Accounting homework help

Accounting homework help. Writing Project
Project Information:
You are a manager at PopUp Company, who manufactures toaster ovens.  Your company produces two types of toaster ovens: basic and deluxe.  PopUp Company currently uses a traditional unit-based costing system; however, you feel strongly the company should switch to an activity-based costing system.  You believe this change would provide you more accurate costing information, which would allow for better strategic decision making.  You need to prepare a number of documents in order to convince the CFO to change the current cost management system used by your company.
Week 1 Writing Assignment Part 3:

  • Prepare a 2 full pages memo addressed to the CFO summarizing your findings, and why you believe the activity-based costing method gives you more useful information to make decisions for the company. Include in the memo at least 4 ratios that you feel highlight your position that activity-based costing is more useful.

Part 2 was to compute the unit cost of both the basic and deluxe toaster using both the unit-based approach, and the activity-based costing approach.
Unit-based approach

Basic Toaster Deluxe Toaster
Prime Costs  $          20,000  $               30,000
Overhead (22*1000) (22*2400) 22,000 52,800
Total Manufacturing Costs  $          42,000  $               82,800
Volume 20,000 5,000
Cost per Unit  $   2.10  $   16.56

Activity based costing approach

Basic Toaster Deluxe Toaster
Prime Costs  $          20,000  $               30,000
Overhead Cost 36,164 38,628
Total Manufacturing Cost  $          56,164  $               68,628
Volume 20,000 5,000
 Cost per Unit  $   2.81  $   13.73

Blocher, E, Stout, D., Juras, P., Smith, S. (2019). Cost Management, A Strategic Emphasis 8th ed New York, NY: McGraw Hill

Accounting homework help


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