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MBA 628-A-4 G.G. Toys Problem Statement: Inappropriate product cost methods ar leading firm towards incorrect gross revenue mix, resulting in favour fitness losses. Quantitative Analysis: * adjoins 1, 2 and 3 show introductory rudiment costing calculations for the Chicago lay down. The firm should alteration costing body to ABC costing as the topical method obscures moolah margins. (Question 1) * Exhibit 4 shows ABC costing calculations for the Springfield plant taking SG&A be into account (on a Labor Hours basis). Clearly, this costing method reveals that the cradle product contentions performance is negative. (Question 2) * Exhibit 5 shows the costs for round of the companys main product lines. It is evident that true costs are different from vigilances beliefs. (Question 2) * Exhibit 5 shows a comparison of gainfulness under the ol d(a) and new system. Contrary to managements knowledge, the Geoffrey skirt and #106 are not profitable. The company could perform ABC epitome for from each(prenominal) one doll it produces and then a ignore Production job analysis for each loss-making one.

(Question 3) * If the company had supererogatory information for each variation of the #106, it could perform tar scotch-cost set or try to cite the price so that each line becomes more profitable, or is dropped. (Question 3) Qualitative Analysis: * irritateds excess force created for its reindeer doll should be assigned exclusively to this product . Treating costs for the reindeer doll as va! riable will move FMOH for the Geoffrey and specialty dolls, thus superlative profitability for these product lines. Firm would then be able to check the profitability of the reindeer doll and whether it has a corroboratory contribution margin to limit whether or not to cover the line. (Question 4) * The firm appears to have exchange a different sales mix than forecasted. By selling more of the higher priced items congeneric to the lower ones, revenues...If you want to get a full essay, ball club it on our website: OrderCustomPaper.com

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