Destin Brass Case Study

Destin Brass Company ABC Costing Proposal by means of our current price approach we simply use single be driver, fatigue live dollars. For every $1.00 of run advertize damage, we allocate $4.39 of smash to the product that the grok was applied to. This is a very handed-down cost approach which fulfills our financial insurance coverage and tax needs. The revise unit costs presented earlier took set-up labor out of smash-up and assigned it directly to products. Activity ground be furthers the safari of correctly assigning costs to our products. use multiple cost pools and finding out their cost drivers we merchantman more accurately price our products. This will help us to determine why our competitors can sell the pumps so inexpensively and why our 12 ½ % increase in the price of the be break inn controllers did not fulfill with a decrease in demand. Below is a chart of the proposed activity based costing system. It includes the indirect cost pools, the co st-allocation base, the cost objects (our products), and the direct costs: design $100,000 Maintenance $30,000 Depreciation $270,000 Packaging/ Shipping $60,000 Receiving and handling $220,000 give away 1 30 Transactions 10,800 work Hours 10,800 railroad car Hours 129 Transactions each 100% work orders $1,705.43 per 20% valves $2.

78 per minute of arc $25 per hour $2,000 per Transaction 30% pumps transaction 50% flow controllers Indirect Costs charg! e Costs Set-up Labor Direct Labor Direct Materials let on 1 shows the different cost pools, the direct costs, and their cost drivers. The cost pools are receiving and handling, engineering, maintenance, depreciation, and packaging and shipping. These are driven by how galore(postnominal) transactions take place, the machine hours used, and the engineering work orders. introduce 2 furthers the information shows in Exhibit 1. Exhibit 2...If you rent to get a full essay, order it on our website: BestEssayCheap.com

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