Lambeth Case Study

Submitted By Program
Haider ali BBA
 Introduction
Mr. Lambeth is sole owner of a workshop and shop which
manufactures and sells custom made cabinets. Mr. Lambeth does not
believe in hiring extra labors to work in this workshop. He and his
son Jack junior are the only people who designs make and install the
cabinets.
  Analysis
• The workshop activities that based on a whole month of September was
recorded.
• The sum up of all the work during September was done, raw material
supplies, assets, total labor, direct labor and overhead cost was calculated
• The two big data from the case was calculated and the amount was picked
out of the information and put it in T accounts
• In the end the marginal analysis will be done which includes things like
what if labor was essentially fixed variable cost, total variable cost?.
 Balance sheet
Raw material work in progress inventory Supplies
Beginning balance 2150 Beginning balance 5650 Beginning balance 620

A3 A5 Other Assets
DM 750 DM 325 Beginning balance 25310
DL 1100 DL 700
Ohd 550 Ohd 350
Beg balance 2400 Beg balance 1375

A4 Owner's equity
DM 900 Beginning balance 2150
DL 650
Ohd 325
Beg balance 1875
 Beginning balance sheet
Assets September 1
Inventory
Raw Material $ 2,150
Work in progress $ 5,650
Supplies $ 620
All Others $ 16,890
Total Assets $ 25,310

Liabilities
Total Liabilities $0

Owner's Equity
Total Equity $ 25,310
 Teaching strategy
• If a contribution analysis is useful , does that mean we can conveniently
ignore the allocated cost as they are a viable party of that decisions being
made and the context at the time?
• In this case, assuming the judgment is made that a more lucrative
opportunity is unlikely to be forgone by taking carter's order, more
contribution is better then less contribution even if it is not at a level
generating a profit as traditionally measured.
• This question also affords instructors the opportunity to galvanize a class
discussion on cost allocation by asking additional questions