This paper circulates around the core theme of Alternate problem E Shoe Express, Inc., manufactures two types of shoes, B-Ball and Marathon together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
Alternate problem E Shoe Express, Inc., manufactures two types of shoes, B-Ball and Marathon. The 1 answer below » Alternate problem E Shoe Express, Inc., manufactures two types of shoes, B-Ball and Marathon. The B-Ball shoe has a complex design that uses gel-filled compartments to provide support. The Marathon shoe is simpler to manufacture and uses conventional foam padding. Last year, Shoe Express had the following revenues and costs: Shoe Express, Inc. Income Statement B-Ball Marathon Total Revenue $390,000 $368,000 $758,000 Direct materials 110,000 100,000 210,000 Direct labor 80,000 40,000 120,000 Indirect costs: Administration View complete question » Alternate problem E Shoe Express, Inc., manufactures two types of shoes, B-Ball and Marathon. The B-Ball shoe has a complex design that uses gel-filled compartments to provide support. The Marathon shoe is simpler to manufacture and uses conventional foam padding. Last year, Shoe Express had the following revenues and costs: Shoe Express, Inc. Income Statement B-Ball Marathon Total Revenue $390,000 $368,000 $758,000 Direct materials 110,000 100,000 210,000 Direct labor 80,000 40,000 120,000 Indirect costs: Administration ——– ——— 40,000 Production setup ——— ——— 90,000 ——— ——— Quality control ——— ——— 60,000 Advertising ———- ——— 120,000 Net income before taxes $118,000 Shoe Express currently uses labor costs to allocate all overhead, but management is considering implementing an activity-based costing system. After interviewing the sales and production staff, management decides to allocate administrative costs on the basis of direct labor costs, but to use the following bases to allocate the remaining overhead: Activit Level y Activity Cost drivers B-ball Marathon Production setup Production runs 20 20 Quality control Inspections 40 20 Advertising Advertisements 12 48 Complete the income statement using these activity bases. Write a brief report indicating how management could use activity-based costing to reduce costs. Restate the income statement for Shoe Express, Inc., using direct labor costs as the only overhead allocation base. Write a report to management stating why product line profits differ using activity-based costing compared to the traditional approach. Indicate whether the activity-based costing method provides more accurate information and why (if you believe it does provide more accurate information). Indicate in your report how the use of labor-based overhead allocation could result in Shoe Express management making suboptimal decisions. View less » Aug 21 2015 06:48 PM
