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Describe at least two method of costing employed

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Describe at least two method of costing employed by the Tyco International. (If you are unable to locate specific information on-line, feel free to infer, as long as you discuss the approach in sufficient detail). Was this approach adequate, or did it contribute in any way to the firm's subsequent problems (financial scandal)?

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Brief summary of the firm's problem in 2002:

I reviewed the 2002 Financial Statements as that was the year that the SEC asserted fraud against the management for taking out excessive loans at low rates and trading them as bonuses without authorization. The managers sold millions of dollars of stock and this was fraud since they didn't disclose their very large unauthorized loans to the public prior to the trades.

I attached the 2002 annual report.

Two methods of costing that Tyco used (or could have used), are job costing and process costing.

From this excerpt (page 7 of 2002 annual report) I infer that they use job costing for their fire protection system product:

"We install fire protection systems in both new and existing structures. Our fire protection systems
are purchased by owners, architects, construction engineers and mechanical or ...

Solution Summary

Your response is 519 words, including quotes from the annual report, showing that they likely used job costing and process costing. The 2002 fraud and whether this was due to the costing practices is discussed.

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Describe the specific analysis methods

Can you help me get started with this assignment?

Using the Riordan Manufacturing Service Request SR-rm-004 form (PASTED BELOW), prepare a paper that accomplishes the items listed below.

Please see ** ATTACHED ** Scenario for complete details!!

Please ignore the "Expected Results/Impact when completed" section in the service request; instead focus the paper on the IT scope and proposal addressing the items listed below.
Explain the scope and feasibility of the project (What needs to be created or changed from an IT system perspective).

Describe the requirements-gathering techniques and methods you would propose to use for the project. Describe the specific analysis methods which will be used to determine the user requirements.

Identify the key factors or technique you will use to verify the requirements are successfully gathered.


Service Request SR-rm-004
Analyze HR System

Organization: Riordan Manufacturing
Locations: All Plant Locations
Requester: Hugh McCauley, COO

Description of Request:
Analyze the HR system to integrate the existing variety of tools in use today into a single integrated application.

Background of Request:
We would like to take advantage of a more sophisticated, state-of-the art, information systems technology in our Human Resources department.

Expected Results/Impact when completed:
Define the business requirements for the development of an HR system to support the objective of this request. Create a detailed project plan that provides a list of all the tasks, resources, schedule and budget required to complete the project. The project should be completed in approximately six months, so the new system can be utilized in the second quarter of next year

Riordan Manufacturing, Inc. is an industry leader in the field of plastic injection molding. With state-of-the art design capabilities, we create innovative plastic designs that have earned international acclaim. Attention to detail, extreme precision and enthusiastic quality control are the hallmarks of Riordan Manufacturing. With facilities in San Jose, California, Albany, Georgia, Pontiac, Michigan and Hangzhou, China, we have the capacity to fulfill your unique needs. Riordan Manufacturing is wholly owned by Riordan Industries, a Fortune 1000 enterprise.

Some of our products ...
? Plastic Bottles
? Fans - All sizes
? Heart Valves
? Medical Stents
? Custom Plastic Parts

The firm is attempting to consolidate customer information to deliver better value to the customer. The firm has historical records in many disparate databases, as well as in paper files and microfiche. Below is a listing of information the firm has available to consolidate into a CRM system.
Historical Sales
Riordan has a system to track historical sales. In the past, most sales data was recorded using paper and pencil. In the last few years, the firm has managed the information electronically. Information available includes the following:
? Dates including order, delivery, and payment dates by order.
? Unit and dollar volume of each product including plastic bottles, fans, heart valves, medical stents, and custom plastic parts rolled up to be examined by product group and customer.
? Sales by customer to include price paid, cost, margin, and discount given.

Files of Past Marketing Research, Marketing Plans, and Design Awards
The marketing organization wants to build on past knowledge. As a result, past marketing plans and results from past market research studies are stored in a file cabinet in the marketing department. The firm has a showcase in the lobby to display the various design awards earned. The firm is assessing the possibility of hiring a part-time college student to scan the documents electronically.
Sales Database
The company has 15 - 20 major customers, including a government contract for fans. The firm has 12 minor customers. Each member of the sales force maintains his/her own set of customer records using a variety of tools. Some sales team members use paper and pencil, others sales management software such as Act, and others a hybrid. In order to better understand and anticipate customer needs, the firm is evaluating a new integrated customer management system to accompany the new team selling approach that will be soon rolled out.
Production Records
The production plan maintains records of the number of units produced of each item by shift, which can be rolled up to the product group and year.
Profit and Loss Statements by Item and Group
The marketing department, with the support of the finance and production departments, maintains profit and loss statements, by item and by group.
Marketing Budget
The firm has historical and current annual budget allocations for marketing communications and marketing research.

Marketing Communications activities include:
? Sales force promotions
? Price / volume discounts to key accounts
? Public relations
? Brand development
? Tradeshows, events, and sponsorships
? Customer user group underwriting
? Literature and other collateral material

Marketing Research expenditures include:
? Market size / opportunity studies
? Customer focus groups
? Brand development research

Marketing Budget Anticipated Results
Two year plan to reach the $50 million revenue mark. This objective was developed collaboratively with Dr. Riordan along with the executive team. It incorporates the input of the line managers closest to the day-to-day operations. The objective will be achieved through:
? Increased sales to existing customers by increasing sales force promotions, price discounts, and customer user group services.
? Expanded sales to new customers by implementing public relations activities, trade shows, brand development and sales force promotions.

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