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Push & Pull Approaches, Spoilage, Cost Allocations & OutsourcingA. Traditionally, companies in the United States have
employed a “push” manufacturing style. Studies in Activity Based
Management and Quality Control have indicated that this approach is filled with
many non-value-added activities, which increase overall costs and reduce
profits. The “push” style is being replaced with a “pull”
approach. Required: Describe the major differences between the push and pull
approaches. What non-value added activities are eliminated in a pull
manufacturing system?B. What is the difference between normal and abnormal
spoilage? How should they both be treated for accounting and reporting
purposes? Explain.C. Why might a company want to allocate joint costs to the
joint products produced?
D. It is now common for many companies to outsource some or
all of their internal support services, particularly those that require
routine, straightforward procedures. Many companies are also outsourcing human
resources, legal, tax and internal audit functions.