ACCT3104 Management Accounting

Semester 1, 2018

Case Study Team Assignment

Dynamic Medical Solutions

(Weight: 20% of Final Grade)

Due Date for Submission: 11:59 pm on Sunday 13th May, 2018

This document has the following parts:

 Administration;
 Case Study Requirements;
 Questions to be Considered in the Case;
 Marking Rubric; and
 Appendix Tables.

ADMINISTRATION

Case studies aim to provide you with an opportunity to develop your skills in the case study
method and to develop your skills to work collaboratively with your group.

The purpose of this case study is for you to develop an understanding of (i) the
organisation that the case is centred on and the broader context (industry, economy etc.) in
which it operates; (ii) the problems and issues that the organisation faces; (iii) how to
analyse the problem and issues through the application of the concepts and theories learned
in ACCT3104 to the case facts; and (iv) to encourage you to provide reasoned
recommendations for how you might address the problems and issues you have found.

For the purpose of team formation on the Case Study, it is compulsory that you form a
team of either THREE or FOUR students to work together on the assigned case study.
Please note that you will NOT be permitted to submit the case study individually or in teams
of two. A key learning outcome of the case is for students to demonstrate appropriate and
professional collaborative skills in a team setting. If a student submits the case individually or
in a group of two they will receive zero marks.

It is the student’s responsibility to form a team. If you have difficulty in finding a team
please use the Blackboard ‘Discussion Board’ to advertise your availability to join a team. If
you continue to have difficulty after having first used the Discussion Board, please direct a
message to the Associate Lecturer Ms June Jung (j.jung@business.uq.edu.au). In this
instance any students not in a team may be allocated to teams of these same students

ACCT3104 Case Studies Page 1

accordingly. You should have formed a team BEFORE the case is made available on
Blackboard.

AFTER the submission of your case, you will also be required to access a link on
Blackboard to provide a peer review of the contributions of your other team members. This
link will be open from 12:00am Monday 14th of May to 11:59pm Sunday 20th of
May. Again because of the learning objectives of the case, if a student does not complete
the peer review during this time they will receive zero marks for the case.

Furthermore, if the peer review reveals that a team member or team members have not
contributed effectively to completion of the case, a lower mark may be given to some team
member(s). In addition, the team may be asked to provide additional information regarding
the team member's contributions.

How to register your Case Study Team:

The following instructions must be followed by students to form groups for the Case Study
Assignment:

1. Go to the 'Assessment' tab, then click on 'Case Study Assignment', then click on
'Team Case Study Sign-On'.

2. If you are the first member of the team to sign-on, look for the first group that has
no members added and click on "Sign up" (it does not matter what the team number
is, but please take note of the number as this will be your team number). This will add
your name on that team.

3. After the first member of a team has signed-up, the other members of the team
then have to find the relevant team number and do the same from his/her own
Blackboard site and sign-on. We recommend that once you have your team
organised, that you sign-on and all join simultaneously, to avoid problems.

4. Once are you signed on in one team please note that you cannot delete or
change the names of the members in that team. It is therefore very important that
you take care in forming and signing-on to a team. We will only allow changes if there
are extenuating circumstances (e.g., a team member drops the course). If this occurs
you will need to send an email explaining your reasons to the Associate Lecturer Ms
June Jung (j.jung@business.uq.edu.au). We would not expect changes based on
team disagreements, as this is part of managing your ability to work in a team.

5. Once you form a team it is important that you exchange contact details (email and
telephone numbers) with the other members of your team when you signed on in the
system.

Submission Requirements:

Each student needs to complete in their team the Dynamic Medical Solutions case study
following the Case Requirements and submit by the due date and time following the
submission requirements outlined below.

