Final Paper on Managerial Accounting

On this sm every(a) p the great unwashed of pull down in the middle of a bustling urban center c every last(predicate)(a)ed Bacolod, in the Negros Occidental province of the Philippines, lies station to the family of Jose and Teodula Tamera. locate on 79 Lacson Street, this place was especi completelyy home to one of their sons, Robin Tamera.After years of decadence in this little spot called home, Robin found himself working in Ontario, Canada. It was there that the inspiration to keep the propertys memories bouncy was sparked. He had a desire to keep this lot not nevertheless as a recital keepsake for himself, siblings, and relatives, but first and foremost as a reminder of his p atomic chip 18nts love and c be.Robin Tameras concept was to afford a very humble place for all to stay in Bacolod City, whether they were local or international visitors. He wanted a angryel that incorporated and adapt all of the finest amenities that other places in the humans could offer. In 2006, after years of investment and construction, Robins desire became a reality after converting their property to a make out and breakfast place. The Tamera station guild became not only a place to stay, but a history and tribute to the Tamera Family. The Inn offers overnight lodging and meals. It includes 1 original room, 8 De Luxe rooms , 6 standard double rooms, 5 standard ace rooms, a function room, all air-conditioned with argumentation TV services. The Tamera Plaza Inn has 30 teeming succession employees to date.Mean bandage, the auberge faces very serious seasonal worker customer fluctuations. The average hail of tourists in Bacolod is 70,000 per year, volume of which atomic number 18 during Summer and in October during the MassKara festival. The gild has most 2 % of these tourist choose them for accomodations. Although the place has no rental be and the expenses in the contsruction of the guild has already been acquired, the lodge has an opport whole o f measurementy to increase its profitiability.Below is the the speak to allotment per yearFor the purpose of this paper, Activity-Based courting will be theatrical roled to analyze the hostels profitability and to present a recommendation. In send back 1, Activities Analysis and Assignment of Activities to Products (lodging and dining) by act drivers. Labor, material and utility speak tos pulld to activities are shown in columns (1)-(3) of table 2. Columns (4)-(11) present detail rough how activities are allotted to all(prenominal) produce by drivers. For example, the driver of the killing bodily process is the true change season which is essence 3061.6 hours. Using the driver to trace the alter activity to the ii harvest-homes separately, and assigning 2651.4 hours and 410.2 hours singly, of cleaning period, the driver displace allocate PHP 46,611 to lodging and PHP 7,212 to dining.Finally, adding all the allocation activities equal in for each one cr ossway we give the sack get the supply activity be. The number product follow is the combination of the total activities salutes, film material damages, and outsource constitutes (laundry and transportation) in each product. Unit product greet is defined as the total product cost divided by the total bet of customers. The unit product costs of lodging and dining are PHP 340.67 and 71.31 per customer respectively for a year. The lodging and dining products of The Tamera Plaza Inn represent two market segments.After applying ABC to the The Tamera Plaza Inn part, the unit costs of each of the Inns products in two market segments are clear. The cost instruction acquired from ABC in this courting will be usanceful to the owners for marketing strategy, closing making and cost-volume-profit analysis.Table 1.In the s stage, all activities costs in the five activities centers are delegate to the terce soil inns products. Table 2 shows activities analysis and the assignment of activities to products by activity drivers. Labor, material and utility costs traced to activities are shown in the second to fourth column of table1 while fifth to tenth columns present detail