The president of Wilkerson, confronted with declining benefits, is attempting to comprehend why the organization is experiencing serious value rivalry on one product offering while ready to raise costs without aggressive reaction on another product offering. The controller recommends that the organization build up an action based cost model to see better the diverse requests that every product offering makes on the association's circuitous and bolster assets. A changed rendition of a before case.
Illustrates motivation and design for an activity-based cost system. Students estimate the new cost model, which provides a radically different perspective on product line profitability. They can suggest actions, based on the new cost model, to improve the company's profitability.
Activity-based costing; Cost accounting; Cost allocation; Cost analysis; Cost systems; Pricing; Profitability analysis
Geographic: Florida Industry: Primary metals Event Year Begin: 1989 Event Year End: 1989
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