1. WESTMOUNT RETIREMENT RESIDENCE
New Costing System and Pricing recommendation
Executive Summary of my Conclusions:
The administrator of the Westmount Retirement Residence is concerned about the current cost accounting system.
The administrator is not clear on how much each service offered was truly costing, and therefore charged each
resident the same price per month regardless of their needs. In the past, the majority of patients demanded similar
services, and therefore this pricing and costing system was appropriate. However, with demographic changes to the
population, some residents required intense medical care, while others were healthy and fit and required less care. A
new pricing model had to be developed that reflected both the size of suite inhabited and the level of medical care
and service required by each individual patient.
Present System:
The Westmount Retirement Residence (WRR) is calculating the cost per resident by dividing the total costs by
number of residents. This number is then multiplied by inflation of 5 to 8 percent to bring the estimated costs for the
coming year. This is the base cost for Studio apartments, and then the cost for the one bed room and two bed rooms
are calculatedby adding 25 % and 50% on the base cost. So there was no system to calculate the varying service need required
by different residents.
The net profit in year 2005 is 2.28%, very low net profit looking at the markets of the same industries. (See Exhibit 1)
Recommended System:
In the present system, all costs are considered as “fixed costs”. I feel, the costing can be done on activity based costing (ABC)
(Eddie McLaney, Peter Atrill, 2010::400) (here in this case it is service based, need based). for Support services. Food services,
Laundry service can be done by direct costing (variable costing) depends on the consumption of the resident, but this may take
again a lot of expenditure to maintains individual costing and billing. Activity- based pricing (ABP) is a pricing
method that combines market research data with cost accounting information to establish
prices for products and services that result in designed profits .(internet resources)
Recommendation 1:
The net profit must be at least 15% as net profits in the hospitality or caretaking...
The ABC costing method has found a warm reception within the healthcare industry (Canby,
1995). It is reasonable to suspect that part of its popularity in this industry is due to the fact that
certain costs of treatments are incredibly high as well as the number of treatments that are
available. Since the ABC method is more apt to associate the correct costs to the processes that
utilize them then it allows for more accurate billing to the clients. For example, an x-ray process
can be broken down into four primary cost drivers, administrative check-in, patient exposure,

2. patient return, and film processing, which can be accounted for and billed based on usage for
each separate process
ABC Costing at Westmount
The current costing arrangement at Westmount depended completely on the square footage of
the residents unit. Thus it is reasonable to anticipate that all stakeholders would benefit from
the application of the activity based costing system; except of course those residents who
required the most services. The costs were identified to fall into six categories:
1. Food Services
2. Support Services
3. Laundry
4. Recreation
5. Facility
6. Housekeeping
Previously, each of these costs was allocated overhead by a
CLASSIC PEN COMPANY
Classic Pens Limited is one of a number of new pen companies was founded in 1987 by Andreas Lambrou and Keith
G. Brown and is best known in the pen community for creating a series of sterling silver guilloché engraved limited
edition fountain pens based on classic models by different first line pen manufacturers. Andreas Lambrou is probably
best known for his huge, wonderful pen-tome, Fountain Pens of the World, a comprehensive and well illustrated
history of fountain pens by region, country and manufacturer, published by Classic Pens in 1995. [?]
The Classic Pens CP4 was introduced as part of a matched set of 1,865 pens in each of the two designs, the
Washington and the Richmond, and is based on the sterling silver Sheaffer Legacy. The Legacy was introduced in
1995 and draws heavily on the design of the 1959-1968 landmark Sheaffer PFM, or Pen for Men. The pen has the
same profile and nib as the PFM, but is an all-metal base, rather than the all-plastic or plastic barrel and metal cap
PFM, and is heavier as a result. The Legacy uses a unique cartridge / converter system that incorporates a removable
Touchdown unit, instead of a Snorkel system, as in the PFM. Interestingly, with the two CP4 pens, there are four
Legacy sterling silver pens: the original Legacy, with its linear dashed line engraved pattern, and a relatively rare
"plain" version, which was not intended as a regular model, but is essentially the "blank" for the other three pens. A
complete Legacy sterling collection would need all four pens. 2
Classic Pen Company, originally producing only black and blue pens, decided to expand its product line by
introducing new colors to the market. Based on the traditional financial...

