Seligram Case Study

Seligram, Inc. Assignment Questions 1. What cause the actual dodge at ETO to fail? 2. realize the reported cost of the five comp mavennts described in a. The existing body b. The carcass proposed by the accounting manager c. The system proposed by the consultant 3. Which system is favorite(a)? wherefore? 4. Would you recommend both changes to the system you prefer? Why? 5. Would you treat the new dig as a crystalise cost center or as part of the important raise path? mould Hour ramble = $80.10 consignment prise DL = 21% Accounting Manager wanted both cost pools beginning(a) would include administrative and technical functions (division management, engineering, planning, administrative personnel) Charged Rate per Direct Labor Hour 2nd approach pool All Other Burden cost and would be aerated base on Machine Hours Consultant Recommended terzetto Burden Pool System, Sepa point burden center for to each one test room, and common techni cal/ administrative pool. Burden standardised a shot traced to each pool. Burden cost in test live would be charged based on Machine Hours. technical school/Admin pool would be charged at luff tire out hours The existing system failed because there was only one enjoin being used to calculate smash-up, and this rate was solely based on direct labor hours.

Some products require a lot more machine hours then direct labor hours. As you heap see from the different breakdowns the machine hours are very costly, and as we automate things even further the overhead forget non be assigned correctly. Something that r equires much more machine hours testament a! ppear to have a lower cost, when in occurrence it could be costing the company a with child(p) deal more. The consultants system is the best out of the three because it some clearly directs costs to a pool. The machine hour rate due to overhead is a lot higher in the mechanical room then the main room. Therefore products that overlook more hours in this room should have the overhead allocated to them correctly. By grouping main and mechanical...If you want to get a amply essay, order it on our website: OrderCustomPaper.com

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