 # Bronson Case Study Analysis Solution

Autor:   •  November 10, 2016  •  Case Study  •  448 Words (2 Pages)  •  560 Views

Page 1 of 2

Part 1)

To calculate the total cost per package, we need to determine the cost allocation rate as below:

Cost Allocation Rate/Predetermined Overhead Rate = Estimated Total Indirect Costs/Estimated Total Direct Labor Hours = 40,125/(10,000*.01 + 50,000*.05) = \$15.4327 per labor hour

The total budgeted cost per package is calculated as follows:

 Bronson Shrimp Farms Total Budgeted Cost Per Unit (Original Costing System) Headless Shrimp Peeled and Deveined Shrimp Direct Materials: Shrimp 3.5 4.5 Foam Trays 0.05 0.05 Shrink Wrap 0.05 0.02 Direct Labor 0.2 (.01*20) 1 (.05*20) Indirect Costs 0.15 (.01*15.4327) 0.77 (.05*15.4327) Total Cost Per Package \$3.95 \$6.34

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Part B)

To calculate the total cost per package under activity based costing, we need to calculate the activity rates as follows:

 Activity Budgeted Total Costs (A) Budgeted Total Activity (B) Activity Rate (A/B) Redesign of Production Process 5,000 5 (4+1) 1,000 per design change Production Scheduling 6,000 60 (40 + 20) 100 per batch Chilling 1,500 75,000 (10,000*2.5 + 50,000*1) 0.02 per pound Processing 19,200 160,000 (10,000*1 + 50,000*3) 0.12 per cut Packaging 1,425 47,500 (10,000*1 + 50,000*.75) 0.03 per cubic foot Order Filling 7,000 200 (90 + 110) 35 per order

The total budgeted cost is calculated with the use of following table:

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