Question

Detailed Instructions:
In a business setting, we are often asked to write a memo to communicate with internal and external professionals. This assignment further advances your communications within an organization through the use of a memo.

Background:

As the senior accountant at Technology on Demand (TOD), which manufactures flip phones, smartphones, notebooks, and smartwatches, you are responsible for assisting with employee related questions.

TOD manufactures mobile technology such as flip phones, smartphones, notebooks, and smartwatches in bulk quantity on the same type of product with no variations. However, Michael Clark, sales department manager, is considering taking special orders in an effort to further advance sales. If this is possible, he would like to begin with the smartphones as a pilot project. The smartphones itself would remain the same; however, the client would have the option of customizing certain features such as technology options and potentially other add on features, which may call for another department within the production department.

Michael has asked you:

• Can you explain if it is possible for production and accounting to manage the smartphone pilot project? What type of costing system would this be called? Explain the process.
• What would the difference in the costing system be, if any, from what it is now?
• What additional documentation would be needed for the custom work?
• Would you have any thoughts or concerns on this type of change in processing?

In consideration of the background, prepare a memo in a Word document to submit to the sales department manager, Michael Clark, with a cc to the controller.

Answer 1

P. No. According to data :- The given information about the Seniël accountant at Technology on Demand ToD), which manufactures flip phones, Smartphones, notebooks ..... Da) yes. It is possible for sales department along with the Account Department to manage the youth pilot project with the help of Budgeting the manufacturing of youth pilot project. b) At the hand of such an implementation of Production Budger process is an estimate of units to be produced and is based on sales plus an estimate & desised quantity of finished goods at the end of a particular period particular period (in, weeks months la year) Here, in this Scenario & Top, the Prepation of production budget will be followed by development of projection of sales to be made in units by Michael clock. sales projections

R.2 further to eniliate Budget for the Special endous of youth allire, he will be estimating three aspects it, Number of additional units to be manufactured, Paw materials required for the Same. Additional Disrect labal and overheads. ) Each of the them are essentially required to Prepare a estimate al a budget. 2 * A Job Costing system is often mole expensive to maintain than a basic proces Costing System, Since there is a cost associated with assigning the individual material and label to the product. * Thus, a Job Costing System is used for Custom jobs when it is easy to determine the cost of materials and labol used for each Job. A poocen Costing System is often les expensive to maintain and welles best when items are identical and of in difficult to trace the excict Cost cel materials and labol to the final product.

P.3 * Initially A TOD", we assume there will be Practise of process Costing where by the manufactuning of flip phones, Smartphones, notebooks and Smartwatches will be in large qualities being identical units with the only difference in. Size, ete. However, after taking up the Special onders for the clients for youth attire the procey System of additional customised orders will shift to Job Costing proces 3) the additional Document to be required for the Custom Designed youth Attire :- a. Number of additional unite to be manufactare. b). list of lettere to be printed on each of attire. c). Print designs d. Cost estimate of the Special orders of of youth Attire Yourth Attire.

P.4 P.y a 2 Process Casting and job order Corting are both acceptable methods for tracking costs and Production levels. Some Companies une Single method, while some Companies use both which creates a hybrid Costing System * The System a Company use depends on the nature of the product the Company manufactures. * Here in TOD, Since there is a change of upgrade in the manufacturing of Sportwear, they can continue with hybrid Corting System depending upon the sales Target achived by : the sales manager. , pleare, vote position pesstively.