Write a professional memo to upper management from your own perspective as Marcus, the cost accountant.  Explain your costing results and propose your ideas on how to move forward based on your costing results. (Information below)

Background: Marcus, the cost accountant for Hi-Power Mower Company, recently installed activity-based costing at Hi-Power’s St. Louis lawn tractor (riding mower) plant where three models, - the 8- horsepower Bladerunner, the 12-horsepower Quickcut, and the 18-horsepower Supercut – are manufactured. Marcus’s new product costs for those three models show that the company’s traditional costing system had been significantly under-costing the 18-horsepower Supercut. This was due primarily to the lower sales volume of the Supercut compared to the Bladerunner and the Quickcut. Before completing his analysis and reporting these results to upper management, Marcus is approached by his friend Ray, who is the production manager for the 18-horsepower Supercut model. Ray has heard from one of Marcus’s staff about the new product costs and is upset and worried about his job because the new costs show Supercut to be losing, rather than making money. At First, Ray condemns the new cost system, whereupon Marcus explains the practice of activity-based costing and why it is more accurate than the company’s present system. Even more worried now, Ray begs Marcus, “Massage the figures just enough to save the line from being discontinued. You don’t want me to lose my job, do you? Anyway, nobody will know.” Marcus holds firm but considers recalculating all his calculations before submitting his costs to management. Should he calculate for accuracy or help his friend out

Answer rating: 100% (QA)

To Upper Management From Marcus Cost Accountant Subject ActivityBased Costing Results and Proposal for Moving Forward Dear Upper Management I am writi... View the full answer