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Drilling Innovation

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Describe the production characteristics (for example, high-volume, specialty, etc.) of the three products manufactured by Drilling Innovations, Inc. in our case study.

The three products manufactured by Drilling Innovations, Inc includes: 1) GS-157, 2) HS-241, and 3) OS-367. One way to solve misallocation problems Edmonds, Tsay & Olds (2011, p. 156) is to find a more suitable volume-based cost driver to allocate utility costs using machine hours instead of direct labor hours. Volume-based cost drivers are material dollars and direct labor hours. The chief advantage of the high-low method is its simplicity to chill disadvantages is its vulnerability. Cost per unit is an average cost that is easier to complete than the actual cost of each unit and is more revelation to decision makers than actual cost (p. 74).

Volume can be expressed Edmonds, Tsay & Olds (2011, p. 160) by such measures as the number of units produced, the number of labor hours worked, or the amount of direct materials used in production. A high-performance drill according to Drilling Innovations (2012, p. 1) can be applied to a range of hole making tasks to maximize cost-per-hole reductions in steel workpieces. Sheahan (2014)

References

Drilling innovations. (2012). MWP, 156(3), 52-1NULL. Retrieved October 12, 2014 from

Sheahan, M. (2014). Global M&A Volume Reaches YTD High. High Yield Report, 25(35), 13. Retrieved October 12, 2014 from http://web.a.ebscohost .com.bethelu.idm.oclc.org/ehost/detail/detail?sid=d3024c85- 9e77-4cb6-a71f-1224dc898481%40sessionmgr4003&vid=10&hid=4101&bdata= JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh&AN=97822471

Thomas P. Edmonds, Bor-Yi Tsay, and Phillip R. Olds., Fundamental Managerial Accounting Concepts, 6th ed., (Customized for Bethel University students) McGraw-Hill Erwin (2011). Retrieved

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