Destin Brass Products Co. case

Questions 2-4          The estimated exists calculated victimisation the legal action-based greeting method is truly different from the existing normal whole be and the edict unit cost. Exhibit 3 uses the traditional cost apportionment system of rules, which allocates all costs based on measures of volume. In the standard unit costs, Destin spunk uses direct labor as the single cost driver, which r bely meets the cause-effect standard wanted in cost allocation. Exhibit 4 is similar to exhibit 3, nevertheless kinda, 4 uses materials and machine hours as the cost driver instead of just direct labor. The bleak costs atomic trope 18 calculated by using the ABC system, which allocates costs that ar caused by non-volume-based cost drivers. After recognizing the disk operating cost activities, costs of overhead resources used for the activities atomic number 18 allocated to the activities using cost drivers. Then pooled costs of individually activity are allocated to products, using the cost drivers. It takes one large overhead cost pool and breaks it spile into several pools, which for this company are: receiving and materials handling, machine recitation and maintenance, packing and shipping, and engineering. These have a cause-effect family relationship with activities and resources that are used. So unlike exhibit 3 and 4, the new system breaks down the overhead costs a potful more.

The new estimated costs are more accurate because the measuring stick allocated to each of the overhead activities for each product is more detailed. It shows the share of how ofttimes each activi ty is performed on each product.   Â!  Â Â Â Â Â  every 3 products unit costs in the new system are different from exhibit 3 and 4. Unit price for valves has a slight change compare to the standard unit price, just for pumps and flow controllers, there is a dramatic change. Destin Brass are well under their 35% gross boundary kris goal for pumps, and wondering... If you want to get a full essay, come in it on our website: BestEssayCheap.com

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