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BUS 503 Case Study 2 Spring 2014 Accounting Information for Decision-Making




Question;BUS;503 Accounting Information for Decision-Making;Case;Study # 2;Headquarters?;Overhead Cost Allocation at Korea Auto Insurance Co., Inc.;Spring;2014;Case Study Instructions;Purpose ?The purpose of this case;study is to further your understanding of accounting and how to use;accounting information to make business decisions, develop your critical;thinking skills, and improve your business communication skills.;Group Work -You are to work in;your assigned case study teams and develop group answers. Each person is;responsible for the entire assignment.;Format and Length of paper ?Prepare;group answers to the questions below in a memo format. Make sure you;clearly describe your assumptions (if any), organize your work in a;logical manner, show all calculations with all numbers clearly labeled and;all concepts thoroughly explained.;If you include any Excel spreadsheets or exhibits, then make sure;you properly label them and discuss and reference them in your answers. The use of appendices is allowed and does;not count as part of the paper length count.;Due Dates/Times ?Refer to weekly;schedule for due date. No late work;will be accepted. The group paper;is to be submitted in Blackboard (Drop Box section). Only one group member is to post the;final version on behalf of the group.;Before submission, make sure you are submitting the final version.;? Case Study Discussions ? On the day we meet, you will be participating in an in-class discussion/presentation about the case study with your group. Each team member is required to participate and present. PowerPoint is to be used to explain the main points and findings/recommendations.In the bottom right hand corner of each slide display the name of the presenter.;Grading ? The grade is a group;grade and will be assigned as such in Blackboard.;?;Writing format ?For the group paper, you must use Times New;Roman with font size 12 and single line spacing. Your work presentation must be clear and;legible as would be expected in most professional business settings. Use business syntax, slang is not;appropriate.;?;Evaluation;of papers - Your paper will;be evaluated based on content, development, presentation, proper use of;language, and formatting.;?;Academic Honest ? plagiarism will result in a zero grade on;the assignment assigned to the group.;Case Study;Questions;1. Using the case data, prepare a Comparative;Income Statement to show the net income of theTaejon branch as of 2007 and 2008 if the;headquarters? overhead costs were allocated by using the current method. Calculate the amount of revenue, direct and;indirect costs, the change amount (in dollars) and the change rate (in percent);of theTaejon;branch for these two years.;2. Analyze the Comparative Income Statement (# 1;above) and explain why theTaejon;branch?s net income increased or decreased between these two years. What is the most significant factor that;caused this result?;3.;The;current overhead cost driver, branch revenue, is criticized because it lacks;any logical relationship to the overhead costs allocated by headquarters. Choose more appropriate cost drivers for the;17 overhead costs listed in case Exhibit 3.;You may refer to descriptions of the 17 overhead costs incurred by the;five teams at the headquarters.;4.;Using;your cost drivers (from # 3 above), prepare a Comparative Income Statement of;theTaejon;branch as of 2007 and 2008. Compare your;answer to the result from # 1 above).;Which method provides the best advantage to evaluate Kim?s performance? Why?


Paper#49888 | Written in 18-Jul-2015

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