Costing System Case Study: Westmount Retirement Residence

Costing System Case Study: Westmount Retirement Residence

Question

Case Descriptions

Introduction

Case assignments are valuable learning tools. This allows you to integrate a variety of advanced management accounting topics with knowledge gained from business research and apply it to specific business scenarios. This assignment case is intended for use in the cost portion of the Advanced Accounting course. The situation at Westmount Retirement Housing illustrates the complexity of trying to establish a comprehensive cost system. The impact of cost systems on end-user prices is also central to the case.

Once you have completed Module 6 and Task 3, begin your case analysis. The deadline is after the final module has been completed, so it must be submitted for grading before the final exam is created.

Lawsuit Description

The manager of Westmount Retirement Housing is concerned about the current accounting system. Management did not know the actual cost of each service provided, so they charged each resident the same monthly rate regardless of their individual needs. In the past, many of our patients wanted similar services, so this pricing structure was appropriate. However, due to demographic changes, some residents will need intensive medical care, while others will be healthy and fit and need less care. New pricing models need to be developed that reflect both the size of the suites occupied and the level of care and services required by individual patients.

• How to Analyze a Case
• Westmount Retirement Housing Case

When preparing your case assignment, you should consider a few questions. I have. These include:

1. What industry does Westmount belong to? What sets us apart from our local competitors?
2. What challenges does Roswell face?
3. How is our current cost structure structured? Is it done? How is it used for pricing?

There are a few questions to consider when preparing your case assignment. These include:

1. What industry is Westmount in? How does it differ from local competitors?
2. What challenges does Roswell face?
3. How is the current cost structure structured? How is it used for pricing?

4.What are the strengths and weaknesses of the current model?

5.What was the reason for last year’s poor profitability? ?

Westmount’s cost model needs to be redesigned. Consider what Roswell has been using to date and how it will change the cost factor of the new system based on the changing needs of Westmount residents.

Includes the suggested retail price that Westmount charges for new models. In the ‘analysis of alternatives’ section, a single new cost model should be designed that takes into account the per capita costs of the alternatives. This should include a step-by-step cost analysis including attribution of direct and indirect costs. You need to decide how to best allocate the indirect costs of your service department.

If necessary, add an auxiliary table to describe alternatives and final recommendations. Recommendations should include pricing recommendations relevant to the analysis.

Case assignment presentations should follow the steps in the “Case Analysis” PowerPoint presentation and should be reviewed. The questions above will help you analyze your case.

Assignment format After completing the assignment, please check the following:

1. Identify problems and challenges.
2. Generate alternatives.
3. Analyze and evaluate alternatives.