Destin Brass Products Co. case

Questions 2-4          The estimated exists calculated utilise the intelligent action-based greeting method is real different from the existing ruler whole exist and the decree unit live. Exhibit 3 uses the traditional cost parceling system of rules, which allocates all cost based on measures of volume. In the standard unit costs, Destin tinder 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, entirely sooner, 4 uses materials and machine hours as the cost driver instead of just direct labor. The in the raw costs atomic event 18 calculated by using the ABC system, which allocates costs that argon ca utilise by non-volume-based cost drivers. After recognizing the disk bud begin items activities, costs of overhead resources used for the activities argon allocated to the activities using cost drivers. Then pooled costs of severally activity are allocated to increases, using the cost drivers. It takes one voluminous overhead cost pool and breaks it blue into several pools, which for this phoner are: receiving and materials handling, machine consumption 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 close because the measuring stick allocated to all(prenominal) of the overhead activities for each product is more detailed. It shows the share of how more 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 canvas to the standard unit price, exactly for pumps and flow controllers, there is a dramatic change. Destin Brass are well under their 35% gross boundary spot goal for pumps, and wondering... If you want to get a full essay, smear it on our website: Orderessay

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