Destin Brass Products

Destin Brass Products Co. chance 1. speak to Material $22 Set-up Labor $0. 48 Direct Labor $6. 4 Machine depreciation (0. 2 hours per whole *$25 per hour of use) $5 Receiving and Material Handing (78% * $220000/4000) $42. engineering science (50%*$100000/4000) $12. 5 packing material and exile (73%*$60000/4000) $10. 95 Maintenance (7%*$30000/4000) $0. 525 Total Cost per Flow Controller $100. 755 2 Cost traditional Revised ABC Set-up 16. 45% 71. 43% 71. 43% Machine Depreciation 16. 45% 7. 4% 7. 4% Receiving & Handling 16. 45% 19. 2% 78%Engineering 16. 45% 7. 4% 50% Packing & Shipping 16. 45% 7. 4% 73% Maintenance 16. 45% 7. 4% 7% 0. 4*4000*16/9725*16 = 16. 45% 12*10/168 = 71. 43% 0. 2 * 4000/10800 = 7. 4% 3. Under the traditional price explanation system, the confederacy entirelyocated the total disk overhead embody appoint to production on the basis of production-run labor cost. The unit labor cost of tend controllers is $6. 4. The unit overhead cost allocated to it is only $28. 10. When using the revised cost accounting system, the company allocated the overhead cost base on machine hours.The machine hour of point controllers is the lowest among the three products. So whether the company uses devise labor dollars or machine hours, the overhead cost allocated to feed in controllers are relatively low since they pour down less of this cost basis. When use ABC system, the company allocates the overhead cost on the basis of transactions. Among all the products, the company spends 78% of its receiving and materials handling, 73% of packing and cargo ships and 50% of engineering efforts on flow controllers.Since flow controller production use most of the transactions, the be assigned to flow controllers are higher chthonian ABC than they are under the traditional cost accounting system. 4. After using the ABC cost system, more overhead costs are allocated to flow controllers and less to valves and pump. Since other factors are stay the same, the wampum income for valves and pumps entrust increase and the net income for flow controllers will decrease. Income does not change.