3. OLD MULES FARM CASE
CASE
Old Mule Farms
by David Currie, Lorena Mosnja Skare
Source: Richard Ivey School of Business Foundation
7 pages. Publication date: May 03, 2010. Prod. #: 910B04-PDF-ENG
The owner of a cow-calf operation must determine the appropriate weight for cows in the herd. The national trend for
decades has been for cow weights to increase because they produce larger calves, but evidence indicates that cow
weights may have reached the point where the cost of maintaining a larger cow has become greater than the return
from producing a larger calf. Analyzing this issue introduces marginal principles from economics. The case can be
extended to a discussion of drivers and allocation of expenses, which are managerial accounting principles. The case
is appropriate for a managerial cost accounting course and for managerial or microeconomics courses. The case
uses concepts such as direct costs, cost drivers, allocation and marginal analysis to examine the issue of appropriate
cow weight. The case introduces or provides training in these concepts: marginal analysis; determining cost drivers;
cost allocation; modeling and spreadsheet preparation.
COST ALLOCATION
TRADE OFF ANALYSIS
Management Accounting Case
Alternative:
One alternative Old Mule Farms can choose is doing nothing, and just remain what they did in the past. Right now
Old Mule Farms tried to minimize their expense. They sold some of their land to generate funds to cover operating
cost; they rented pasturage to feed their cows; they basically focused on feeding heavier cows in order to get heavier
calves, and then can generate more revenue. They also provide dietary supplements and minerals to maintain calves’
health and productivity. Old Mule Farm provided enough nutrients to cows and calves in order to produce more
healthy products; it can help to improve company reputation. Variety beef products are the final goods in this
industry; and nowadays more and more people concern how healthy their food is; therefore the quality of calves is
very important. If we provide healthy calves, it can improve our company brand name; in the meanwhile it can attract
more consumers. Also, they focus on producing heavier cows to
produce heavier calves, and then can generate more money in a fast way. Moreover, the calves price is increasing
during 2009-2010, and the average calves prices received by farmers in 2010 is 127.75 ($/cwt)1. Assume other
conditions remain unchanged, after doing the breakeven analysis, we can find the breakeven point is 42 (appendix
1c); or if all conditions are same, they will have $2325 profit. Breakeven point is the point at which revenues equal
total costs and profit is zero. By doing this analysis, we can know how many calves we need to sell in this year in order
to be profitable or at least not in a business loss position. According to Ex.1, and Appendix 1(a), we know that in 2008,
Old Mule Farms breakeven point is 74 which mean they should at least sell 74 calves to balance their revenue and
cost. Right now they only have 50 cows so only can produce 50 calves; they need 24 more cows to be profitable. Under
current conditions, they can’t support any more cows.
1...

4. Gg Toys Case
Gg Toys Case St
G.G.Toys
Thedecline margins our popular in on Gtoftry doIIproduct become has intolerable. production Increasing
haae costs dropped pretaxmarginto less our than10%, below historical our 257omargins, wearegoing If
far to increase margins, need consider our we to drastically shiftingour production towards sfecialtydolts
aie that earning large prnniumin priceoaer standard line. a our doll -Robert Parker,President, G.G.Toys
Background
Robert Parker, president of G.G. Toys, was discussing last month's operating results with Audrey
Hausner, G.G.'s conkoller, and David Morehouse, G.G.'s manufacturing manager. The meeting was
taking place in an atmosphere tinged with apprehension because margins on thelr most popular product,
the "Geoffrey doll," had been declining rapidly in the last few years due to rising production costs
(summary operating results for the previous month, March 2000, arc shown in Exhibits 1 and 2). Parker
saw no choice but to shift the company's product mix towards
specialty dolls that carried a high price premium, and thus, a 34% margin. G.G. Toys was a leading
supplier of high-quality dolls to retail toy stores throughout the U.S, The comPany had started with a
unique design for molding highly durable dolls using vinyl and resin materials. G.G. quickly established a
loyal customer base among retailers because of the high quality and popularity of its manufactured dolls.
It soon established a major presence in the market with its high-volume Geoffrey doll product line. The
company operated two separate plants. The Chicago plant was used for the production of various dolls.
The Springfield plant was used solely to assemble doll cradles to complement the company's dolls. The
Geoffrey doll was designed to be a replica of an infant boy or girl clothed in a simple pajama outfit with
movable acrylic eyelids and jointed, movable arms and legs. Boy and girl versions of the doll were
produced to almost identical specifications with minor...
Gg Toys Case St
G.G.Toys
Thedecline margins our popular in on Gtoftry doIIproduct become has intolerable. production Increasing haae costs
dropped pretaxmarginto less our than10%, below historical our 257omargins, wearegoing If far to increase margins,
need consider our we to drastically shiftingour production towards sfecialtydolts aie that earning large prnniumin
priceoaer standard line. a our doll -Robert Parker,President, G.G.Toys
Background
Robert Parker, president of G.G. Toys, was discussing last month's operating results with Audrey Hausner, G.G.'s
conkoller, and David Morehouse, G.G.'s manufacturing manager. The meeting was taking place in an atmosphere
tinged with apprehension because margins on thelr most popular product, the "Geoffrey doll," had been declining
rapidly in the last few years due to rising production costs (summary operating results for the previous month, March
2000, arc shown in Exhibits 1 and 2). Parker saw no choice but to shift the company's product mix towards specialty

5. dolls that carried a high price premium, and thus, a 34% margin. G.G. Toys was a leading supplier of high-quality
dolls to retail toy stores throughout the U.S, The comPany had started with a unique design for molding highly
durable dolls using vinyl and resin materials. G.G. quickly established a loyal customer base among retailers because
of the high quality and popularity of its manufactured dolls. It soon established a major presence in the market with
its high-volume Geoffrey doll product line. The company operated two separate plants. The Chicago plant was used
for the production of various dolls. The Springfield plant was used solely to assemble doll cradles to complement the
company's dolls. The Geoffrey doll was designed to be a replica of an infant boy or girl clothed in a simple pajama
outfit with movable acrylic eyelids and jointed, movable arms and legs. Boy and girl versions of the doll were
produced to almost identical specifications with minor differences in the...