...CASE WRITE UP ON SELIGRAM, INC.: ELECTRONIC TESTING OPERATIONS Computation of the costs of the five components in Exhibit 6 using the (a) Existing System, (b) First Modified System, (c) Second Modified System (a) The existing system: Total Cost = Direct Labor Cost + Burden = Direct Labor Cost + (Burden Rate x Direct Labor Cost) = Direct Labor Cost + (145% x Direct Labor Cost) Accordingly, using Exhibits 3 and 6, the costs will be as follows: Product | Direct Labor Cost ($) | Burden Rate x Direct Labor Cost (approx) ($) | Total Cost(approx) ($) | ICA | 917 | 1330 | 2247 | ICB | 2051 | 2974 | 5025 | Capacitor | 1094 | 1587 | 2681 | Amplifier | 525 | 761 | 1286 | Diode | 519 | 753 | 1272 | (b) The first modified system: Total cost = Direct Labor + Burden = Direct Labor + [Labor Burden + Machine Burden] = Direct Labor + [(Labor Burden Rate x Direct Labor Cost) + (Machine Hour Rate x Machine Hours)] = Direct Labor + [(21% x Direct Labor) + (8.10 x Machine Hours)] Accordingly, using Exhibits 5 and 6, the costs will be as follows: Product | Direct Labor Cost ($) | Labor Burden Rate x Direct Labor Cost (approx) ($) | Machine Hour | (Machine Hours x Machine Hour Rate)($) | Total Cost(approx) ($) | ICA | 917 | 193 | 18.5 | 1482 | 2591 | ICB | 2051 | 431 | 40.0 | 3204 | 5686 | Capacitor | 1094 | 230 | 7.5 | 601 | 1925 | Amplifier | 525 | 111 | 5.0 |...
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...Q.1 – What caused the existing system at ETO to fail? The primary reason for the failure of Electronic Testing Operations’ (ETO) existing cost accounting system is ETO’s reliance on a labour-based overhead allocation system, which relied on an arbitrary cost-driver (i.e. overhead rate based on total pooled overhead costs and direct labour costs) (Turney, 1988, p. 2-3). The cost driver is based entirely on direct labour and assumes that all the components utilise direct labour and overheads in an equal proportion, but does not allocate overheads based on machine usage. Excluding this last point is not convenient due to the high utilisation of mechanical inputs that most of the components require (Turney, 1988, p.9). The labour-based overhead allocation system did not permit fluctuations in direct labour (for example, a decrease in direct labour hours dramatically increased the overhead rate across all customers) and thereby led to inaccuracy in determining costs (Turney, 1988, p.3). Since overheads constitute a huge proportion of the total costs, an inaccurate distribution of these overheads lead to inaccurate cost predictions and, in-turn, lead to unfavourable management decisions since managers have difficulties in identifying components that are unprofitable and products that are overpriced. The inaccuracy in allocation of overheads has increased over time due to the following factors: * Steady decline in the direct labour hours per lot tested as a result of (a) dependence...
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...The main drawback of the existing system is the assumption that all products used direct labor. This system measured direct labor and burden. Seligram’s entire facility was grouped into a single cost pool. (Cooper, 1999) The rate was based on direct labor hours; however, some products required machine hours. Burden costs were calculated by dividing the sum of testing and engineering labor to get the burden rate. (Cooper, 1999) To calculate the burden, each lot was multiplied by the associated direct labor dollars then by 145% of the burden rate. (Cooper, 1999) The total cost was determined by adding direct labor cost to the burden. THE EXISTING SYTEM: SINGLE COST POOL PRODUCT DIRECT LABOR OVERHEAD*145% TOTAL (DL+OVERHEAD) ICA $917 1329.65 2246.65 ICB 2051 2973.95 5024.95 CAPACITOR 1094 1586.3 2680.30 AMPLIFIER 525 761.25 1286.25 DIODE 519 752.55 1271.55 The single cost system began phase out due to an increase on vendor certification and just-in time delivery. This caused direct labor content and test lots to decrease. There was also a shift in inspection. Inspection service became more complex and required technology to screen and text complex items. (Cooper, 1999) The new technical components required automatic testing, longer test cycles and more data per part. (Cooper, 1999) Due to increased technology 30% of Seligram’s shipments were used by JIT deliveries. However, Selligram was more cost efficient for low-tech laboratories. ETO also provided support from...
