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Colorscope

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Cost Accounting: Colorscope Case Analysis

...Colorscope must alter its operation sequence in order to reduce idle time during assembly. Since the company is following a sequential processing of jobs, a high idle time for assembly means that scanning is taking a significant amount of time. Colorscope may consider purchasing the technology of the next generation. Further, Colorscope must learn not to put all of its eggs in one basket: it should not allow one customer to account for more than 30% of its business. The company should attempt to retain its currently profitable clients by providing competitive pricing specialized attention to each client. Since Colorscope is not a market leader, The five departments(prep, scanning, assembly, output, and quality control) serve as appropriate overhead cost pools for Colorscope. These are the major states in the production process. Hours are not clocked in these departments in fixed proportions. In order to effectively determine the amount of overhead in each overhead cost pool, we first allocated overhead to the cost pools(the five departments), and then allocated : Before desktop publishing became popular, Colorscope possessed a competitive advantage through its expensive proprietary computer equipment that could produce complicated print special effects. Colorscope has also been able to build strong relationships with valuable customers through the years. The company has always possessed a solid reputation for providing high quality work in its field. Another reason why......

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