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Cost accounting allocation methods proposed by Revenue Canada

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See the attached file.

Based on the information attached, take on the task of obtaining a cost per unit figure the would hold up to the criteria proposed by Revenue Canada. This project will entail using several allocation methods and inventory techniques, which you will need to configure in multiple perspectives before you may find a satisfactory cost figure. The proper strategy would be to divide the possible permutations among the group members, program an Excel worksheet and sift through the possibilities. Once you have found a satisfactory cost figure, draft an answer letter to Revenue Canada to, hopefully, resolve the matter. In your letter you will provide a step by step chronicling of the allocation methods and all your calculations to show the price is acceptable. If, however, you are not able to provide a cost figure that will justify the current market price, present in your paper the procedures used to calculate your cost data and market price.

You are to prepare appropriate analysis of the data and prepare a written report to support your conclusions, along with supporting schedules. I suggest that the quantitative analysis be performed with Excel, as the number of options available are quite numerous and you will need to find the best combination of methods.

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The solution presents a report together with Excel calculations to support the position taken.

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