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 1. The Case Study Assignment is to be submitted through Blackboard following the
Assessment link.
2. Only one member of each group must submit the case selecting his/her name from
the list of “authors” by 11:59 pm Sunday 13th May 2018. Your “submission title” and
your file name must be “ACCT3104 Team (number)” (e.g. ACCT3104 Team 14).
Each team member’s name and student number MUST appear on the top right
corner of the first page header. You should submit a pdf of your case study. (You
should use size 8pt font for this header).
3. You are required to submit a report of three to four typed pages (11pt Arial font
with 1.5 line spacing, normal MSWord margins) that will contain the four sections.
4. You can also use one additional page to provide tables of calculations, graphs or
other diagrams as appropriate to the case. This additional page IS NOT for
continuing your discussion of the four sections of the case you are required to
submit.
5. You are further required to complete the Appendix Tables that appear later in
this document. These are to be included in your submission as an Appendix.
These tables do not count to the three to four page limit mentioned. Note that these
tables will be marked as right of wrong, no consequential marking.
6. Any answers provided beyond the page limit (i.e., 3-4 page report + 1 additional page
+ Appendix) will NOT be marked.
7. Where a submission has not adhered to the page limits, font size, spacing, and/or
margin guidelines as stipulated, there will be an adjustment to the team’s mark at the
course coordinator’s discretion on a case-by-case basis.
8. Regarding the case questions provided, you should answer the questions, where
possible, as a cohesive part of your submission. These questions are designed to
prompt your thinking and analysis; therefore your responses should be blended into
the sections as part of your statements, arguments or recommendations.
Recommendations have been provided in the ‘Case Study Requirements’ regarding
where in each of the case sections the questions should be integrated.
9. Your assignment must reflect your own understanding of the case. Copied or
plagiarised work will not be tolerated (students should refer to the University
policy on plagiarism).
10. No hard copy submission is required.

Grading:
Students are provided with a grading rubric later in this document.

Academic Integrity
It is the University's task to encourage ethical scholarship and to inform students and
staff about the institutional standards of academic behaviour expected of them in
learning, teaching and research. Students have a responsibility to maintain the
highest standards of academic integrity in their work. Students must not cheat in
examinations or other forms of assessment and must ensure they do not plagiarise.

Plagiarism
The University has adopted the following definition of plagiarism:
Plagiarism is the act of misrepresenting as one's own original work the ideas, interpretations,
words or creative works of another. These include published and unpublished documents,
designs, music, sounds, images, photographs, computer codes and ideas gained through

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working in a group. These ideas, interpretations, words or works may be found in print
and/or electronic media.
Students are encouraged to read the UQ Academic Integrity and Plagiarism policy
(http://www.uq.edu.au/hupp/index.html?page=25128) which makes a comprehensive
statement about the University's approach to plagiarism, including the approved use of
plagiarism detection software, the consequences of plagiarism and the principles associated
with preventing plagiarism.
- If students cannot meet the due date for the case study submission, the following
university policies and guidelines apply:

Applications for Extensions

 Medical grounds: Applications for extension on medical grounds shall be made by
lodging the Application for Extension of Progressive Assessment form and supporting
documentation at the location outlined in Section 5.3 of the Electronic Course Profile for
the course concerned.
 Exceptional circumstances: Applications for extension on the grounds of exceptional
circumstances shall be made to the relevant Course Coordinator/Program Director by
lodging the Application for Extension of Progressive Assessment form and a personal
statement outlining the grounds for the application at the location and by the due date
outlined in Section 5.3 of the Electronic Course Profile for the course in which this
application is made. If the exceptional circumstances are such that the student cannot
reasonably be expected to have complied with these conditions, a case should be made
as to why these conditions could not be met.
 Outcome of application: Students will be advised of the outcome of their application via
their student email.

Note: A Case Study submitted after the due date and time (for which no extension has been
granted prior to the due date), will incur a late submission penalty. The penalty is at the
rate of 5% of the total available marks for the assessment item, for each calendar day or part
thereof that it remains overdue. Once a case has been marked and discussed, there can be
no late submissions. Assessment submitted more than 10 days after the due date will
receive zero marks.

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 CASE STUDY REQUIREMENTS
- These should be read in conjunction with the following sections: ‘Questions to be
Considered in the Case’, ‘Marking Rubric’, and ‘Appendix Tables’.

Section 1: Background

Provide a brief overview of the salient background information provided in the case. This
information should be relevant for your consideration of the company’s problems and issues
(It must add value!). You MUST NOT reproduce the text of the case – you only have to
include what is pertinent to the problems and issues of the case!

You need to describe the relevant characteristics of the business (its products/services,
processes, existing systems (e.g. pricing system), strategy and any important stakeholders
(if relevant), etc.); relevant characteristics of the industry in which the business participates
(intensity of competition; how the industry is changing etc.); relevant general business
conditions (market/economy growing or in recession etc.), and any other relevant
information that should be considered as background for the case.

As general guidance to do this section, you can look at the “Case Study Write-ups” uploaded
on Blackboard.

(10 marks)

Section 2: Identification of Problems and Issues

Identify (i) the problem(s) facing the company and (ii) the issues that could be causing the
problem(s) the company is facing and how you can see this manifesting in the details of the
case (i.e., why did you come to this conclusion?). You should provide a brief discussion of
the problem and issues (i.e., how they relate?) but do not analyse.

