Kings mountain distillery case

Why or why not? Evaluate the statement and explain how top management should be convinced about the advantages of using ABC to allocate overhead costs. Give reasons to substantiate your response. If yes, why do you feel so, and if no, what makes you feel that way?

What could be the explanation for the increase in selling, advertising and distribution expenses between and ? The company expects to produce and sell 2, units of Product F and 6, units of Product G during the current year.

What controls may need reconsideration now, and how would you think about developing new controls and control systems for use in the future? What actions, if any, would you recommend Kings Mountain Distillery take with respect to selling, advertising and distribution costs?

Inthe opening inventory isbarrels, barrels purchased are 63, and the closing inventory isbarrels. Labor and supplies expense of chemical laboratory g.

Kings Mountain Distillery, Inc.

The company uses ABC method to compute unit product costs. Present your views on one side of these discussions and present justifications for your choice.

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They expect the firm to expand into other services including flowers, furnishings, decorations, and music. Presently, KMD charges the cost of barrels to the Income statement in the year the barrels are purchased. Depreciation on factory equipment and warehouse equipment h. I have attached the Case Study and the Case Exhibits.

Be as specific as you can be in your analysis and suggestions. All these costs are directly related to the manufacture of liquor and hence should form a part of manufacturing expenses which should be charged to the cost of finished goods produced.

An alternative to charging the barrel costs directly to inventory would be to treat the barrels as if they were machines, capitalizing their cost, and depreciating them over their useful lives.

Are you of the opinion firms like Johnson Associates, producing and selling large quantities of relatively few products would have no need for an ABC system?

What are some of the management control problems and future management controls problems that KMD is facing or may face as it grows and changes and as the experienced management team is replaced by managers who have not grown up in the business?

Laboratory labor and supplies expense are direct and variable costs with respect to number of barrels in the aging vats. With the help of the above information, answer the questions that follow: It needs top management support and cross-functional involvement when implementing an ABC system.

The business began ten years ago as a one-owner bakery, but has dramatically changed in size and function during the past five years. Johnson Associates employs six full-time and ten part-time employees. Would you recommend that KMD consider using this accounting method?

The costs would include - a.

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Cost of barrels used in the ageing process e.Essay about Kings Mountain Distillery Case 1. All costs to “produce” the whiskey should be included in the cost of inventory.

In the given current situation Kings Mountain Distillery charges the cost of barrels to the income statement in the year when the barrels are purchased. If KMD would charge the cost of barrels to inventory. Kings Mountain Distillery Case Essay.

Cost Accounting - ABC Case Study

bottles All these costs are more or less directly related to the manufacture of liquor and should form a part of manufacturing expenses which should be charged to the cost of finished goods produced.

Kings Co.

Kings Mountain Distillery

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Add Remove. This content was STOLEN from - View the original, and get the solution, here! Discussion Question I. Kings Mountain Distillery much for your assistance and expertise with this case! If these methods of accounting.

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Kings mountain distillery case
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