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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