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Unformatted text preview: (Activity Rates times Total Activity for each product). This is the final allocation in the process. e. Calculate ABC based manufacturing overhead per unit for valves, pumps, and flow controllers. f. Calculate total product costs per unit for valves, pumps, and flow controllers. 2. Compare the current total product costs per unit calculated using the plantwide P.O.R. ( in Exhibit 2) to the total product costs per unit calculated in (1) above for valves, pumps, and flow controllers. 3. Calculate and compare the target selling price using a target gross margin % of 35% under the two overhead allocation methods (standard – given in the case and the ABC target selling price you computed) for valves, pumps, and flow controllers (See Exhibit 2). Hint – this is NOT cost plus 35%! 4. Calculate and compare the actual gross profit % using current pricing under both allocation methods for valves, pumps, and flow controllers (See Exhibit 2)....
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 Fall '08
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 target selling price, flow controllers, a. Allocate manufacturing

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