,  in a form that is easy for management to read and understand.

Information required consists of two parts:

• Technical reports, some for the existing costing system reporting on the most recent period, and others prepared employing different costing techniques to facilitate management’s decision-making.

• A report addressing specific questions of the firm’s management.

Technical reports required (schedules 1-8).  Please follow precisely all instructions i本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。