Leighton beridon owns “jeemp farms”, located near weimar, tx.

 

Read the following scenario below:

Leighton Beridon owns “Jeemp Farms”, located near Weimar, TX. The  farm produces pecan trees and sod. He has so many orders from the  Houston metropolitan area that he is able to sell all his inventory each  year, but he is not netting as much as he has in past years. His  daughter, Liesl Beridon, came home from college over Thanksgiving and  mentioned ABC costing, which she learned about in her cost accounting  class. Mr. Beridon does not really know what ABC costing is and is  skeptical as to whether it would be right for his business. He has hired  your company to educate him about ABC and whether or not he should use  an ABC system. Over the next few weeks, you will work towards helping  Mr. Beridon decide what is the best route for his company to take. 

Shortly after you get started, Mr. Beridon sends you an email stating  that he feels he needs to discontinue the sod portion of his business  and focus on his tree sector, as he can charge more per tree than he can  charge for a foot of sod. He sends you an email stating, “I can charge  so much more for a tree than a foot of grass. Therefore, I am planning  on discontinuing the sod portion of the business immediately as I make  so much more on the trees! I am going to plant all my sod acres with  trees”.

Write a 700- to 1,050-word paper plan for your boss explaining how you will analyze Jeemp Farms.

Include the following:

  • Prepare an argument convincing him to hold off on his decision and  see the results of your analysis first. As you have not had time to do  any analysis yet, you need to convince Mr. Beridon to wait on whether to  discontinue his sod business.
  • Project potential benefits Mr. Beridon could gain from using an ABC system.
  • Explain how ABC creates these benefits.

Your team is planning on conducting an analysis of whether ABC would  be beneficial to Mr. Beridon. Create a process for conducting this  analysis.

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