Look at the document Use of Case Studies to Learn in ACCT3104 and use it as a guide to
work in the case. In this document you can see a problem is something fairly specific and
reasonably well understood – even if its solution is not (e.g., profits keep falling even though
we believe we are doing a good job).

An issue is a more general thing – it also requires attention but needs to be better
understood before specific solutions are considered (e.g., how the pricing approach is
impacting profitability, why?).

You need to get an understanding of the problem and issues before you can diagnose the
underlying cause and recommend potential solutions!

(20 marks)

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Section 3: Analysis and Discussion of Problems and Issues

Once you have identified the problem and issues (in Section 2), consider information in the
case that is relevant to them and also consider the theory, concepts and techniques we have
learned in class thus far. Try to diagnose the underlying cause of the problems and issues
you have identified and support it with analysis and discussion. In addition, analyse the
effect of alternative decisions you may make in this case comparing the current situation with
what would you suggest. In this case, data and exhibits are provided for you to analyse and
find evidence to support your claims – use them here. You should present information of
your analysis in the Appendix Tables, of in any additional tables or graphs where appropriate
on the additional page, and simply refer to them in the body of your case.

A further note: Do not provide your recommendations in this section! A summary or

discussion of your findings is appropriate here - not your recommendations.

(50 marks)

Section 4: Recommendations

In this section, you should provide your recommendations for addressing the problem(s) and
issues you have identified. These recommendations are actions that should help to resolve
or alleviate the problems and issues you have identified in Section 2 and should be
appropriately supported by the analysis and discussions you have presented above in
Section 3 (i.e., does it all link? Is it a cohesive argument?). You may also consider if there
are any limitations to implementing your suggested recommendations, or to your analysis.

(15 marks)

Presentation and readability

See criteria in rubric.

(5 Marks)

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 QUESTIONS TO BE CONSIDERED IN THE CASE

1. Explain why the government regulators are sensitive to the amount of claims submitted to
the government insurance programs in comparison to retail prices?

 This question introduces a main point of the case: government regulations. You
should consider not only the implications of pricing decisions but also the reasons for
the government’s involvement with the issue.
 Try to integrate this into the ‘Background’.

2. Explain why potentially could/would government programs reimbursement amounts

exceed the retail sales prices for products?

 With the understanding that pricing decisions are critical to Dynamic Medical
Solutions for strategic purposes and for compliance purposes, this question
addresses another major issue of the case: the cost of providing goods and services
to customers eligible for government benefits. You should consider the relationship
between government regulations and operating costs.
 Try to integrate this into the ‘Problems and issues’.

3. Consider the information for the two products shown in Table 3. In accordance with the
Office of the Inspector General’s suggestions for “substantially in excess,” are the
government programs reimbursement rates for each of Dynamic Medical Supplies’ products
presently “substantially in excess” of the “usual charges”?

 This question provides an initial basis for you to determine if pricing issues exist. The
proposal from the Office of the Inspector General (OIG) offers a simple method for
diagnosing potential pricing problems. If it wasn’t already clear to you from reading
the case, you should understand that Dynamic Medical Supplies is currently charging
the maximum permitted selling price to their government customers, i.e. $2.20 for the
Nutrition Supplement, and $8.82 for the Nondurable Gloves.
 Try to integrate this into the ‘Quantitative analysis and discussion – Part 1’.

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4. Assuming at least one of the products of Dynamic Medical Solutions violates the Office of
the Inspector General’s suggestion for “substantially in excess,” discuss the impact of the
following three potential solutions to this dilemma on DMS’s market share, operations,
exposure to liability, and so on. In your assessment, consider the future financial implications
of the three alternatives along with the assumptions you have made in your analysis.

 This question directs your attention to three tangible problem-solving alternatives for
the purpose of evaluating the consequences of each course of action. In the process,
you should be encouraged to consider two crucial tasks of the analysis: (1) determine
new selling prices or reimbursement amounts, along with their implications, that
would fit within the regulation (addressed in 4a and 4b) and (2) determine unit
product costs and profit margin percentages in establishing “good cause” (addressed
in 4c).

