Waste treatment — After crushing, the pulp, skins and stems that are left over must be disposed of. Where to include the wine master expense: It is estimated that it will take hours to crush the grape harvest.
Harvesting activity — The Chardonnay grapes can be harvested at the average rate of Regular Chardonnay is blended by combining the Chardonnay wine left over after bottling the Chardonnay-Estate with the fermented generic wine; the blend mixture is two parts Chardonnay grapes and one part generic grapes.
Please place the order on the website to get your Classic pen company case originally done case solution Related Case Solutions: They could invest in more computers to increase the amount of scheduling being done by computers and as a result lower their indirect labour costs.
Summary The AVS case is based upon actual wine industry data, although the data has been simplified to reinforce the teaching points and concepts. A well-defined ABC cost allocation will provide more accurate costing information than a less-sophisticated cost allocation system.
B de B Case: Most of the indirect labour costs and computer system costs are related to scheduling and purchasing. The case can be taught in a minute class, or by omitting the decision analysis question 50 minutes would be sufficient. The following discussion contains the answers to the questions listed in the case, and does not detail the solutions to alternative questions.
The cost for computer systems is made up of two activities: However, the expenditures in the first quarter of were much higher than expected and management was facing the difficulties to repay the loan that it had borrowed. Even though the numbers show the red and purple pens are more profitable individually red How to Write a Summary of an Article?
The cost for indirect labour is made up of three different activities: The Blanc de Blanc is the poorest performer; recommendations to Kay Aproveche would be to explore both pricing and cost control opportunities for the Blanc de Blanc wine.
This factor results in 63 As part of the discussion we will examine the rationale behind listing wine master as a fixed or a variable expense. A Votre Sante Page 3 of 17 Electronic copy available at: After the grapes are harvested, they are brought to the winery for washing and crushing.
Kay has a relationship with a grower who grows two types of wine grapes, a Chardonnay and a generic white grape.
Crush activity — Relates to the pounds of grapes crushed. Do not break out the variable or the fixed costs by type of wine. It is estimated that 80 pounds of grapes can be harvested each hour. The cost for computer systems is made up of two activities: There are three parts to calculating this answer: It should introduce incentives for the sales force of the company in order to motivate them to achieve sales targets………………….
The net profit margin and operating profit margin are also increasing. Assume that AVS did not buy the grapes referred to in Question 2. The final issue Pen Co. AVS buys the grapes at the point that they have ripened on the vine.
While Blanc de Blanc is not profitable, a product-line contribution analysis would need to be completed to determine if Blanc de Blanc has a positive contribution margin, and therefore contributes to covering fixed costs of AVS.
The growth in the working capital variance is smaller than the negative variance of the growth in sales.
The variance analysis clearly shows that the sales of the company are consistently declining and are not being achieved as projected by the company.Teaching Note for (). Harvard Business School.
Harvard Business Review. Classic Pen Co.: Developing an ABC Model case analysis, Classic Pen Co.: Developing an ABC Model case study solution, Classic Pen Co.: Developing an ABC Model xls file, Classic Pen Co.: Developing an ABC Model excel file, Subjects Covered Activity-based costing Cost analysis Management accounting Operating costs by Robert S.
Kaplan Source: HBS Premier Case. View Homework Help - CLASSIC PEN COMPANY from ECON at Bocconi University. Cost Accounting Case Study Analysis CLASSIC PEN COMPANY - Developing an ABC Model - Karthikeyan (IEMB, MISB%(29).
The Classic Pen Company Case Jane Dempsey, controller of the Classic Pen Company, was concerned about the recent financial trends in operating results.
Classic Pen had been the low-cost producer of traditional BLUE pens and BLACK pens. Profit margins were over 20% of sales. Classic Pen Company Case A VOTRE SANTE: PRODUCT COSTING AND DECISION ANALYSIS IN THE WINE INDUSTRY Priscilla S.
Wisner Department of Accounting and Information Management College of Business University of Tennessee Stokely Management Center Knoxville, TN Phone: CASE ANALYSIS: CLASSIC PEN COMPANY The Classic Pen Company, initially a low cost producer of blue and black ink pens, decided to expand its product line by introducing red and purple pens into the market.Download