Bidco Foods Inc (Solution)

Should be used in class allowing students about 15

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should be used in class, allowing students about 15 minutes to read and perhaps another 15 minutes for them to work through the response in a group setting. If this case is used for an examination, about 30 minutes should be allowed. SUGGESTED ANSWER To: Stella ???? From: Management Accountant Subject: Operating Statements in Support of the Bonus Program Please find enclosed the report on my examination of the concerns of Mark , your store’s bakery manager. Introduction The manager of the Uchumi store requested a corporate management accountant to examine the concerns of the bakery manager in regard to the bonus program. Root Issue The root issue is that responsibility accounting is lacking. The bonus program is premised on financial statement performance. However, the recorded costs do not accurately reflect the costs incurred. Analyses The costs of the bakery department are not under the control of the bakery manager. There are a number of vivid examples. The store manager schedules employees for the bakery, without the involvement of the bakery manager. The store manager’s salary is charged to the bakery department. Other costs are charged to the bakery without the bakery manager’s approval. In short, the bakery manager is being held responsible for some costs he is not allowed to control.
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  • Summer '11
  • IndiraSomwaru
  • Management, bakery manager

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