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Indianapolis Case Solution & Answer

Indianapolis Case Solution

Issues pertaining to various scenarios:

Activity based costing was implemented quickly due to the upcoming budget allocation and development works such as Pothole Filling. The scenario in which ABC costing was being developed could have created unemployment in the city as many of the employees would lose their jobs if the new project will be successfully bid by a private company.

Moreover, within six weeks, the accounting firm had to report the results of investigation, therefore, in very short span of time different activities were planned by them to complete the investigation within specified time. In case if any phase gets wrong input or unreliable input, then in that case the final results could lead to massive disaster of the city. The final results would be used as the benchmark to compare new bids and if those bids would be compared to unreliable report, then transparency would be challenged and the development work could be in danger.

In the case of implementation phase, issues could arise such as use of low quality material by the winning party in order to end the project profitably. The difficulty faced by citizens due to the work in progress in the city would also be an issue. If the party is taking more time to complete the project, then the citizens will suffer more.

Signals showing success/failure probability:

When the data from work management system was taken and there was an input error, then there was the possibility that this project would not be completed successfully. Moreover, the work management system was not providing the total amount, which was spent on each particular site/project. This was a clear signal regarding the in completion of accounting firm, however the determination of Stephen and Roob towards this project implementation gave a positive signal regarding the completion.

The employees of the various departments were laid off and the managers were replaced, as well as there was dissatisfaction among the workers for the new Mayor.This indicated that the employees were not happy with the moves of the Mayor and in the future it made it evident that he would not get he support of his employees.. These comments were anticipating the failure of the project.

Lastly, when the data was provided by the accounting firm, there was a clear indication that the bids would be invited by the Mayor and the project would surely be completed.

Actual costing model (Old):

The old costing model was lacking the details of the provided accounts, therefore there was an obsolete information system in the old system to plan about the forthcoming days/future. The current management had no idea about the value of the infrastructure provided to the city till now. Moreover, no research was to be conducted before implementing the development projects, and the traditional systems were being followed to determine the specific area where the development was to be carried out. There was no information about the expenditure spent on road reconstruction, enhancement, resurfacing, repaving, or pothole filling.

Strengths of actual model

  • Kept employees away from burden of record keeping
  • Satisfaction among employees
  • Model of ancestors

Weaknesses of actual model

  • No information record for future projection
  • Citizens dissatisfaction
  • Poor database

Giving chance to employees to see the estimates, was this a good choice?

It was surely a good choice for the employees because through this way they will be able to overcome their previous mistakes and make their job secure. As recently, the Mayor laid off some employees due to their poor practices, therefore, this opportunity would be like a birth for the whole department……………….

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