Creative Consumer Consultants Case   Term Paper ID:42524 Click to get this paper

Essay Subject: THE AGE OF THE SOURCES AND THEIR IRRELEVANCE WERE INDICATED IN THE CASE WRITE-UP.... More...

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Paper Introduction: Creative consumer consultants lTD divisional reporting Introduction This case involves the allocation of consulting and other overheadcosts to divisional offices within the organizational structure of a profit-oriented organization as opposed to a not-for-profit-organization NPO The use of three specific sources as references is a requirement for thiscase All of these references are years old One of the referencearticles Capin and Tanenbaum deals exclusively with costallocations for NPOs Thus in theory this reference has no directrelevance to this case As its use is Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Conclusion The comparison of the two income statements indicates that therevision in allocations resulted in higher net income for three offices(New York, Chicago, and Little Rock). Analysis This case specifically concerns the allocation among the divisionaloffices of the company of non-traceable costs involving activities that areassumed by the company to be common to all four divisional offices.Existing company policy is to allocate non-traceable costs based on totalbillings (revenue). As its use is directed, however, elements of thearticle were applied to this case. Another of the reference articles,Kapoor (1998), deals with transfer pricing amount the divisions of a singleorganization. CMA Magazine, 72(2), 23-26.Lynch, M. Journal of Accountancy, 186(2), 37-44.Kapoor, M. Creative consumer consultants lTD.: divisional reporting Introduction This case involves the allocation of consulting and other overheadcosts to divisional offices within the organizational structure of a profit-oriented organization, as opposed to a not-for-profit-organization (NPO).The use of three specific sources as references is a requirement for thiscase. 124). The cost allocations in this case doe not involve transferpricing. ReferencesCapin, B., & Tanenbaum, J. Kapoor (1998), however, was considering transfercosts, which are not involved in this case. (1998, August). The information presented by Kapoor (1998)justify allocation protocols by organizations that differentiate thetreatment of common costs that may have a direct bearing on the activitiesof divisional elements and common costs that may not bear directly on suchactivities. Dueling divisions. The audience in this case isassumed to be the divisional office managers. R. 42). Second, theapplication must provide satisfaction for the "audience" of the financialreport (Capin & Tanenbaum, 1998, p. The revised income statement provides greater goal congruencefor two reasons. This approach resulted in the income statement that ispresented below.[pic] Applying the information presented by Lynch (1998) allows theallocation of costs to elements of an organization that benefit from thoseexpenditures when such expenditures do not have "in substance, anindependent existence" (p. All of these references are 1 years old. Thus, in theory this reference has no directrelevance to this case. 124). As its use is directed, however, elements of the article wereapplied to this case. (1998, December). Journal of Accountancy, 186(6), 124. First, the allocation must reflect justifiablebenefits for the units to which costs are allocated. Again, in theory this reference has no directrelevance to this case. This approach according to Kapoor (1998) "motivates divisionalmanagers to act not just in their own interests but in those of thecorporation" (p. Second, the unprofitability of the officebecomes clearer. One of the referencearticles, Capin and Tanenbaum (1998), deals exclusively with costallocations for NPOs. This approach would better reflect the actualbenefits accruing to the divisional offices. The third referenced article, Lynch (1998), concernsthe extension by the "Tax Court" of an "allocation principle" applicable toresidential real estate development to "commercial residential estatedevelopments" (p. The information presented byCapin and Tanenbaum (1998) also deals with the allocation of common costs.This information requires that the basis for the allocation of such costsinclude two elements. The allocations for non-traceable other costs, asindicated above, were based on the proportional traceable other costs.These proportions were 3 % (New York), 2 % (Chicago), 5 % (Paris), and %(Little Rock). A lower net income results for theParis office. Line items. Theseproportions were 41.79% (New York), 17.91% (Chicago), 37.31% (Paris), and2.99% (Little Rock). Thus, in theory this reference also has no direct relevance tothis case. (1998, March). For the case at hand, a preferred approach for the allocation of non-traceable costs would be to base such allocation on the proportions oftraceable common costs. How to report a joint activity. The information provided byCapin and Tanenbaum (1998) also require consistence in applicationpractices. 25). First, a better assessment of the potential of the LittleRock office is identified. This approach would result inthe income statement that is presented below.[pic] The allocations for non-traceable consulting costs, as indicatedabove, were based on the proportional traceable consulting costs. As its use is directed, however, elements of thearticle were applied to this case. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.