Unit 5 Research Project Terra O’Brien Destin Brass Products Company is concerned with its level of competition and their product costing system. Peggy has discussed some of the issues facing the company with Roland and John. The following are overhead activities and the cost drivers associated with them: Overhead Activities | Cost Driver | Machine depreciation | Increases with the amount of machine usage | Setup labor | Increase with the amount of setup hours. | Receiving | Increases
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Destin Brass Production Company Contents Executive Summary ...................................................................................................................... 2 Problem Statement ....................................................................................................................... 2 Key Decision Criteria .................................................................................................................... 3 Alternatives Analysis .......
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ACCT 6218 Sec 01 12/10/11 I would recommend that Destin Brass stay in the flow control market by increasing current prices. However, I would also recommend amending the goal of having a 35% gross margin across all three products. Currently Destin Brass is selling their Flow Controllers for a few dollars under cost. After getting buy-in about lowering target gross margin for Flow Controllers, I would recommend a selling price of $120. This is less than a $25 price increase and in my marketing
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Introduction Destin Brass Products Co. is a Florida based manufacturing company specializing in brass components that are used in fluid distribution systems within the water purification industry. They operate one manufacturing facility and focus on the machine and assembly steps of three products: valves, pumps and flow controllers. Recently, Destin has been facing increasing price competition on their line of pumps which is causing them to continually reduce prices resulting in lower margins
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Rev. April 27, 1993 Destin Brass Products Co. ost Teaching Note Substantive Issues Raised The managers of Destin Brass Products a y or P re struggling to understand the relationship between their costs and prices for each of the three products produced and sold by Destin. One of the products, pumps, is coming under increasingly competitive price pressure. As a result, Destin has been unable to maintain its desired profit margin. At the same time, Destin has been able to raise
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Destin Brass Products Destin Brass produces three products used for water purification systems: valves, pumps and flow controllers. They are seeing high competition in the pumps market while competitors are reducing the prices on pumps. Because they do not have any design advantages to their product, they feel they need to follow the market and lower their prices as well. A meeting was held to discuss the declining profits and a proposal to change their overhead allocation method was proposed
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Destin Brass Products Co. Case study Cost Issues. Vales: Several competitors could math our quality but none had tried to gain market share by cutting price and gross margins had been maintained. Pumps: Our competitors’ sales prices are below our pump-cost calculation even when our manufactural process is better. Could not figure out how competitors making profit unless being subsidized by other products. Flow Controllers: We increased price by 12.5% with no apparent effect on demand. Peggy
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Case Study #1 Destin Brass Products Background Destin Brass Products is a local specialized brass products manufacturer in Florida. Brass foundries are purchased from suppliers and are machined and assembled in the company’s three product line. Valves, Destin’s first product line, is having a stable share in a mature market due to the precise specifications requirement and advanced manufacturing skills. Pumps, a product line generating 55% of the revenues is recently suffered from price cutting and
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Destin Brass Products Company (“Destin”) was established in 1984 when Steve Abbott had sensed an opportunity after talking with a president of a large manufacturer of water purification equipment who was dissatisfied with the quality of the brass valves available. Soon after the formation of the company, Scott and his team were able to manufacture valves that met or exceeded the needed specification enabling them to acquire a contract with the purification equipment manufacturer and enabling them
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