Acct 310 – Memo for AccountingACCT310-1104B-08 Managerial AccountingKeith SmithAmerican Intercontinental University OnlineDiscussion Board Unit 2I feel that expense was not evenly allocated within the two expanses. Each commercial companys retail arms are responsible for half of the cost to advertise this figure being 2.5M per. Each also should be responsible for sharing the warehousing expenses divided in half which would come to 1.5M each.
I would propose as an alternative assign the expenses based on actual business shares such as – expenses for advertising the annual sales would be the deciding factor. The responsibility for the commercial arm would become 150/170 or eighty eight percent and the retail arm would spend 20/170 or twelve percent. With this calculation the commercial arm would be responsible for 4.4M and 600K for the retail arm.
The commercial arm should pay seventy five percent of the actual expense, and the remaining twenty five percent would be covered by the retail branch. 3.75M would be covered by the commercial arm and 1.25M would be handled by the retail branch.
Aids in performance management of each section would be the determining factor for activity based cost allocation as the most accurate methodology in this example. Utilizing the traditional methodology allocating costs could lead to a possible disadvantage that could cause the company to fail to hold a competitive edge in the marketplace if one section is bearing the lions share of expense. 4M of the costs incurred were allocated to the business in comparison utilizing the activity based cost methodology would be 1.338 this would account for the high level of sales activity in the unicycle business compared to the bicycle market. On a final note, the traditional method I find to be biased and could very
n>t adversely affect the pricing of the business. The unicycle business is a unique entity and needs to maximize its revenue potential. It is important to consider the impact on this business as we are currently dealing with a new segment. Although we are using ICDT’s market-based methodology which means that no other company might want to use it, it’s just not the best option for any unicycle segment where we could benefit from a cost advantage with the market being small. The market could benefit a substantial portion of our business from the cost savings due to some portion of the revenue. Thus, we need to consider a few things to consider when evaluating these costs. We should also note that there is a significant gap between unicycle revenues and gross sales, so we are reviewing the results of our unicycle business to see if we might be able to make these changes.
8. Conclusion and Review of Pricing of Unicycle Business.
We’ve done some preliminary calculations. While it could be that the segment does a better job of adjusting relative to other segments, it is still something that our market research team cannot measure. This should mean that the segment might not make a good, sustainable investment. We have a small group of executives working on this and we have been researching performance metrics that allow us to evaluate the segment. What they can learn from this is that we can still optimize in a much greater degree in the unicycle business than is possible for other segments.
Conclusion
For simplicity and simplicity, I have outlined our current business and pricing objectives in terms of the unicycle industry.
1. Introduction
We start for a number of reasons. The initial focus on reducing revenue was the first. All of our business has experienced growth and is currently growing. We have grown from an estimated $5M to $8M in five years (2018-Present). We have added the potential of building a global segment at a very high level within just the first few months of implementation. We consider the unicy business to be profitable and do not have any additional debt under management. Our main revenue stream is primarily software applications where we manage revenues on the unicycle business (with a small group of partners). We are not just focusing on software-powered operations, just the business is a completely unique and unique business with an incredibly diverse set of markets in which we can expand globally.
This business has had a relatively slow growth and is currently in a relatively expensive cash position, so the overall pricing plan is designed to provide great value for the customers at $10-40M. However, there is an assumption to be made that our unicycle business is currently in need of significant capital if we can ramp up our growth further. This is largely because we continue to work with vendors to develop an optimal strategy for the startup while also balancing our costs to pay for the