 Q4a. Raise prices charged to cash and carry customers such that the government
programs reimbursement rate is no more than 20% higher than the newly calculated
amount.
o Try to integrate this in the ‘Quantitative analysis and discussion – Part 2’

 Q4b. When submitting government program claims, request reimbursement amounts

below the maximum allowable reimbursement rates in order to be within 20% of the
prices charged to cash and carry customers.
o Try to integrate this in the ‘Quantitative analysis and discussion – Part 3’

 Q4c. Attempt to establish “good cause.” Refer to some of the principles and concepts
you have learned in the course (for example, customer profitability analysis and
allocations of overhead) in establishing “good cause.” Incorporate details of your
calculations by completing the Appendix Tables, which will aid DMS in establishing
“good cause” and apply them specifically to the two products shown in Table 3.
o This will require you to perform cost allocations and select appropriate bases
for the allocation(s). Consider what are your revised total cost per unit and
overall profit margin on the two products?
o Try to integrate this in the ‘Quantitative analysis and discussion – Part 4’

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5. Looking back at your calculations and analyses performed in question 4c do you believe
the company can establish and support “good cause” in submitting claims for the maximum
allowable rates offered by government programs? In answering this question, first consider
the qualitative evidence you have already developed. Second, develop a quantitative
analysis appropriate to use in establishing or supporting your qualitative evidence.

 Your responses in this section will be partially based on your analyses in Question
4c. However, you should also incorporate the qualitative information from Table 4 of
the case in your analyses.
 Try to integrate this in the ‘Qualitative and quantitative analysis and discussion’.

6. In anticipation of the regulating agencies performing an investigation into the pricing

structure of Dynamic Medical Solutions, identify the strengths and weaknesses of the work
performed by Dynamic Medical Solutions in response to the consultant’s findings as well as
the analysis you provided in the previous questions. How should Dynamic Medical Solutions
address the weaknesses in preparing for the audit?

 Up until this question, you will have responded with an analysis that you believe is
appropriate under the circumstances. This last question gives you an opportunity to
consider how your analysis may be viewed by others, an important consideration
given the possibility that a regulatory audit could be performed.
 Try to integrate this into the ‘Recommendations’

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Marking Rubric: Dynamic Medical Solutions (Sem 1, 2018 Case Study for ACCT3104)
Case Study – Dynamic Medical Solutions
1. Background (10)
Purpose: to ‘set the scene’ for an informed
analysis of the business’ problems and issues
*The students have not repeated large
volumes of case material.
2. Problems and issues (20)
Purpose: to clearly define the problem(s) and
issues the business is facing that are then
central to the case discussion, analysis and
recommendations.
2.1 Problem recognition (5)
2.2 Recognise the significant issues (10)
2.3 Provided a succinct discussion linking
the problem(s) and issues (5)
Not attempted (0%)
You have not attempted to
highlight the important and
appropriate* background
information on the business, its
products, systems and strategy
and goals, as well as none of its
economic environment
(economy, market, competition).
The problem(s) faced by the
business have not been
identified.
No issues identified.
No link is provided as no problem
nor issues have been identified.
Below expectation (1-49%)
You have included little of the
important and appropriate*
background information on the
business, its products, systems
and strategy and goals, as well as
little of its economic
environment (economy, market,
competition). This is mostly
repetition of case material with
little added value.
A superficial attempt at
identifying the problem(s) faced
by the business.
Few significant issues faced by
the business have been
identified.
Discussion of the problem and its
link to the issues is limited.
Satisfactory (50-69%)
You have included some of the
important and appropriate*
background information on the
business, its products, systems and
strategy and goals, as well as some
of its economic environment
(economy, market, competition).
The problem(s) faced by the
business is (are) identified but not
clearly.
Some significant issues faced by
the business have been identified.
The discussion attempts to link the
problem and issues identified but it
lacks clarity.
Very Good (70-84%)
You have identified and included
most important, relevant and
appropriate* background
information on the business, its
products, systems and strategy
and goals, as well as its economic
environment (economy, market,
competition).
The problem(s) faced by the
business is (are) identified.
Most significant issues faced by
the business have been clearly
identified.
Discussion is reasonable and
links the issues to the problem.
Outstanding (85%-100%)
You have identified and included all
important, relevant and appropriate*
background information on the
business, its products, systems and
strategy and goals, as well as its
economic environment (economy,
market, competition).
The problem(s) faced by the business
is(are) clearly identified.
All significant issues faced by the
business have been clearly identified.
Discussion is succinct and clearly
links the issues to the problem.

