Question

CASE 8.1 ACTIVITY-BASE D ANALYSIS AND BUDGETING. Doubtfire Press produces children's books for national distribution through mainstream distributors such as Baker and Taylor. It has recently decided to implement activity-based analysis and ABB to help it gain control over its publication costs. There are a number of activities and professionals involved in publishing a children's book, as summarized in the table below. MANAGEMENT ACCOUNTING

Answer 1

A. Activily Duration Pohal Cost Duration 15,000 1500 19,00 120 20 0.25 336 - - White Book 2. 1 Design Book 30 hrs Illustrate Book Imouth Negotiate ast &design tours Crcate design files 20 hs Send design files to Printer 15 mins Create color pscogs 2 weeks Approve colow proof Rescan and correct proof tweek Create plates for printing Iday -Print pages for 5000 books ulus Bind pages for 50oo books 8 has Negotiate terns (with dist. I week Ship bode to distribution w/h 2 dags Market book 1 moult, - Total 15,000 solch. 19,000 151 15 solth 50 th 2.500 100Hs poo (500 Spoo 3000 100 Soo 12,000 - 168 24 1000 12.5 2.500. 100 1,000 1500 5000 3000 1200 500 12,000 57312.250 168 48 - 120 3,721.25 Total Total clapsed cost for time for producing 5000 books 3721 his 15 mins ! producing 5000 books $51,312.5 Cost of producing are book 51,313 $11.46 5000 15% of time ist of cost 3721 has x 15-1..559.05 W. 51,313 x 15- : $8,599 Since 1st of time comes around 559 hans, Kay has to work seriously on creating color proofs and rescan and correct profs which constitutes most of the time However, to reduce 1st of cost, she has to work and negog, negotiate on other copts.