Required: 

 1Calculate the material handling rate that would have been used by Eloise Smith’s predecessor at East Coast Marine. 

2Calculate the revised material handling costs to be allocated on a per purchase order basis. 

 3Discuss why purchase orders might be a more reliable cost driver than the dollar amount of direct material. 

4Calculate the difference due to the change to the new method of allocating material handling costs to government contracts. 

5Prepare a forecast of the cumulative dollar impact over a three-year period (based on the coming year plus 2 more years) of Eloise Smith’s recommended change for allocating Material Handling Department costs to the Government Contracts Unit. Round all calculations to the nearest whole number. 

6Referring to the standards of ethical conduct for accountants described in Chapter 1: 

 (a)Discuss why Eloise Smith has an ethical conflict. 

(b)Identify several steps that Smith could take to resolve the ethical conflict. 

Required: 

 Your consulting firm has been hired to help HLW to evaluate its new fee structure. Write a letter to the club's managing director dealing with the following issues: 

1Will HLW's new membership plan and fee structure improve its ability to plan its cash receipts? Explain your answer. 

2Estimate the effect on sales revenue resulting from the planned change in fee structure for the next financial year, which starts 1 October and ends on 30 September. State any assumptions that you need to make. 

3Hawthorn Leisure Works should evaluate the new membership plan and fee structure completely before it decides to adopt or reject it. 

(a)Identify the key factors that HLW should consider in its evaluation. 

 b)Explain what type of financial analyses HLW should prepare in order to make a complete evaluation. 

4Explain how HLW's cash management practices may differ from the present if the new membership plan and fee structure are adopted. 

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