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.
Course objectives covered: 1,2,3,4
This project is split into four (4) parts with one (1) part due each week of the course. Based on your readings, use of technology, research of literature, and other sources do the following:
Part 1: Write a 2-3 page report, using at least 1 reference from the Keiser University Library, comparing the traditional and activity-based cost management systems. Give advantages and disadvantages of each and discuss how these concepts will relate to Pop Up Company.
Part 2: Compute the unit cost of both the basic and deluxe toaster using both the unit-based approach, and the activity-based costing approach. Use the data and template provided in this file: Part 2 Writing Project.xls Click for more options . Also, prepare sample budgeted income statements and balance sheets based on the costing data you calculated. You can make your own assumptions related to the number needed to complete these statements.
Part 3: Prepare a 2-3 page 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 4: Prepare a PowerPoint presentation, with recommendations you would make to the CFO based on the information you gathered using activity-based costing, and what you have learned in this course. Also include how this decision would impact the buget for next year.
All written documents and sources used are to be submitted in APA format (use the writing center if needed)
APA Formatting & Style Guide.pdf APA Formatting & Style Guide.pdf – Alternative Formats
You will be presenting and discussing your findings to the class using the voice-over feature in PowerPoint or YouTube. Please be sure the audio is clear and the file or link is accessible in the Week 4 Presentation discussion board.
You will be using Excel to create spreadsheets.
ASSIGNMENT DUE DATE SCHEDULE:
- Week 1: Submit a 2-3 page report for part 1 above comparing traditional and activity-based cost management systems.
- Week 2: Submit your computations of the unit cost of both the basic and deluxe toaster under both the unit-based approach, and the activity-based costing approach using the Excel template provided above for part 2.
- Week 3: Submit a 2-3 page memo to the CFO summarizing your findings, and why you believe the activity-based costing method provides you more useful information.
- Week 4: Present and discuss what recommendations you would make to the CFO, given the information you gathered in part 2, and what you have learned in this course.