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525 531 50min plantwidedepartmentandactivitycostrates

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Unformatted text preview: ,000 6,000 5,000 1,800 5,000 1,200 1,000 28,000 3,220 800 4,020 $22,470 St. Helen’s Glass $16,800 $20,930 $22,470 4,600 2,400 7,000 $35,000 Total $35,000 $35,000 $35,000 The higher the percentage of costs direct ly traced to each case, and the greater the number o f ho mogeneous indirect cost pools linked to the cost drivers o f indirect costs, the more accurate the product cost of each individual case. The Widnes and St. Helen’s cases differ in how they use “resource areas” of Wigan Associates: Widnes Coal 30.0% 66.7 32.0 27.8 12.0 16.7 25.0 5­24 St. Helen’s Glass 70.0% 33.3 68.0 72.2 88.0 83.3 75.0 Partner professio nal labor Associate professio nal labor Research support labor Computer time Travel and allowances Telephones/faxes Photocopying The Widnes Coal case makes relat ively low use of the higher­cost partners but relat ively higher use of the lower­cost associates than does St. Helen’s Glass. As a result, it also uses less o f the higher indirect costs required to supp...
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