Cost allocations are an important part of Anthony's Orchards budgeting system. Anthony's Orchards is reviewing the way decision rights are partitioned throughout the company. Using Anthony's Orchards website or Optional Resources, answer the following discussion question:
Why is it important to continue to allocate costs? Would you recommend that Anthony's Orchards continue to allocate costs? Why or why not? How would you recommend allocating the purchasing department to the three cost centers? What is the basis for your decision, i.e., number of apples used, etc.?© BrainMass Inc. brainmass.com October 17, 2018, 3:33 am ad1c9bdddf
Anthony's Orchard must allocate costs. The reason for this is that direct costs can be attributed to each cost center. On the other hand indirect costs cannot be traced easily to each cost center. When some purchasing costs can be directly attributed to a particular cost center, this must be done through the process of cost tracing. For instance, the purchase of sugar for the Apple Products department can be traced. On the other hand most of the indirect purchasing costs cannot be traced to a cost center. Because these purchases are common to each of the cost centers and cannot be traced to each cost center.
Yes, Anthony's Orchard must ...
This response presents a brilliant discussion on Anthony's Orchard:
Anthony's Orchards: Discuss compensation plans for sales people
Understanding, analyzing, and providing accurate and relevant information to key areas helps guide management decisions. Review the job postings and financial data on the Anthony's Orchards website. Based on these postings, how do the two job descriptions influence your decision making about marketing variances? The method of paying a sales person can influence and change behavior. How do you recommend paying your salespeople in order to have them sell in the best interest of the company? How will the decision impact the company? Should the company focus on gross margin or contribution margin when determining its pricing strategy and its impact on throughput accounting?View Full Posting Details