Cases in Cost Management

Business

Quiz 11 :
Chalice Wines

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Quiz 11 :
Chalice Wines

Relevant calculation has been made in the given sheet as follows: img ROA (Return of Investment) is calculated as follows: img

The required information is calculated and shown in Exhibit 14. img For Vineyard : i) Margin to sales ratio is calculated as follows: img ii) Sale to total asset ratio is calculated as follows: img iii) Return on asset ratio is calculated as follows: img For Winery : i) Margin to sales ratio is calculated as follows: img ii) Sale to total asset ratio is calculated as follows: img iii) Return on asset ratio is calculated as follows: img For distributor: i) Margin to sales ratio is calculated as follows: img ii) Sale to total asset ratio is calculated as follows: img iii) Return on asset ratio is calculated as follows: img For retailer: i) Margin to sales ratio is calculated as follows: img ii) Sale to total asset ratio is calculated as follows : img iii) Return on asset ratio is calculated as follows: img For the overall value chain: i) Margin to sales ratio is calculated as follows: img ii) Sale to total asset ratio is calculated as follows: img iii) Return on asset ratio is calculated as follows: img

Chalice Wines Group (CWG) is public traded company. Previously it enjoyed a time of profitability. But in last preceding years, its level of profit is decreasing. The primary issue raised by in this case that management of CWG is not crafted an identifiable and clear vision. Correct cost apportioning is critical. Average costing is not appropriate for this company. ABC approach is better for this company. Company is subsidizing other parts of the value chain.