案例解答 Wilkerson Company.ppt

1、Wilkerson Case Study,1. How does Wilkersons existing costing system operate? 2. Develop an ABC model and estimate product profitability of the 3 product lines: a) What are the cost drivers? b) What are the cost driver rates? c) What are the differences in product profitability vs the current system?

2、 d) What causes these differences? 3. What actions might be appropriate for improving profitability?,1. How does Wilkersons existing costing system operate?,Machine Expense $336k,Set-Up Labour $40k,Receiving/ Prod. Control $180k,Packaging/ Shipping $150k,Engineering $100k,Production Cost Centre $806

3、k,Valves, Pumps, Flow Controllers,300% x Direct Labour Cost,Direct material $ Direct labour $,1. Product Profitability Analysis (current system),2 a) ABC Cost Drivers,2 b) ABC Cost Driver Rates,2 c) ABC Overhead Analysis: Summary,2 c) ABC Overhead Analysis: Detailed Workings: Valves,2 c) ABC Overhea

4、d Analysis: Detailed Workings: Pumps,2 c) ABC Overhead Analysis: Detailed Workings: Flow Controllers,2 c) Product Profitability Analysis: ABC,2 c) What does the ABC analysis reveal?,Valves are highly profitable Pumps achieve target margin (Wilkerson was right to match competitors price reduction) Fl

5、ow Controllers are barely profitable (no wonder competitors did not undercut Wilkersons recent price increase),Flow Controllers are produced and shipped in smaller batches, and require much more engineering support,2 d) What has caused the differences in profitability?,3. What actions might be appro

6、priate for improving profitability?,Operational improvements (perform activities at lower cost) Product design improvements (eg re-designing flow controllers to require fewer activities) Pricing (increase price of flow controllers, meet competitor prices for pumps, watch for competitors undercutting on v