Bc Memo

SAMPLE BUSINESS MEMORANDUM

(The business memo format is best suited for presenting analysis and results of an issue that requires no more than 2-3 pages of text and a couple of tables and exhibits. Anything longer should use a business report format with a very short transmittal memo).

DATE: TO: FROM:

March 13, 2004 Martha Glamour, CEO Stylish Living Magazine Simpson and Lee Consulting Associates (This tells the reader your role as writer – e.g.

consultant, analyst to reporting to manager, etc.)

Thomas Simpson (Principal Writer) Richard Lee (Principal Editor). (The words

principal writer and editor do not appear in a real business memo; they are here for grading purposes only. In the real world you would substitute the titles of the authors, e.g. Partner or Senior Manager).

RE:

Analysis of existing cost system and desirability of switching to ABC.

Thank you for allowing us the opportunity to work with your company (simple courtesy and positive start). As requested, we have evaluated the strengths and weaknesses of your company’s existing cost system and evaluated the desirability of switching from the existing cost system to an activity based cost system ABC). (This sentence should clearly state the “big” issue in the case. It should also help to remind the intended audience of the purpose of this memo). Our analysis uses Products X and Y as test cases to understand how the existing and proposed ABC systems would compute product costs. Based on our study, we have reached the following conclusions:

1. The cost of Product X is higher than Product Y under the current system; the cost Product X is lower than Product Y under the ABC system. 2. The existing cost system has several weaknesses that make the data unreliable and misleading. 3. We recommend that the company should abandon the existing system and replace it with an activity based cost system as it will provide better product cost information for decision making.

(The three points above...