Seligram Inc. Case Analysis

At the rise, the Electronic Testing Operations (ETO) measured two elements of claim: straightforward strive and parcel, but the parcel is grouped into a uncompounded claim pool that includes all claims and disconnected by straightforward strive dollars to obtain the parcel reprimand. (Q2) ETO’s superintendent selected up 5 elements to evaluate the contact of opposed accounting rule. The reputed claims from material rule can be computed as follows, consecrated the parcel reprimand 145%: Product Straightforward Strive Burden Total Costs ICA 917 1,330 2,247 ICB 2,051 2,974 5,025 Capacitor 1,094 1,586 2,680 Amplifier 525 761 1,286 Diode 519 753 1,272 Based on the accounting manger’s proposition, the exercise parcel can be disconnected into medium-hour and straightforward strive parcel. We use the revised parcel reprimand 21% and medium-hour reprimand $80. 1 to demonstration the updated claims: Product Straightforward Strive Parcel Medium Hour Medium Burden Total Costs ICA 917 193 18. 50 1,482 2,591 ICB 2,051 431 40. 00 3,204 5,686 Capacitor 1,094 230 7. 50 601 1,924 Amplifier 525 110 5. 00 401 1,036 Diode 519 109 12. 00 961 1,589 If ETO follows the consultant’s confide, discourses the ocean examination locality and unreflective examination locality as opposed claim pools. The three-burden-pool rule reports the claim: ($63. 34 for ocean locality parcel reprimand and $112. 63 for unreflective locality) Product Straightforward Strive Parcel Ocean Locality Hour Mech Total Costs ICA 917 193 8. 50 10. 00 1,665 2,774 ICB 2,051 431 14. 00 26. 00 3,815 6,297 Capacitor 1,094 230 3. 00 4. 50 697 2,021 Amplifier 525 110 4. 00 1. 00 366 1,001 Diode 519 109 7. 00 5. 00 1,007 1,635 Among the three claiming rules, we choose the consultant’s proposition (Q3). The accounting superintendent discourses the medium hours as separeprimand claim pool consequently the automated exercise rule leads to ample percentage of whole claim comparing to straightforward strive. Measuring the medium hour claims can succor us to assess the whole parcel excite servile. However, consecrated the selfselfselfsimilar medium hours, the opposed hours bestow in ocean locality and unreflective locality to-boot incurs opposed claims. We can see from Exhibit 5 that unreflective locality has remarkable item claim per hour. Therefore, the three-cost-pool rule can thread the claims tail to the explicit exercise factors excite explicitly. (Q1) According to the two explanations demonstrationn aloft, the precarious sample that causes ETO to fall is the uncompounded claim pool accounting rule. In the uncompounded claim pool rule, all fruits destroy straightforward strive and aloft in the selfselfselfsimilar distribution. However, some fruits deficiency excite straightforward strives time others claim automated mediumry exercise. And the trends of straightforward strive obsolescence to-boot restricted the anticipation of parcel reprimand, which causes the verall fruit claim assessment beseem misleading. Managerial Accounting Case Study Seligram, Inc: ETO Group 1 2 Although we choose the consultant’s proposition, the three-cost-pool rule tranquil can be excite improved by introducing another claim pool, the technical prop claims (Q4). Both the accounting superintendent and consultant view the professional and technical functions as the selfselfselfsimilar claim factor. However, we apprehend the technical prop is very opposed in affection comparing after a while professional claim. Each expression electrical element which sent to ETO varies exceedingly in its complication. For sample, a keyboard IC is abundant simpler then a 3D pictorial ruleing IC and claims short (or closely no) technical prop gone keyboard IC is a mature fruit. Professional claim usually includes unconcealed aloft such as instraightforward salaried employee, confidence, store/warehousing, telephones, and others. If we arrange the technical functions in the selfselfselfsimilar claim pool as government claims, then a keyboard IC and a 3D pictorial ruleing IC portion-out the selfselfselfsimilar straightforward strive parcel reprimand, which is not serious. Therefore we confide a four-cost-pool rule that separeprimand technical prop from unconcealed straightforward strive parcel. Q5) From the basis granted in Exhibit 5 and Exhibit 7, we can investigate the ocean examination locality parcel reprimand if the new medium is included. The principal year’s parcel reprimand achieve be: Hours Variable Depreciation Other Total Old Medium 33,201 887,379 88,779 1,126,958 2,103,116 New Medium 400 100,000 500,000 225,000 825,000 Sum 33,601 987,379 588,779 1,351,958 2,928,116 Machine Hour Parcel Reprimand $ 8 7. 14 (principal year) And the fostering years’ parcel reprimand: Hours Variable Depreciation Other Whole Old Medium 33,201 887,379 88,779 1,126,958 2,103,116 New Medium 2,400 100,000 125,000 150,000 375,000 Sum 35,601 987,379 213,779 1,276,958 2,478,116 Machine Hour Parcel Reprimand $ 6 9. 61 (fostering years) The ancient parcel reprimand investigated from three-cost-pool rule is $63. 34. Both the principal year ($87. 14) and fostering years’ ($69. 61) parcel reprimand per medium hour are abundant remarkable, specially for the principal year. Gone the new equipment is merely deficiencyed by one or two customers in the foreseeable advenient, we should discourse the new medium as separeprimand claim center, or the new equipment achieve accept a luckless consequence on ETO’s pricing erection.