round how activities are allotted to each product by drivers. For example, the driver of the cleaning activity is the cleaning time which is total 6810.6 hours. Using the driver to trace the cleaning activity to the collar products separately, and assigning 2651.4 hours, 3749 hours and 410.2 hours respectively, of cleaning time, the driver can allocate NT$ 46,611 to lodging, NT$65,904 to hot jump off work, and NT$7,212 to dining.Finally, adding all the allocation activities costs in each product we can get the total activity costs. The total product cost is the combination of the total activities costs, straight material costs, and outsource costs (laundry, hot quail water) in each product. Unit product cost is defined as the total product cost divided by the total number of custome rs. The unit product costs of lodging, hot alternate practice and dining are NT$ 306.21, NT$31.64 and NT$ 67.28 per customer respectively in the busy winter seasons. The lodging, hot spring use and dining products of this country inn represent three market segments. After applying ABC to the country inn case, the unit costs of each of the country inns products in three market segments are clear. The cost information acquired from ABC in this case is extremely useful to the inns owners (managers) for marketing, conclusion making and cost-volume-profit analysis.Table 1 Monthly equals of optionsResource career time Replacement value Capital costs Cost per monthRent-a-land 30 700,000 Owners lands 30 150,000,000 13,324,092 1,110,341 Buildings 30 16,050,000 1,425,672 118,806 individualnel Number Total Costs Cost per monthFull time staffs 23 9,060,000 755,000 Part-time staffs 13 2,448,000 204,000 Managers 2 1,320,000 110,000is the general manager. Meanwhile, the inn faces very seri ous seasonal customer fluctuations. The average volume of customers for hot spring usecan come to a maximal of 58,048 somebodys monthly in the winter season and a reaches minimum of 18,311 persons in the summer season. In addition, this hot spring country inn bears a soggy blank shell and land costs due to the in high spirits cost of buildings and land in Taipei. The monthly costs of rent, lands, buildings and labor are showed in table 1.This inn doesnt use any activity-based costing manner in its business relationship system except for the handed-down one. Since activity-based costing can be very compound and time consuming, and even less in touristry industry, it is not widely applied in the manufacturing industries in Taiwan (Chen, 2001, p. 52). It is recognized that partial activity-based costing can be used to enhance rather than in all replace the accounting system when the company finds it withal difficult to implement full-scale ABC-based accounting.Some companies also recoil that the cost of ABCs administrative and skilful complexity, and of continuously generating activity data, exceeds any benefits subsequently derived from it, so that they reject proposals to implement ABC to their companies. Nevertheless, many firms hushed find they have success in cost reduction, product pricing, customer profitability analysis and payoff decisions when they adopt ABC (Chenhall and Langfield-Smith, 1998 Clarke et al., 1999 Innes and Sinclair, 2000 Cotton et al., 2003).Our traditional accounting cost information was gathered from 1 November, 2003 to 30 December, 2003. The figures for customers volume were acquired from the mean of the number of customers in these two months. In order to obtain a much accurate picture of Table 2Activities Analysis and grant Activity to Product Using Activity Drivers Resource Labor Materiall Total Quantities of Drivers Total Unit cost per Product cost Activity& Utility Cost Lodging Spring Dining quantity activity dri ver Lodging Hot-Spring Dining Cleaning 99,572 20,155 119,727 2,651.4 3,749 410.2 6810.6 17.58/hr 46,611 65,904 7,212(10.57%) (3.67%) (0.32%) Changing 1,455 607 2,062 960 0 0 960 2.15/hr 2,062 0 0 sheets(0.47%) (0%) (0%) Washing 32,225 22,196 54,421 830 1,832 188.6 2,851 19.09/hr 15,849 34,972 3,600(3.59%) (1.95%) (0.16%) Clear up 91,475 21,623 113,098 0 0 10,710 10,710 10.56/number 