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Paper Topic:


Section B

1 . The Managing Director of Bird Garden Products wanted to figure out why the financial reports were not showing improved profits for their toucan line despite the expanding volume of sales in both their toucan and parrot lines . He wanted the trace the reason for this so that proper measures can be undertaken . As Managing Director of the company he would want their operations to focus on profitable products but he needed accurate financial reports as basis for any final decision that he would make . While increased sales almost always

accompany increased profits , the lack of such expected increase in the profits coming from the toucan line was rather unexpected and abnormal . Given the circumstances , the Managing Director considered the use of a different costing approach - one that hopefully would give him more accurate figures and would more clearly detail the specific costs charged to specific products of their company

Among the prevailing realities in the operations of most companies are as follow : a ) increased sales do not necessarily tantamount to increased profits b ) products can be either money-makers or money-losers c ) there are more money-losers to avoid than there are money-makers to go for and , d ) there is no way to concretely establish where in the company 's operations is money made and where it is lost (University of Pittsburg 2008 . These are the same realities that the Managing Director of Bird Garden Products was dealing with

Thus , a new system is needed to determine the true...

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