Posted: March 5th, 2016

Part II: Present the following questions (similar to those discussed in Barba Yiannis or Classic Pen or in other cases discussed in class).

Part II: Present the following questions (similar to those discussed in Barba Yiannis or Classic Pen or in other cases discussed in class).
(No need to do anything else in this part. Just type the following questions)

1.What is the major objective of this case?
2.Which are the major problems faced by this firm?
3. Prepare a diagram (similar to the ones shown in module 3) to show all the activities which are taking place in your organization (in sequence).
4. Prepare two diagrams, one under the existing traditional cost system and the other under the ABC system. In each diagram identify a) overhead or indirect costs, b) activity cost pools, c) cost drivers, and d) products (types of pens). [for suggested diagrams see BarbaYiannis, Classic Pen or Credit Agricole, Gourmet Coffee cases and Lecture notes module 3].
[to simplify your case, you may use, if you want to, max 5 activities out of those presented in #2 above]
5.Find the cost per product or service line under:
a.the traditional costing system
b.The ABC system.
6.What conclusions can you draw by comparing the results of the above two methods? In your answer explain clearly the major differences between traditional and ABC systems. Should show here numerically which incorrect drivers or activity cost pools led to the aforementioned differences.
7.Which are the major advantages and disadvantages of each method regarding a) costing, b) planning (budgeting, CVP analysis, etc), c) control (eg performance evaluation, balanced scorecard), d) decision making and pricing?

Part III: Answer all above questions (be short, clear and to the point. Suggest to use graphs and tables in giving your answers, where possible. Prefer to have your answers in point form, where possible (about 2-4 pages).