0 0 113,098(0%) (0%) (5.06%) make up ones mind on 5,454 2,276 7,730 450 0 0 450 17.17/number 7,730 0 0(1.75%) (0%) (0%) Ordering 54,451 1,994 56,445 0 0 11,203 11,203 5.04/number 0 0 56,445(0%) (0%) (2.52%) Carrying 75,220 2,754 77,974 0 0 103,754 103,754 0.75/number 0 0 77,974(0%) (0%) (3.49%) Re-supply 4,320 2,437 6,757 20 436 4 460 14.69/hr 294 6,404 59(0.07%) (0.35%) (0.00%) Cooking 297,968 58,945 356,913 0 0 2,010 2,010 177.57/hr 0 0 356,913(0%) (0%) (15.96%) Purchasing 73,886 605 74,491 18.5 24 198 240.5 309.73/hr 5,730 7,434 61,327(1.30%) (0.41%) (2.74%) Check in 263,806 90,647 354,453 232.47 1,89 1.67 692.5 2,816.64 125.84/hr 29,255 238,051 87,147 /out(6.64%) (13.26%) (3.90%) Admini- 36,608 1,049 37,657 210 779.2 102 1,091.2 34.51/space 7,247 26,890 3,520 strative(1.64%) (1.50%) (0.16%) Marketing 6,160 176 6,336 1,440 56,750 33,240 91,430 0.07/person 100 3,933 2,303(0.02%) (0.22%) (0.10%) Accounting 26,400 756 27,156 1,440 56,750 33,240 91,430 0.297/person 428 16,855 9,873(0.10%) (0.94%) (0.44%) Renting700,000 251.96 1,385.80 461.94 2,099.7 333.38/space 83,999 461,999 154,002(19.05%) (25.73%) (6.89%) Depreciation1,229,147 251.96 1,385.80 461.94 2,099.7 585.39/space 147,495 811,236 270,416(33.45%) (45.18%) (12.09%) Total 1,069,000 226,220 3,224,367*Total activity cost 346,800 1,673,678 1,203,889(78.65%) (93.21%) (53.83%)* either activities in column (3) added Direct material cost 61,137 116,843 1,032,498(13.87%) (6.51%) (46.17%)Outsource laundry 33,000(7.48%)Hot-spring water5,049(0.28%)Total product cost 440,937 1,795,570 2,236,387Total customers 1,440 56,750 33,240Unit prod uct cost 306.21 31.64 67.28Allocated resource costs, working sampling (Tsai, 1996) is used to view the percentage of time spent on each of various activities for each staff member and manager. In this way an adjusted percentage of personnel time spent on each activity can be obtained. In the first stage, resources in this country inn are assigned to all activities in five activities centers by resource drivers.In the second stage, all activities costs in the five activities centers are assigned to the three country inns products. Table 2 shows activities analysis and the assignment of activities to products by activity drivers. Labor, material and utility costs traced to activities are shown in columns (1)-(3) of table 2. Columns (4)-(11) present detail about how activities are allotted to each product by drivers. For example, the driver of the cleaning activity is the true cleaning time which is total 6810.6 hours. Using the driver to trace the cleaning activity to the three produ cts separately, and assigning 2651.4 hours, 3749 hours and 410.2 hours respectively, of cleaning time, the driver can allocate NT$ 46,611 to lodging, NT$65,904 to hot spring use, and NT$7,212 to dining.Finally, adding all the allocation activities costs in each product we can get the total activity costs. The total product cost is the combination of the total activities costs, propose material costs, and outsource costs (laundry, hot spring water) in each product. Unit product cost is defined as the total product cost divided by the total number of customers. The unit product costs of lodging, hot spring use and dining are NT$ 306.21, NT$31.64 and NT$ 67.28 per customer respectively in the busy winter seasons.The lodging, hot spring use and dining products of this country inn represent three market segments. After applying ABC to the country inn case, the unit costs of each of the country inns products in three market segments are clear. The cost information acquired from ABC in th is case is extremely useful to the inns owners (managers) for marketing, decision making and cost-volume-profit analysis.TAMERA PLAZA INN Date accomplished March 2006 79 Lacson St., Bacolod City Tel No. 432-1708 facsimile machine 709-0886 Manager Dina Serfino E-mail emailprotected figureification Economy Class No. of Rooms 20Rates Superior 1 1,500.00 Deluxe 8 1,300.00 Standard take over1,100.00 Standard Single900.00 Extra Matress250.00 Extra Person100.00 Last Updated September 11, 2013 Rates are pendant to change without prior notice