Bronson Case Study Analysis Solution
Autor: msalesha1 • November 10, 2016 • Case Study • 448 Words (2 Pages) • 982 Views
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) | ||
| 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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