Case Study - Tiger Paper Ltd
Required-
1. Identify the flaws associated with the current method of assigning shipping and warehousing costs to Tiger's products.
2. Compute the shipping and warehousing cost per tonne of FK sold by using the new method suggested by Sadia and Debbie.
3. Using the new costs computed in requirement 2, compute the profit per tonne of FK. Compare this with the profit per tonne computed by using the old method. Do you think that this same effect would be realised for other low-volume products? Explain.
4. Comment on Grace's proposal to drop some high-volume products and place more emphasis on low-volume products. Discuss the role of the accounting system in supporting this type of decision making. Support your discussion referring to relevant literature (academic and professional).
5. After receiving the analysis of ITC, Grace decided to expand the analysis to all products. She also had Debbie reevaluate the way in which mill overhead was assigned to products. After therestructuring was completed, Grace took the following actions: (a) the prices of most low-volume products were increased. (b) the prices of several high-volume products were decreased, and (c) some low-volume products were dropped. Explain why her strategy changed so dramatically.
6. Discuss the benefits and limitations of ABC. Which companies/industries would derive a benefit from ABC? And which companies/industries would not derive a benefit from ABC? Your answer has to be supported by relevant academic and professional literature.
Attachment:- Case Study.rar