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ACCT7107 Case Assignment
Dakota Office Products
You are a junior accountant at the business advisory division of BestManaging – _a medium
size accounting firm. You have recently reached an important milestone in your career: you
have been confirmed for your position, which makes you a permanent staff member at the
firm.
You have been assigned to one of the consultancy teams in your division to work with a new
client Dakota Office Products (DOP). DOP has recently suffered its first ever loss in the history
of the business without knowing what caused the loss.
Since your confirmation, you have been assigned more critical tasks by your team leader. You
are currently working on providing responses to the following task items in preparation for the
next meeting with the client:
1. The client’s costing system:
a. Propose the most appropriate costing system for DOP. Specify your choices of all
relevant elements of a costing system and justify your choices. (10 marks; < 200
words)
b. In consideration of your analysis in part a., critically evaluate the appropriateness of
DOP’s current choice of costing system. (10 marks; < 200 words)
2. The client’s pricing method:
a. Propose the most appropriate pricing method for DOP. Justify your choice of the
pricing method. (10 marks; < 200 words)
b. In consideration of your analysis in part a., critically evaluate the appropriateness of
DOP’s current choice of pricing method. (10 marks; < 200 words)
3. Critically evaluate DOP’s costs and benefits of introducing the desktop delivery service
(DDS) to determine if this particular service provision enhances DOP’s profitability as
expected. Reference any relevant calculations. (15 marks; < 200 words)
4. With reference to both the outcome of your prior customer profitability analysis with the
use of the cost information from an activity-based costing system (Topic 4 & 5 tutorial
work), and your most recent analyses as presented in Questions 1 to 3 above, explain the
reasons why DOP suffered its first ever loss in the business’ history. (20 marks; < 250
words)
5. The cost item “order entry expenses $800,000 (Exhibit 1)” consists solely of fixed annual
salaries of data-entry personnel. Critically evaluate the appropriateness of allocating this
cost using the available data. (10 marks; < 200 words)
6. Make three (3) actionable recommendations to address the most critical issues that have
contributed to DOP’s recent loss. (15 marks; < 200 words)
Note: an actionable recommendation is a recommendation that sets out the actual action
plan, for example: if the general recommendation is to reduce labour costs, then the
actionable recommendation could be to reduce labour costs by negotiate lower wages
with the workers.
Note: Word counts are inclusive of any calculations presented.
Total available marks: 100