Description of this paper

1. How does the current system capture manufacturi...

Description

Solution


Question

1. How does the current system capture manufacturing costs and assign them to products? (Prove the overhead rate is 105% of material cost). 2. Calculate the volume-based (traditional) cost per reel for grades A-D identified in Exhibit 1. 3. What is the cost for Forest Hill to conduct a grade change? 4. What is the cost for Forest Hill to slit a reel of paperboard? As shown in Exhibit 1, only products A and C are routinely slit. For purposes of your analysis, assume the slitting equipment must be set up and adjusted between each reel slit. 5. Calculate the new volume-based overhead rate after removing grade change and slitting costs. 6. Determine the activity-based costs for grades A-D. 7. Prepare a table that illustrates the percentage change in costs between the volume-based system and the strategic activity-based system. 8. What conclusions can you draw from your analysis? As a consultant to Forest Hill, what actions would you recommend? Just these 8 questions.

 

Paper#3444 | Written in 18-Jul-2015

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