Examine a range of topics relating to the following learning outcomes:

1 - Apply appropriate decision-making approaches and techniques to business situations

2 - Evaluate operational priorities using managerial accounting principles and practices, including budgeting

Case study 1:

Required:

Write a memo to Frankie Costello providing a brief description of what is activity based costing as well as an explanation of how the traditional approach can result in distortions.

Case study 2:

Required:

Draft a response from Curtis to Ed Gray.

Case study 3:

Required:

(A) Prepare a budget report for the month of July 2014, comparing actual results with budget data based on the flexible budget. Were costs effectively controlled? Explain.

(B) Prepare the flexible budget graph showing total budgeted costs assuming monthly production levels range from 25,000 to 30,000 direct labour hours (use increments of 2,500 direct labour hours).