Provide an analysis of adss current cost allocations

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Reference no: EM131690518

PROJECT

This first part of the project involves the analysis of the results of current operations at the Aardvark Delivery Service (ADS), including cost behaviour and detailed cost allocations.

Required:

Assume the role of Arthur and prepare a report to Farid, the president of Aardvark Delivery Service (ADS). Your report should provide both qualitative and quantitative analysis for each of the following issues:

1. As an introduction to the report, provide a high-level profitability analysis of the 20X5 operating results of ADS and each of their product lines. Note that the variances in Exhibit 3 are based on the budgeted and actual figures in Exhibits 1 and 2.

2.  Provide an analysis of ADS's current cost allocations and give advice for the future. Your report should include the following:
a. Administration costs:

i. Service department portion of administration costs: Prepare cost allocations of the janitorial and maintenance departments to the production departments using both the direct and step methods. Use the allocation bases provided in Exhibit 6, and begin with the janitorial costs when using the step method. Discuss which method provides the more reasonable estimate of service department costs to production departments and explain why it is the better method.

ii. Office administration costs: Review the summary printout of two Excel regression analyses (Exhibit 7): one that tests the correlation between administration employee hours and office administration costs and one that tests the correlation between documents used and office administration costs. Explain which activity driver is the better representation of cost behaviour. As a result of your analysis from parts i and ii, reallocate total service and administration costs to the three products. Be sure to split the office administration costs into variable and fixed portions based on your regression results. The fixed cost portion should be allocated among the services using the original allocation approach. Discuss your revised results and its effect of each division.

b. Sorting labour and overhead: Reallocate the total sorting labour and sorting overhead costs to each of the departments using the activity-based costing (ABC) analysis in Exhibit 5. Discuss the results and the effect of ABC on each division.

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this individual project was on the formulate of portfolio management theory which basically focus on the idea of how a low profit making business entity can manager its cost structure and how we can covered our low profit making business condition into the profitable one. similar we use various tools and methods to manage the performance of business.

Reference no: EM131690518

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Reviews

inf1690518

1/2/2018 5:22:15 AM

PLEASE LOOK AT THE ATTACHED FILE FOR THE PROJECT DETAILS in addition to the file sent previously. This attachment has the required appendix. Thank you. 25792641_1PREP-M09C-ASN01-W00PRJDG.pdf Let me know. Thank you. could you provide the excel document where you did your calculations? I request you to please send as soon as possible! Thank you very much. Thank you so much for the solution file, it looks really good. I will get back to you with my grades if possible.

len1690518

10/25/2017 4:52:40 AM

Project 1 is due at the end of Week 3. It is out of 50 marks. This first part of the project involves the analysis of the results of current operations at the Aardvark Delivery Service (ADS), including cost behaviour and detailed cost allocations. In addition to the above, a maximum of 2 marks are awarded for format and professionalism. Project 1 is due at the end of Week 3. It is out of 50 marks. This first part of the project involves the analysis of the results of current operations at the Aardvark Delivery Service

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