3. Analysis and discussion of problems and

issues (50)
3.1 Quantitative analysis and discussion – You have made no attempt to You have prepared an You have prepared a sound You have prepared a good and You have prepared a comprehensive
Part 1 provide an analysis and inadequate analysis and analysis and discussion of the reasonably well developed and well developed analysis and
Quantitative analysis and discussion discussion of the relevant discussion of the relevant relevant characteristics. analysis and discussion of the discussion of the relevant
to the two products in Table 3. In characteristics. characteristics. relevant characteristics. characteristics.
accordance with the Office of the
Inspector General’s suggestions for
“substantially in excess,” are the
government programs
reimbursement rates for each of
Dynamic Medical Supplies’ products
presently “substantially in excess” of
the “usual charges”? (5)
3.2 Quantitative analysis and You have made no attempt to You have prepared an You have prepared a sound You have prepared a good and You have prepared a comprehensive
discussion - Part 2 provide an analysis and inadequate analysis and analysis and discussion of the reasonably well developed and well developed analysis and
Raise prices charged to cash and discussion of the relevant discussion of the relevant relevant characteristics. analysis and discussion of the discussion of the relevant
carry customers such that the characteristics. characteristics. relevant characteristics. characteristics.
government programs
reimbursement rate is no more than
20% higher than the newly
calculated amount. (5)

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 3.3 Quantitative analysis and discussion – You have made no attempt to You have prepared an You have prepared a sound You have prepared a good and You have prepared a comprehensive
Part 3 provide an analysis and inadequate analysis and analysis and discussion of the reasonably well developed and well developed analysis and
When submitting government discussion of the relevant discussion of the relevant relevant characteristics. analysis and discussion of the discussion of the relevant
program claims, request characteristics. characteristics. relevant characteristics. characteristics.
reimbursement amounts below the
maximum allowable reimbursement
rates in order to be within 20% of the
prices charged to cash and carry
customers. (10)

3.4 Appendix Tables You have made no attempt to Most calculations are provided Some calculations are correctly Most calculations are correctly All calculations are correctly
You must complete each of the complete the appendix tables. with some errors. provided. provided. provided.
Appendix Tables. (Note these are
marked as correct or incorrect, no
consequential marking) (10)

3.5 Quantitative analysis and You have made no attempt to You have prepared an You have prepared a sound You have prepared a good and You have prepared a comprehensive
discussion - Part 4 provide an analysis and inadequate analysis and analysis and discussion of the reasonably well developed and well developed analysis and
Attempt to establish “good cause.” discussion of the relevant discussion of the relevant relevant characteristics. analysis and discussion of the discussion of the relevant
Refer to some of the principles and characteristics. characteristics. relevant characteristics. characteristics.
concepts you have learned in the
course (for example, customer
profitability analysis and allocations
of overhead) in establishing “good
cause.” Incorporate details of your
calculations by completing the
Appendix Tables, which will aid DMS
in establishing “good cause” and
apply them specifically to the two
products shown in Table 3. (10)
3.6 Qualitative and quantitative analysis You have made no attempt to You have prepared an You have prepared a sound You have prepared a good and You have prepared a comprehensive
and discussion provide an analysis and inadequate analysis and analysis and discussion of the reasonably well developed and well developed analysis and
Looking back at your calculations and discussion of the relevant discussion of the relevant relevant characteristics. analysis and discussion of the discussion of the relevant
analyses performed in question 4c do characteristics. characteristics. relevant characteristics. characteristics.
you believe the company can
establish and support “good cause” in
submitting claims for the maximum
allowable rates offered by
government programs? In answering
this question, first consider the
qualitative evidence you have already
developed. Second, develop a
quantitative analysis appropriate to
use in establishing or supporting your
qualitative evidence. (10)
4. Recommendations (15) You have not developed any You have developed few practical You have developed some practical You have developed most of the You have developed clear, practical
Recommendations must be actions that practical recommendations. recommendations for DMS to recommendations for DMS to practical recommendations for and comprehensive
management can take that follow from the address the problem(s) and address the problem(s) and issues DMS to address the problem(s) recommendations for DMS to address
analysis. The recommendations must reflect issues of the business. of the business but these are not and issues of the business. the problem(s) and issues of the
the discussion and analysis of the case (i.e., complete. business.

ACCT3104 Case Studies Page 11

 they are supported throughout your case
study and are not just ‘new’ ideas)

5. Presentation and readability (5) The Your case presentation and Your case presentation and Your case presentation and Your case presentation and Your case presentation and
students have proof read their submission, readability is extremely poor. readability is below average. readability is satisfactory. readability is above average. readability is well above average.
and presented it as a well-structured and
cohesive case.

