Eastvaco Third Edition

Eastvaco, Inc. A Comprehensive Managerial Case – 3rd Edition

Supporting Files

1. Eastvaco, Inc., 10K Report 2. Ratio Worksheet

Ratio Calculations

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1. Initial Analysis of Eastvaco and the Charlotte Facility 2. Financial vs. Managerial Accounting 3. Discussion Overhead in the Breakroom 4. Activity Based Costing and Management 5. Controlling Cost and Performance Measures 6. Manufacturing Alternatives and Relevant Costs 7. Variance Analysis 8. Costing, Budgeting and Internal Reporting 9. Company Comparison and Evaluation 10. Organization Structure and Inter-Company Transfers 11. Global Commerce 12. Revised Analysis of Eastvaco and the Charlotte Facility

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Assignment Files

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Name

Activity Based Costing and Management

Sue, the corporate controller, has thus far been impressed with your performance at the Charlotte plant. She thinks it is time for the Company to move forward with a more precise costing system. She meets with you to discuss if you are able to implement Activity Based Costing at Charlotte. Being on the fast-track, you are eager to demonstrate that you should be the successor to Sue and agreed to pilot ABC at Charlotte. You have gathered the following interim data for envelopes and cups. Total production overhead $5,017,500 Envelopes Direct costs $8,250,000 Units produced 1,500,000 Machine hours 200,000 Direct labor hours 34,500 Number of quality inspections 1,000 Revenue generated by the two products $15,000,000 Cups $8,750,000 350,000 50,000 153,625 6,500 $16,800,000

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Required: 1. 2. 3. 4.

What are the steps in ABC implementation? Provide 3 possible non-value added activities that the Charlotte facility may be experiencing? Using the old plant-wide rate calculate gross profit and the rate of return on the two products. Using the new cost pools and cost drivers calculate gross profit and the rate of return of the...