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...Question 1 What caused the existing cost system at ETO to fail? o Cost system doesn’t match their complex business model • 200+ different standard process flows • 6,500 different software programs • 1,500 tools and fixtures • Multiple machines (number not specified) • Testing for 100’s and soon 1000’s of conditions o Yet they have a simple all-in-one cost system that uses a single metric (direct labor hours) to cost for every product type even though that metric is not unilaterally relevant to every product type Question 2 Calculate the reported costs of the five components listed in Exhibit 6 using: o The existing system. o The system proposed by the accounting manager. o The system proposed by the consultant. o See Exhibit A Question 3 Which system is preferable? Why? o The consultant’s proposal is the most preferable o Separates costs based on what activities are occurring in the testing of each product rather than blanketing those costs across all products regardless of testing processes/components Question 4 Would you recommend any changes to the system you prefer? Why? o Allocating costs by machine rather than just by machine hour • Different machines have different costs to buy, appreciate, run, etc. • This may be more complex than it’s worth and would only make sense if there was a significant difference in cost by machine o Standardize costs according to the type of test o Split into a 4th pool separating engineering overhead...
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...Class 2: Seligram ETO (provide answers to all questions marked with a ‘*’ in your case writeup. See syllabus for instructions on format and page length of report) 1. (*) What type of cost system is Seligram using? It is using the traditional cost system also called the Full Absorption cost . This is the financial cost system historical cost analysis system . 2. What are the symptoms of cost system failure at ETO? As we learned in chapter 7 initially,”… cost systems designs were simple…“(Brewster et.al, p. 236). The goal of the allocation process is to assign overhead in a manner that most appropriately reflects the cause /effect relationship of incurred costs. These cost systems were based on belief that there was a high correlation between direct labor hours and units produced (Brewster et. al, p. 237). ETO’s current cost system only factors in two of their cost components;” direct labor and burden” (Seligram, 1993 p.2 ) Burden is grouped into a single cost pool that includes costs associated with each of the testing rooms, engineering burden costs related to software and tooling development as well as administrative costs for the division. The major assumption that caused ETO’s existing system to fail is that all costs are divided equally among direct labor costs and burden despite the variety of services. As described in the case study, components significantly varied in number and type of electrical and mechanical testing required. For example, some components required...
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...With these developments, it is obvious that conflicts between parties of different nationalities occur and liability to tax on income of foreigners especially among those engaging in trading venture. Whilst the laws affecting domicile and residence may be sufficiently settled, it is paramount for courts to pursue a detailed analysis to ascertain specific preliminary issues so as to avoid controversial rulings. Courts often handle numerous financial cases that involve what can be best described as foreign or international elements. In such cases, court must decide whether it has the jurisdiction under the Family Law Act 1975 to make a decision on such cases. In the event that it is determined that the court is invested with the jurisdiction to determine the case, the court has to consider whether there is a system of law in foreign country that also has the jurisdiction to handle the case. As it was addressed in the case Attorney General of New Zealand v Ortiz [1984] AC 1, these benefits and costs to either party if the case resolution is made in foreign country as compared with the apparent country should also be a subject of concern. [1] Legal systems in most countries around the world adopt community property regime, which takes effect at the inception of marriage or at the time of divorce. For instance, California and Massachusetts in the United States have adopted community property regimes that support equal division of assets upon divorce. However, this provision...
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...Adapted from Bernhardt & Kinnear (1988). Cases in marketing management, pp. 6-16. Plano, TX: Business Publications, Inc. Pay careful attention to the following points. They are often used by instructors to evaluate either a written or oral analysis. 1. Be complete. Each area of the situation analysis must be discussed, problems and opportunities identified, alternative presented and evaluated using the situation analysis and relevant financial analysis, and a decision must be made. An analysis that omits part of the situation analysis or only recognizes one alternative is not a good analysis. Second, each area must be covered in-depth and within insight. 2. Avoid rehashing case facts. Every case has a lot of factual information. A good analysis uses facts that are relevant to the situation at hand to make summary points of analysis. A poor analysis just restates or rehashes theses facts without making relevant summary comments. 3. Make reasonable assumptions. Every case is incomplete in terms of some piece of information that you would like to have. A good case analysis must make realistic assumptions to fill in the gaps of information in the case. For example, the case may not describe the purchase decision process for the product of interest. A poor analysis would either omit mentioning this or just state that no information is available. A good analysis would attempt to present this purchase decision process by classifying the product and drawing upon real life...