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 APPENDIX TABLES

You must complete each of the Tables below and include them as an Appendix in
your submission. If there are any additional calculations you wish to show that relate
to these Tables please do so using footnotes. Any additional calculations beyond
those relevant to these Tables should be shown on the additional page.

Step 1: Allocate Operating Costs to Customer Bases

(Before allocating operating costs for the most recent year to the respective customer bases,
a decision has to be made about the methods used for allocating shipping and
administration costs. Shipping employees likely do not handle orders in a materially different
way because of a particular customer type. But these employees handle more government
programs orders because of the disproportionate amount (75%) of sales to these customers.
As such, this should help you to decide the appropriate allocation base for shipping. The
same logic should be applied to administration costs.)

Table A1: Operating Expenses by Department and Cost Allocations by Customer Base
Total Costs Government Cash and Carry
Programs Allocation2 (25%)
1
Allocation (75%)
Customer Service $660,000 $ $
Shipping $870,000 $ $
Billing $120,000 $ $
Compliance $120,000 $ $
Administration $430,000 $ $
Total Operating $2,200,000 $ $
Expenses
1
Customer Service: % = $
Shipping: % = $
Billing: % = $
Compliance: % = $
Administration: % = $
2
Customer Service: % = $
Shipping: % = $
Billing: % = $
Compliance: % = $
Administration: % = $

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Step 2: Allocate Costs to Company Products

(With the operating costs divided by customer type, the costs can be further allocated to the
company’s products based on percentage of sales. Table A2 should include allocation
amounts for the two selected products.)

Table A2: Allocation of Costs to Products

% of Allocation of Total % of Cash and Carry
Government Government Programs Cash and Allocation2
Program Allocation Costs1 Carry
Sales Sales
Nutrition % $ % $
Supplement
Nondurable % $ % $
Gloves
1
Nutrition Supplement: % x $ = $
Nondurable Gloves: % x $ = $
2
Nutrition Supplement: % x $ = $
Nondurable Gloves: % x $ = $

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Step 3: Calculation of Operating Costs per Unit

Note: Please round to the nearest cent.

Table A3: Calculation of Operating Costs per Unit

Quantity Operating Cost per Unit Quantity Operating Cost
Sold to for Government Programs Sold to per Unit for
Government Customers1 Cash and Cash and Carry
Program Carry Customers2
Customers Customers
Nutrition cans $ per can cans $ per can
Supplement
Nondurable boxes $ per box boxes $ per box
Gloves
1
Nutrition Supplement: $/cans = $/can
Nondurable Gloves: $/boxes = $/box
2
Nutrition Supplement: $/cans=$/can
Nondurable Gloves: $/boxes = /box

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Step 4: Calculation of Total Cost per Unit and Profit Margin Percentage: Nutrition
Supplement

Table A4: Calculation of Total Cost per Unit and Profit Margin Percentage: Nutrition
Supplement
(A) (B) (A + B) (C) Price (C) – (A Profit
Product Operating Total per Unit +B) Profit Margin %
Cost per Cost per Cost per Margin
Unit Unit Unit per Unit
Cash and $ $ $ $ $ %
Carry
Government $ $ $ $ $ %
Programs

Table A5: Calculation of Total Cost per Unit and Profit Margin Percentage: Nondurable
Gloves
(A) (B) (A + B) (C) Price (C) – (A Profit
Product Operating Total per Unit +B) Profit Margin %
Cost per Cost per Cost per Margin
Unit Unit Unit per Unit
Cash and $ $ $ $ $ %
Carry
Government $ $ $ $ $ %
Programs

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Table A6: Direct Summary of Unit Costs and Profit Margin Percentages

Part 1: Analysis of Operations with Allocation of Costs

% of Sales Government Cash and Carry Total
Sales % $
Cost of Sales % $
Gross profit %
Less: Overhead Costs
Allocation base Government Cash and Carry Total
and (% split)
Customer
Service
Shipping
Billing
Compliance
Administration
Total Operating
Expenses
Operating
Income

Part 2: Assignment of Overhead Costs to Product Lines

Government Cash and Carry
Nutrition Gloves Nutrition Gloves
% Sales
Overhead
Units Sold

Overhead per
Unit
Product Cost
per Unit
Total Unit Cost

Price per Unit

(Cash and
Carry)
Price per Unit
(Government)
Profit %

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