Examine the use of standard cost system


DISCUSSION:

· Use the Internet to research recent articles on the channel stuffing practice used by a company to increase income by sending suppliers in the distribution channel more inventory than they are able to sell.

1. Channel Stuffing

Respond to the following:

Evaluate the requirements under GAAP related to channel stuffing practices on financial statements. Recommend key additional requirements, and justify those requirements.

Examine the impact of channel stuffing on financial reports used for internal decision making. Create a scenario involving a faulty internal decision based on channel stuffing.

2. Carton Medical Devices

Respond to the following:

Determine how the standard cost system in Carton Medical Devices can be used for product costing and inventory valuation. Indicate the efficiencies that can be gained from the system.

Examine the use of Carton‘s standard cost system in product costing for cost analysis, and indicate the intelligence that management is likely to gain using this approach.

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Cost Accounting: Examine the use of standard cost system
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