Destin Brass Products Co

Topics: Cost, Cost accounting, Units of measurement Pages: 2 (361 words) Published: November 20, 2014
Destin Brass Products Co.

1) Estimated Product costs per unit:
Number of Units
7500
 
12500
 
4000
 
Valves
 
Pumps
 
Flow Controllers
 
 
 
 
 
 
 
 
 
 
 
 
Material Overhead
 
 
 
 
 
Receiving
$600.00
 
$3,800.00
 
$15,600.00
Materials Handling
$6,000.00
 
$38,000.00
 
$15,600.00
 
 
 
 
 
 
Manufacturing Overhead
 
 
 
 
 
Packing and Shipping
$1,800.00
 
$13,800.00
 
$43,800.00
Engineering
$20,000.00
 
$30,000.00
 
$50,000.00
Maintenance
$10,500.00
 
$17,400.00
 
$2,100.00
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Material Related
 
 
 
 
 
Receiving
$20,000.00
 
 
 
 
Materials Handling
$200,000.00
 
 
 
 
Machine Depreciation
$270,000.00
$ 25
per machine hour
 
 
Engineering
$100,000.00
 
 
 
 
Packing and Shipping
$60,000.00
 
 
 
 
Maintenance
$30,000.00
 
 
 
 
 
 
 
 
 
 
 Per Unit
 
 
 
 
 
Material
$16.00
 
$20.00
 
$22.00
Receiving
$0.08
 
$0.30
 
$3.90
Materials Handling
$0.80
 
$3.04
 
$3.90
Set up labor
$0.02
 
$0.05
 
$0.48
Direct Labor
$4.00
 
$8.00
 
$6.40
Machine Depreciation
$12.50
 
$12.50
 
$5.00
Packing and Shipping
$0.24
 
$1.10
 
$10.95
Engineering
$2.67
 
$2.40
 
$12.50
Maintenance
$1.40
 
$1.39
 
$0.53
 
 
 
 
 
 
 
 
 
 
 
 
Total
$37.71
 
$48.79
 
$65.66

2) The different results from the different product costing methods are largely influenced by the allocation and division of Overhead costs in both materials and machine. ABC unit costs breaks out and allocates the Material overhead and Other overhead into smaller cost drivers using % of transactions in many areas. The Revised Unit Costs breaks out and allocates Overhead into Material and Other while the Standard Unit costs clumps all overhead together.

3) Strategic implications would be that the margins...
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