GCU ACC650 Week 8 Benchmark-CLC Assignment: Decision Making

This is a CLC assignment.

The instructor will assign each group one case from the following cases found in the textbook: C14-62, C14-63, C15-48, or C16-59.

APA format is not required, but solid academic writing is expected.

Submit in a Word document with each item numbered. Excel spreadsheets with relevant calculations should be embedded within the document.

This assignment uses a grading rubric. Instructors will be using the rubric to grade the assignment; therefore, students should review the rubric prior to beginning the assignment to become familiar with the assignment criteria and expectations for successful completion of the assignment.

You are not required to submit this assignment to Turnitin, unless otherwise directed by your instructor. If so directed, refer to the Student Success Center for directions. Only Word documents can be submitted to Turnitin.

Case 14-63Page 183

ALBERTA GAUGE COMPANY, LTD.Income StatementSecond Quarter(in thousands)

The company is manufacturing at capacity and is selling all the gauges it produces. Required:

1. JoAnn Brower says that Alberta Gauge Company’s product-line income statement for the second quarter is not suitable for analyzing proposals and making decisions such as the ones suggested by Alice Carlo. Write a memo to Alberta Gauge’s president that addresses the following points. a. Explain why the product-line income statement as presented is not suitable for analysis and decision making. b. Describe an alternative income-statement format that would be more suitable for analysis and decision making, and explain why it is better.

2. Use the operating data presented for Alberta Gauge Company and assume that the president’s proposed course of action had been implemented at the beginning of the second quarter. Then evaluate the president’s proposal by specifically responding to the following points.

a. Are each of the three suggestions cost-effective? Support your discussion with an analysis that shows the net impact on income before taxes for each of the three suggestions.

b. Was the president correct in proposing that the R-gauge line be eliminated? Explain your answer.

c. Was the president correct in promoting the Q-gauge line rather than the E-gauge line? Explain your answer.

d. Does the proposed course of action make effective use of the company’s capacity? Explain your answer.

3. Are there any qualitative factors that Alberta Gauge Company’s management should consider before it drops the R-gauge line? Explain your answer. (CMA, adapted)