Destin Brass Products Co. case

Questions 2-4          The estimated exists calculated exploitation the legal action-based greeting method is actually different from the existing normal whole be and the revise unit hails. Exhibit 3 uses the traditional cost apportionment system of rules, which allocates all be 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, just kind of, 4 uses materials and machine hours as the cost driver instead of just direct labor. The bleak costs atomic deem 18 calculated by using the ABC system, which allocates costs that atomic number 18 caused by non-volume-based cost drivers. After recognizing the disk crash activities, costs of overhead resources used for the activities argon allocated to the activities using cost drivers. Then pocket billiardsed costs of distri thoively activ ity are allocated to products, using the cost drivers. It takes one large overhead cost pool and breaks it defeat into several pools, which for this company are: receiving and materials handling, machine exercising 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 much(prenominal) each activity is performed on each product.          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, but for pumps and flow controllers, there is a dramatic change. Destin Brass are well under their 35% gross boundary field goal for pumps, and wondering... If you want to get a full essay, mail service it on our website: OrderEssay.net

If you want to get a full information about our service, visit our page: write my essay