Question

In: Accounting

Mr. Beridon received your requests for information and returned data which you have compiled in an...

Mr. Beridon received your requests for information and returned data which you have compiled in an Microsoft® Excel® spreadsheet (see document template). He also said, "We grow sod and trees at Jeemp Farms. We sell the sod mainly to home builders in the area, although we sell to some individuals who are purchasing square footages to re-sod their yard. Many home builders will purchase to sod an entire subdivision. They then may come back to us to purchase trees for the yards. It really is a package deal. For builders like that, we are a one-stop-shop. In most cases, however, we sell the trees to orchards and some individuals. The purchaser is responsible for all shipping costs related to their product." "Our production process is different for each product. For sod, we plant the seed, irrigate, cut, and roll the sod and then transport it. For the trees, we plant the root stock, graft the tree, water until a particular maturity and then dig it up and sell it. We inspect the plants as needed to make sure we are producing a quality product that is disease-free." "We have delayed purchasing some machinery that reduces time for the planting of the trees because it is a large up-front cost and we don't want to have a huge outlay of cash if our profits keep going down." "The grass does not require as much irrigation as the trees, as it is at a lower elevation than the tree acres and is closer to the creek; it gets a lot of the run off." "Historically, we have always been able to sell everything we produce. Hopefully, that will continue since Houston is expanding rapidly."

- Describe other methods of analysis you could use to help you come to a decision? with references.

Solutions

Expert Solution

As per the provided data:

In this given example the traditional method of costing (Activity based costing) method is deployed. the limitatuin of both the costing methodologies are providedas follows.

limitation of absorption costing(traditional costing)

  • under this costing method both the cost(fixed&variable) is used to determine the total cost.
  • this method compketely ignore that sales volume & profitability factor
  • therefore, if these costing methodology is adopted and if the sale volume is dropped then the cost will be much higher and it will not be possible to sale the products at profits.

Activity Based Costing(ABC XOSTING)

  • The traditional method of costing (absorption costing) is now a days being replaced with ABC costing methodology.
  • The process involves identifying activity of each product, the cost is derived.
  • Also there is a possibilioty that all the hourly rate is also dependent upon the estimated production volume.
  • In the both above mentioned costing methods, the chamge in sale volume may impact the cost derived through these process.
  • The alternative costing method(marginal costing)is the process which will provide the management a better idea about change the cost for each change production volume.
  • This will help the management to price the products suitably.
  • since this process does not consider pr all cost(fixed cost) , the costing will be favourable under this cost method.
  • However, the net profit will remain same.

Related Solutions

Mr. Beridon received your requests for information and returned data which you have compiled in an...
Mr. Beridon received your requests for information and returned data which you have compiled in an Microsoft® Excel® spreadsheet (see document template). He also said, "We grow sod and trees at Jeemp Farms. We sell the sod mainly to home builders in the area, although we sell to some individuals who are purchasing square footages to re-sod their yard. Many home builders will purchase to sod an entire subdivision. They then may come back to us to purchase trees for...
You as manager have just returned from vacation and your assistant relates this to you: As...
You as manager have just returned from vacation and your assistant relates this to you: As you know our senior salesperson, Carla (C), retired last month. Carla’s hobby is fly-fishing. Tamar, our administrative assistant in HR, was in charge of the retirement gifts. Tamar selected a fishing rod, tackle and fishnet along with a week’s stay at a fishing lodge in LaFluer, Canada. As part of the package, Tamar went to a Julia's Gourmet Food Store (J) and asked the...
Refer to Charles Johnson (Meet Your Patient). What data do you have about Mr. Johnson’s spirituality?...
Refer to Charles Johnson (Meet Your Patient). What data do you have about Mr. Johnson’s spirituality? What speculations might you make about his spirituality based on your past experiences and knowledge, and the limited data you have? How does your religion or spirituality differ from Mr. Johnson’s? How is it similar?
The living standards data compiled by the late Angus Maddison reveal a pattern in which the...
The living standards data compiled by the late Angus Maddison reveal a pattern in which the material living standards of Western Europe were essentially “flat” from the year 1 CE to 1500 CE, and only start increasing dramatically post-1600 CE. The thesis has been advanced that this rise in Western European material living standards correlates wit the birth and development of Economic Thought/Theory, whereby men explicitly attempted to rationalize the laws governing economic phenomena. Prior to 1700 CE, most of...
The living standards data compiled by the late Angus Maddison reveal a pattern in which the...
The living standards data compiled by the late Angus Maddison reveal a pattern in which the material living standards of Western Europe were essentially “flat” from the year 1 CE to 1500 CE, and only start increasing dramatically post-1600 CE. The thesis has been advanced that this rise in Western European material living standards correlates wit the birth and development of Economic Thought/Theory, whereby men explicitly attempted to rationalize the laws governing economic phenomena. Prior to 1700 CE, most of...
You have the following initial information on CMR Co. on which to base your calculations and...
You have the following initial information on CMR Co. on which to base your calculations and discussion for Two parts A) and B): • Current long-term and target debt-equity ratio (D:E) = 1:4 • Corporate tax rate (TC) = 30% • Expected Inflation = 1.75% • Equity beta = 1.6385 • Debt beta = 0.2055 • Expected market premium (rM – rF) = 6.00% • Risk-free rate (rF) = 2.15% A) The CEO of CMR Co., for which you are...
You have a patient allocated to you who have returned from ICU with a tracheostomy insitu...
You have a patient allocated to you who have returned from ICU with a tracheostomy insitu as well as an underwater seal drain after being ventilated for three weeks postoperatively. You must clean the tracheostomy and care for the UWCD. Write down the equipment required as well as the steps you will follow to perform the procedure to clean the tracheostomy and care for the UWCD.
You are a Supplier: A retailer requests to purchase supplies on credit from your company. You...
You are a Supplier: A retailer requests to purchase supplies on credit from your company. You have no prior experience with this retailer. The retailer’s current ratio is 2.1, its acid-test ratio is 0.5, and inventory makes up most of its current assets. Do you extend credit? You are the Financial Officer: Your company has a 36% gross margin ratio and a 17% net profit margin ratio. Industry averages are 44% for gross margin and 16% for net profit margin....
you will include information about the health services your patient received. In this section, include the...
you will include information about the health services your patient received. In this section, include the types of doctors your patient has seen and why. Discuss how he or she was diagnosed with the illness, how he or she stays informed about his or her illness, and what treatments he or she is receiving. Discuss the adherence (or nonadherence) to the treatment. If your patient is not yet at this point, discuss what steps you will use to help him...
22. When you attempt to update a Web page and data is received by your system,...
22. When you attempt to update a Web page and data is received by your system, how can this be determined by an email the is received by a software such as Outlook? A. The system used the trailer of the packet with the number assignment. B. A combination of the IP address and the computer name is used. C. The service of DNS is used to apportion the correct information. D. Port numbers are used 23. Which of the...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT