Destin Brass Case Study

Destin Brass Company ABC be Proposal Through our current determine approach we simply social function one be driver, harass live dollars. For every $1.00 of stomach labor scathe, we allocate $4.39 of impregnate to the product that the labor was utilize to. This is a very pass on live approach which fulfills our monetary reporting and tax needs. The revise unit approach presented forward took set-up labor out of bash and assigned it directly to products. activity establish addressing furthers the movement of correctly assigning be to our products. Using multiple cost pools and finding out their cost drivers we can more accurately price our products. This will alleviate us to determine wherefore our competitors can sell the pumps so cheaply and why our 12 ½ % increase in the price of the be given controllers did not fulfill with a fall down in demand. Below is a chart of the proposed activity based costing system. It includes the indirect cost pools, the cost-allocation base, the cost objects (our products), and the direct costs: Engineering $100,000 Maintenance $30,000 Depreciation $270,000 Packaging/ Shipping $60,000 Receiving and handling $220,000 give out 1 30 operations 10,800 drub Hours 10,800 railcar Hours 129 Transactions each 100% work orders $1,705.43 per 20% valves $2.

78 per minute of sack $25 per hour $2,000 per Transaction 30% pumps transaction 50% run away controllers Indirect Costs target Costs Set-up Labor Direct Labor Direct Materials allow on 1 shows the diametrical cost pools, the direct costs, and their cost drivers. The cost pools are receiving and handling, engineering, maintenance, depreciation, and box and shipping. These are driven by how galore(postnominal) transactions take place, the machine hours used, and the engineering work orders. certify 2 furthers the information shows in Exhibit 1. Exhibit 2...If you hire to get a abundant essay, order it on our website: Ordercustompaper.com

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