[Solved]Matshushita Corporation has a wide range of products ranging from computer chips to consumer electronics products under th

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[Solved]Matshushita Corporation has a wide range of products ranging from computer chips to consumer electronics products under the brand name of Panasonic

Question 1 (5 points)
Matshushita Corporation has a wide range of products ranging from computer chips to consumer electronics products under the brand name of Panasonic. In their product cost system, Matshushita uses one overhead cost pool that is allocated to products based on the direct labor hours. A recently hired accountant noticed the product diversity and manufacturing complexities and concluded that a labor rate based cost system would create severe under and over costing thereby distorting the product cost information. After several futile attempts to convince lower level management, he was encouraged to speak to the Chairman of the company. The Chairman patiently listened to the merits of activity based costing and the strategic advantages that come with it. At the end of the presentation, he sighed; “Ah, you don’t understand”, he said gently, “our long term strategy is to create a completely automated factory that is crucial for our success. I think our cost system is quite consistent with that strategy”.
Required: (In no more than 250 words)
Why do you think the Chairman made such a statement? (2 point)
If you are the accountant, how would you proceed with the conversation? (3 points)
Question 2 (5 points)
In recent times, many firms have entered into strategic alliances whereby they share information, process know how, Research and Development and develop co-marketing programs with other firms. A common criticism against these alliance arrangements are that these arrangements allow exploitation of one partner by the other in that the investments made by one partner are often held hostage by the other partner who behave opportunistically when it becomes their turn to keep up their side of the bargain. Moving later, an alliance partner often would point out that the investments already made by the first moving partner is a “sunk cost” and therefore, should be ignored for all future decision making.
Required: (no more than 350 words)
Is invocation of sunk cost problematic in these cases? Why or why not? (1 points)
What may be the reason why such problem may exist? (2 Points)
If your firm needs to make investments in a strategic alliance before the partner, what steps would take to avoid such a problem in the future? (2 points)
Question 3 (5 points)
It is believed that many costs are often customer driven. A prime example is the banking industry. From your understanding of cost drivers, discuss how cost may be driven by the customers in a manufacturing firm. (350 Words).
Question 4 (5 Points)
Suppose a farmer can harvest his entire crop today at a cost of $10,000 or half today, half tomorrow at a cost of $2,500 per day. The harvested crop is worth $50,000. However, if there is a heavy rain tomorrow, the entire crop for tomorrow will be wasted. (Ignore the interest for one day).
Required: ( One bonus point). 450 words and build an excel sheet
For what probability of rain should the firmer wait for tomorrow, if he is risk neutral and has no other information? (2 points)
Write an expression for the value of information if p is the probability heavy rain tomorrow. (2 points) Draw a graph of the value of information function for different values of p. (2 points).