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...are given. It is understandable then that we should seek out more opportunities to apply our skills and make more positive impacts within our jurisdictions. It is this general attitude that led us to get involved in investigating cold cases. How We Got Started Mark had, for several years, been consulting with our Coroner’s Division as a forensic anthropologist. During this time he came to learn that there were numerous coroners’ cases in which the identity of the decedent was unknown. These cases were kept in three-ring binders on a shelf in the Sergeant’s office. Over the years, in the course of this forensic work, we would discuss these cases and the progress that was being made on them. The conversation usually ran along the lines of us asking “any luck with that 1980 homicide victim?” and the sergeant answering “well, we’ve gotten so many new cases that I haven’t been able to even look at it yet.” This went on for a few years and through two different sergeants. One day we, as a crime analysis unit, were brainstorming about how we could broaden our “client base”, as it were. We had been successful in integrating ourselves into our Investigations Bureau and had been involved in numerous major cases. And, of course, we had always been active in producing tactical and strategic analyses for our patrol personnel. But we knew that we could be doing more, particularly given the size and responsibilities of our agency. It was during...
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...BUSINESS CASE Presented to the Accountancy Department De La Salle University In partial fulfillment Of the course requirements In ACCTBA2 (C33) March 2, 2015 A stakeholder is typically concerned with an organization delivering intended results and meeting its financial objectives. In general, a stakeholder can be one of two types: internal (from within an organization) or external (outside of an organization). The stakeholders in this situation are Lanie Marquez and Tim Rodriguez who are also partners in the retail distribution business and their capital contributions are as follows P500,000 and P300,000 respectively they are an internal stakeholder since they are also the owners. The total Capital of both stakeholders is P800,000 and with a monthly salary for both partners at P15,000 on the assumption that both of them will contribute to manage the business equally. Assuming that both managed the business equally the total salary for the year for Lanie and Tim are P180,000 each. They share profit and loss equally and no interest will be given on capital contributed. The problem for this situation is that Lanie is starting to get concerned with the behavior of her other partner Tim. He only manages the business 50% of the time, which will mean that his salary of P15,000 will need to decrease by also 50% since he does not manage the business equally with his partner. The business has seen a downturn in the profit outcome and for the current financial...
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...Ralph’s Grocery and United Food and Commercial Workers Union The case that I chose for the week 6 critical thinking assignment concerns Ralph’s Grocery Company, located in California. It applies to this week’s material due to the fact that the case involves unlawful suspension and discharge of an employee, as reviewed by the National Labor Relations Board. Background In May 2011, Vittorio Razi was an employee at Ralph’s Grocery and was suspended and terminated after he refused to take a drug test without first consulting with his UFCW Local 324 representative. The company (Respondent) says that on the day in question, Razi’s behavior was in question, acting nervous, anxious, agitated, and slurred speech. After a couple managers discussed the...
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... Many people wonder why their own teeth stain so easily. The enamel on your teeth and chromogens are what stains your teeth, but what exact beverage stains teeth the most? I chose this topic because I was curious to know what stains teeth the most. It affects us daily because it could rot your teeth or you can’t pick up hot chicks anymore. So what causes teeth to stain? The temperature causes teeth to expand or contract making it easier for stains. So hot and cold drinks affect that. Color in foods and beverages come from chromogens. Chromogens are intensely pigmented compounds that stick to teeth enamel. Chromogens cause a lot of trouble when they mix and react with other stain causing and stain promoting factors. Tannis may be natural or synthetic tannis is another factor that stains teeth. Tooth enamel is porous making it extremely susceptible to stains. The darker the liquid the darker the stain. There are some examples that stain teeth. Not only sodas bad but also Gatorade. Beets are bad for you also. Mostly cause they’re concentrated. Berries dark skins stain teeth. Ketchup is also really bad because of its bright red color and high levels of acid. Dark liquids and sauces you put on your foods also stain teeth. Colored candy and popsicles both contain colorants that will transfer to the teeth and embed in the porous enamel. Fruit juices, especially grape and cranberry, leave a colorful tinge on the teeth and tongue. Colored sodas instantly discolor teeth. The citric acids...
