Destin Brass Case Study

Destin Brass Company ABC Costing Proposal through our current price approach we simply use 1 be driver, fatigue live dollars. For every $1.00 of run toil live, we allocate $4.39 of smash to the product that the labor party was applied to. This is a very handed-down cost approach which fulfills our financial reportage and tax needs. The revise unit costs presented earlier took set-up labor out of smash-up and assigned it directly to products. Activity found cost furthers the safari of correctly assigning costs to our products. utilise multiple cost pools and finding out their cost drivers we shag more accurately price our products. This will help us to determine why our competitors can sell the pumps so tattily and why our 12 ½ % increase in the price of the be prevailn 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 cost-allocation base, the cost objects (our products), and the direct costs: technology $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 work 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 machinate Costs Set-up Labor Direct ! Labor Direct Materials permit 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. pose 2 furthers the information shows in Exhibit 1. Exhibit 2...If you contend to get a full essay, order it on our website: BestEssayCheap.com

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