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Lance Allot,vice-President of Arthur Industries,a Computer Manufacturer in England,has Been

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Essay

Lance Allot,vice-president of Arthur Industries,a computer manufacturer in England,has been trying to figure out whether one of his branch managers,Ms.Gwen,has been achieving the company-wide return on sales target of 20 percent.Mr.Allot has just been given data from his new target costing system regarding Ms.Gwen's operations.Ms.Gwen's estimated target sales volume is 30,000 computers with a target-selling price of $1,000.The data also show that Ms.Gwen's unit target cost is $750 per unit.
Required:
a.Help Mr.Allot determine whether Ms.Gwen's return on sales target has been met.
b.Has Ms.Gwen done a good or a poor job? Explain.

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Definitions:

Activity Measure

A metric used in activity-based costing to assess the extent of activity that incurs costs, aiding in more accurate cost allocation.

Spending Variances

The difference between the actual amount spent and the budgeted amount for various expenses.

Meals

Expenses for food consumed, often related to business meetings or employee welfare.

Kitchen Operations

The activities and tasks related to managing and running a kitchen in a restaurant or hotel, including food preparation and service.

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