新西兰assignment本科课程作业要求:Taps and Plumbing Supplies

The case scenario情况

The Taps and Plumbing Supplies (TaPS) business began as a brass and iron foundry, before moving to manufacturing taps. Today, TaPS is one of Auckland’s established supplier of tapware.水龙头和水暖器材（TAPS）业务为黄铜和铸铁厂开始之前，移动到制造的水龙头。如今，水龙头是奥克兰的水龙头供应商之一。

Taps and Plumbing Supplies (TaPS) manufactures two models of bathroom taps at their Panmure plant. The plant has two production departments - machining and assembly.水龙头和水暖器材（TAPS）生产两种型号的浴室水龙头在他们潘默尔厂房。该厂有两个生产部门 - 机械加工和装配

Two models of taps are manufactured - a basic and a premier model. The premier model was introduced in 1998 and it has proved to be both popular and profitable. In 2012 it accounted for 40% of the total units sold and over 50% of the company’s profit. These statistics are shown in the 2012 Statement of Financial Performance.两种型号的水龙头制造 - 一个基本的和首要的模型。英超模型在1998年推出，它已被证明是既流行和有利可图。在2012年，它占已售单位总数的40％，超过50％的公司的利润。这些统计数据显示在2012年的财务业绩报表

The Cost of Sales expense is comprised of direct materials cost ($460,000), direct labour cost ($360,000) and production support costs ($720,000). Of the $720,000 support costs, the management accountant has been able to trace $192,000 directly to the machining department and $168,000 directly to the assembly department. The remaining support costs were attributable to the various service departments.销售费用的成本包括直接材料成本（$460,000），直接劳工成本（$360,000）和生产支持成本（$720,000）。 $720,000的支持成本，管理会计已经能够跟踪$192,000直接到加工部门和168000美元直接装配部。余下的支持成本占各种服务部门。

In Stage 1 of the existing cost allocation systems this service department cost ($360,000) was allocated to the machining and assembly departments based on the machine hours used in each department.

In Stage 2, separate cost driver rates were determined for the two production departments based on their respective direct labour hours. These rates were used to allocate the support costs to the two products.

Figure 1 illustrates this two stage cost allocation of support costs.

Figure 1 - Two Stage Cost Allocation of Support Costs

TaPS profitability has been declining for the last two years despite the introduction of the Premier model that has now captured over 65% of the share of its segment of the industry.  Market share for the Basic model has decreased to 12%. In an attempt to understand the reasons for the decline in profitability, the company has formed a special task force.

This task force has proposed a new costing system based on an activity analysis that has been undertaken. Three cost drivers have been identified - direct labour hours, set-up hours and number of orders. Production support costs have been traced to four cost pools; each identified with a unique cost driver as presented in Figure 2 and Table 2.
The task force also analysed selling and administrative expenses using an activity analysis. This analysis is given in Table 3.
Required:

(a) Compute the unit product costs and profit for both the basic and the premier models under the existing costing system.
  (Show all the intermediate steps including the cost driver rates and a breakdown of product costs into each of their components)
(15 marks)

(b) Compute the unit product costs and profit for both the basic and the premier models under the proposed activity-based costing system
 (Show all the intermediate steps including the cost driver rates and a breakdown of product costs into each of their components)
(23 marks)

(c) Explain why the cost and profitability estimates for each product differ under the two costs systems and discuss why these differences might be important to the company.

(15 marks)

(Note: Please use excel for calculations where appropriate)