Activity-Based Costing-Assignment Solution

Instructions:

All information required for this assignment is provided in the Unit 2 Student Workbook [Excel] for this unit.

Read the Chandler Corporation [PDF] case study and complete the following requirements.

Quantitative Analysis: 

Chandler Corporation is currently producing several products, including both custom and standard designs. It has received requests for two new products: swimming pool shades and landscape trellises. It is considering whether to produce either or both of these products. Based on the projections in Exhibits 1 to 3 describing the current capacity and required capacity needs for the new products, complete the following requirements:

1. Using ABC, compute the Predetermined Overhead Rate for each activity.
2. Compute the cost of unused capacity for each activity and in total.
3. Compute the TOTAL and UNIT cost of making the full demand of pool shades assuming that Chandler bases its rates on the predetermined overhead rate.
4. Compute the TOTAL and UNIT cost of making the full demand of trelli, assuming that Chandler bases its rates on the predetermined overhead rate.
5. Compute the TOTAL and UNIT cost of making the full demand of pool shades assuming that Chandler bases its rates on EXPECTED capacity (used capacity plus required capacity for the full demand of pool shades).
6. Compute the total and unit cost of making the full demand of trellises assuming that Chandler bases its rates on EXPECTED capacity (used capacity plus required capacity for the full demand of trellises).

Qualitative Analysis:

In a 2-3 page report, based on your quantitative analysis, discuss the results of what your quantitative analysis means for Chandler.  When considering a decision to make the new products, would costs computed using practical capacity (c and d) or expected capacity (e and f) as the denominator provide better information to Chandler’s management? Explain your answer.  Support your recommendation with a minimum of 3 academic resources.

READ this: Please make sure prepare a 2-3 page summary

Deliverables

• Quantitative Analysis (Excel Required): You are required to use the provided Excel workbook to complete the quantitative analysis for this assignment.
• Qualitative Analysis (Word Required): Prepare a 2-3 page summary addressing the required qualitative analysis, as noted in the Student Workbook.  Your paper is required to be formatted according to APA requirements.  Be sure to incorporate key concepts from this unit’s readings and properly cite your references according to APA requirements.  Do NOT embed the results of your quantitative analysis in your Word document.  You should only reference parts of your quantitative analysis in your written analysis.  Your written responses to the qualitative prompts should not be presented in a question and answer format.

Assignment Resource(s)

• BU610 Unit 2 Student Workbook
• Chandler Corporation [PDF]