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Broadening Your Perspective 17-2 Coursework
Broadening Your Perspective 17-2 Coursework
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Write a paper of no more than 750 words in which you respond to the Broadening Your Perspective 17-2 (BYP17-2 Ideal Manufacturing Company of Sycamore, Illinois) activity titled “Managerial Perspective” in Ch. 17 of Accounting. Complete the exercise in Excel or Word and submit it to me for grading as with any other paper. (See also the enclosed file)
Wiley PLUS Assignment Paper
Objectives:
Write a paper of no more than 750 words in which you respond to the Broadening Your Perspective 17-2 (BYP17-2 Ideal Manufacturing Company of Sycamore, Illinois) activity titled “Managerial Perspective” in Ch. 17 of Accounting. Complete the exercise in Excel or Word and submit it to me for grading as with any other paper.
| BYP17-2 | MANAGERIAL ANALYSISIdeal Manufacturing Company of Sycamore, Illinois, has supported a research and development (R&D) department that has for many years been the sole contributor to the company’s new farm machinery products. The R&D activity is an overhead cost center that provides services only to in-house manufacturing departments (four different product lines), all of which produce agricultural/farm/ranch related machinery products.
The department has never sold its services outside, but because of its long history of success, larger manufacturers of agricultural products have approached Ideal to hire its R&D department for special projects. Because the costs of operating the R&D department have been spiraling uncontrollably, Ideal’s management is considering entertaining these outside approaches to absorb the increasing costs. But, (1) management doesn’t have any cost basis for charging R&D services to outsiders, and (2) it needs to gain control of its R&D costs. Management decides to implement an activity-based costing system in order to determine the charges for both outsiders and the in-house users of the department’s services. R&D activities fall into four pools with the following annual costs.
Activity analysis determines that the appropriate cost drivers and their usage for the four activities are:
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