Contemporary Management Accounting Wilkerson Case Report * Contents Executive Summary 2 Competitive situation faced by Wilkerson 2 Wilkerson’s Existing Costing System Limitation & Possibility of Activity Based Costing 4 Cost Driver and rates under Activity-based Costing 6 Implication and Recommendations 8 Valves 8 Pumps 9 Flow controllers 9 Executive Summary Wilkerson traditional costing system seems to be too simplified. Using a single allocation base to allocate
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Bronson Shrimp Farms 1. Budgeted cost per package – Original costing system Using the original costing system that used total direct labor hours as the indirect cost allocation base, the total projected indirect costs will be allocated by first determining the allocation rate. Since we will be producing 10,000 packages of headless shrimps at 0.01 labor hours per package, the total number of hours worked would be 10,000 x 0.01 = 100 hours. Similarly, for the 50,000 packages of peeled and deveined
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READ THIS ARTICLE BEFORE READING THE BNB CASE UNEQUAL TREATMENT ALIENATING CUSTOMERS ISN’T ALWAYS A BAD IDEA, MANY FIRMS DISCOVER Banks, Others Base Service On Whether an Account Is Profitable or a Drain ‘Redlining in the Worst Form’ By Rick Brooks Staff Reporter of The Wall Street Journal CHARLOTTE, N.C.–Fielding phone calls at First Union Corp.’s huge customer service center here, Amy Hathcock is surrounded by reminders to deliver the personal touch. Televisions hang from the ceiling
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more complex in nature. In this case, Greetings. INC has added a new product line, Wall Decor, which permits them to grow without expanding their physical stores; however, they have significantly raised their overhead costs by multiplying their cost drivers. Not to mention the fact that they have incorporated a largely automated system into their product line, which we know calls for an ABC system. The main reason to move to ABC though, I’d say, would be because it will allow management to make better
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CAPPING & LABELLING BOTTLES & UTILITIES TRANSPORTATION 9 10 10 11 11 Introduction of Outpatient Business Costing Technique Chosen ACTIVITY BASED COSTING (ABC) JUSTIFICATION 12 12 12 12 Assumptions List of Activities and Cost Drivers Traditional Costing COMPARE AND CONTRAST WITH ABC UNDER ABC METHOD UNDER TRADITIONAL COSTING METHOD 13 13 14 14 16 16 Recommendations Conclusion Learning Points Reflections Bibliography Appendix 1 (Heineken) Appendix 2 (SATA CommHealth)
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analysis: $1,050,000, Product design: $2,350,000, Product Development: $3,600,000, and Prototype testing: $1,400,000. The next step is identifying cost drivers within each cost pool. One cost driver has been identified for each cost pool. Once the amount for each driver is calculated, the annual overhead cost for each cost pool is divided by the cost driver for that cost pool to determine the Activity-Based Overhead Rates for each cost pool. Now, that the rates are established, we now know what to charge
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Analysis Report Case Study Number 1 The NY Fashion Company Prepared for Prepared by John July 2006 Table of Contents Summary of Case Study: 3 Item a: Maximize total contribution margins given the constraints 3 Item b: Sensitivity analysis of solution given 10,000 yards additional acetate. 6 Item c: Income statement 7 Item d: Unit profit using the volume-based costing method. 10 Item e: Unit profit using the activity based costing method. 11 Item f: Financial/economic
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them to be incurred in the first place and to change subsequently. These activities are called cost drivers. ➢ COST DRIVERS AND COST POOLS ➢ a cost driver is an activity which generate cost ➢ a) For short term variable overhead cost, cost driver will be volume of activity, such as machine hours operated or direct labor hours. ➢ B)for long term variable overhead cost , cost driver will not be related to output volume , these cost are related to the transaction undertaken by the
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the cost accounting system had evolved from TCA to ABC. The TCA method assumes that all products indirect cost is only driven by one cost driver which is number of direct labour. The allocation of the indirect cost will be distributed following the ratio of the direct labour in production. Whereas in ABC method, it divided the indirect cost to several cost drivers based on the activity that the product was produce, from the incoming of the raw materials to outgoing shipment. For example of the activities
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Completion: Assignment no. 3 I evaded the vase and heard it crash into the wall behind me. ‘Goddamn hormones’ I thought, and ducked under the attack of a porcelain dog. I had taken cover behind the sofa, while Margaret was bombarding it with the contents of the living room. ‘Honey,’ I said soothingly, ‘I didn’t mean it like that. You look wonderful in that dress. You are glowing!’ I popped up my head to see if the coast was clear, and was rewarded when one of the stuffed animals, we had bought
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