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Unformatted text preview: 17-1 1. Lines 17 and 11- Semi variable costs allocations are based on direct labor hours this is assumptive that each employee works the same number of hours each week--this is inaccurate because when changes are made to the employee schedule the allocations of the costs will change Line 15- The consultant doesn't explain how to change the cost accounting system to more accurately reflect each department uses of resources Lines 16 to 19- Agreed, why does he use Volkswagon standards when the company is GM? 2. Increase prices enough to decrease overhead costs and generate a profit 3. Mr. Delaney should still own the service center but should outsource it to a third party manager and have a separate accountant handle the books 18-2 1. 2. Wills methods seems to inflate costs more. There are no material differences because they are still the same products. 3. Louise's theory seems to be more accurate and specific because her theory is "activitybased" and is not a summary. It is direct and line item. ...
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This note was uploaded on 02/12/2012 for the course MBA 551 taught by Professor Smith during the Spring '11 term at Indiana Wesleyan.
- Spring '11