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...efficient investigative products and services. As a result, the coverage requirements for ANACI and NACLC investigations have been enhanced to support a common content baseline for all agencies. Note that these enhancements apply only to those ANACI and NACLC cases submitted on an SF 86. The purpose of this FIN is to provide you with information concerning what case coverage changes have been made. The case price adjustments necessary to support these changes will be reflected in the FY 2007 case prices. ANACIINACLC Cases Currently, listed and developed issues which are identified in ANACI and NACLC cases (for non-DoD customers) are not pursued beyond the normal scope of the investigation. These cases are returned to the requesting agency so that the agency may decide whether to adjudicate the case based upon the information in hand, conduct additional follow-up themselves, or request a Reimbursable Suitability Investigation (RSI) from FISD to cover the additional issues. Beginning with FY 2007, expansion of these issues will become a standard part of both the ANACI and NACLC products. Effective October 1, 2006, issues apparent at scheduling or developed during the course of the investigation and which fall within the 5-year case coverage period, unless otherwise noted, will be expanded upon according to the following chart (exception: issues which are known to have been covered in previous investigations, or which would reasonably have been expected to...
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...find that you would like even more time. I recommend that you enter the exam promptly since I will make deductions for those exceeding the 9:00 o'clock end time even if you enter late. Third, know that the legal reasoning essay will come from Module 4 on immunity. The variety of scenarios in that question will force you to think about and explain the nuances between sovereign and personal immunity, between absolute and qualified immunity, about loss of immunity, etc. You will want to understand all four cases from that module well before the exam. I will expect specific citations to the cases and the principles that they enunciate. An additional case that might be useful for you to look at is Canton v. Harris. A second question will address the rulemaking process and the principles underlying it. You should "walk into" the exam (in a virtual sense) with a clear sense of a fully articulated rulemaking process, so that you can pick and choose elements as appropriate in the case you will be presented. The third question will be drawn from the text regarding the Constitutional framework. Finally, remember that "open book" exams can be as challenging as closed book because the "bar" (the expectation) is higher. I think you will find that prior preparation will make a good deal of difference. As stated before, when you open the exam, answer the questions initially in word and copy it back to the exam. That way, you will not lose work, time...
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...in which it is acceptable for anyone who has suffered a personal injury to seek compensatory damages through litigation from someone connected with the injury. It’s the idea that for every accident someone is at fault. For every injury, there is someone to blame. And, perhaps most damaging, for every accident, there is someone to pay. There are so many ridicilous cases througout history where people sue somebody or some company for no reason and get a lot of money from them. For example . A caretaker fell off a ladder and sued the local authority for not training him to use a ladder - and won.He could get up to 50.000 pounds compensation. One former ex policeman received nearly £90,000 compensation for the trauma of seeing a woman die after he crashed into her car during a 999 call .The husband of the woman killed by the policeman received £16,000 compensation. Policemen cause a tremendous number of accidents - so many, indeed, that one force has stopped its drivers from speeding. The effect is damaging to society. The courts become clogged up with greedy people out for themselves, many with no real case at all while other people with real compensation claims, the people disabled in accidents, crippled in operations or people who have lost loved ones due clear negligent behavior. All the other who just sue somebody with ridicilous acusations should be ashamed of themselves and I hope that in the future others avoid trying to cash in just because it seems so easy...
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...Case - Swisher System Corporation I. Company Background: Swisher Systems Corporation (SSC) is an industrial heating company which was established in 1949. SSC is an innovator of flexible heating products, especially with its knit and braided heating element. The heating element is multi-stranded resistance wire that is knit and braided with fibreglass and is the base technology for almost all SSC products. SSC is known in the industry as being the highest quality flexible heat supplier which produces control devices and heating cable. SSC’s competitive advantage is on the quality products which maintains higher and safer temperature that are more flexible than their competitors or other products in the market. II. Facts of the Case: A. Mike Watkins Director of Purchasing for Swisher Systems Corporation Solely responsible for purchasing all materials of SSC. Has various experiences in material management prior to SSC. Has more than thirty-five (35) years of industrial purchasing experience. B. Products at Swisher Systems All SSC products are solutions to industrial heating applications SSC manufactures fifty percent (50%) standard products and fifty percent (50%) custom orders. o The custom products can be applied to virtually all industries that require heating products. Industries like semi-conductors, food processing, medical, petrochemical and others. Biggest contributor of SSC’s sales is the cloth heating jacket, though expensive...
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