ACCFIN1006- Introduction to Management Accounting and Control - University of Glasgow, UK

Case Study - Sea Dot

After reading the case, write a 2000 words report addressing the questions below. Organise your report around the three main questions. Use sub-questions as guidelines for elaborating your answers.

Questions:

1. Establishing the accounting facts and the behavioural context:

1. Introduce the case context

2. Describe the problem Jennifer is facing in light of agency theory.

3. How much cost should be charged to the two recently started projects, if S1 is to:

i. Break even?

ii. Earn a normal level of profit?

4. What would be the impact on Jennifer Smith' compensation (and possible effect on her performance review) of these allocations?

2. Review of impact on other stakeholders

1. Who are the stakeholders in this decision?

2. What are their rights and expectations?

3. What is Jennifer's obligation to each?

3. Making-decision

1. Jennifer Smith has to decide between several cost allocation options. Compare them and choose one cost allocation providing arguments Jennifer can use for supporting her final decision.

2. What is the role of the cost accounting system in determining Jennifer's decision?

Attachment:- Sea Dot Case Study.rar