Bridgeton Task
1. The overhead allocation charge used within the 1987 mannequin yr technique research on the Automotive Element & Fabrication Plant (ACF) was 435% of direct labor greenback value. Calculate the overhead allocation charge utilizing the 1987 mannequin yr funds. Why do you get completely different numbers?
2. Calculate the overhead allocation charge for every of the mannequin years 1988 via 1990. Are the modifications since 1987 in overhead allocation charges important? Why have these modifications occurred?
three. Contemplate two merchandise in the identical product line: Product 1, Product 2. Anticipated Promoting Worth $62 $54 Commonplace Materials Price 16 27 Commonplace Labor Price 6 three Calculate the anticipated gross margins as a share of promoting worth on every product primarily based on the 1988 and 1990 mannequin yr budgets, assuming promoting worth and materials and labor value don’t change from customary.
four. Are the product prices reported by the price system applicable to be used within the strategic Assessment?
5. Assume that the promoting costs, volumes, and materials prices for the 1991 mannequin yr is not going to change for gasoline tanks and doorways produced by the ACF of Bridgeton Industries. Assume additionally that if manifolds are produced, their promoting costs, quantity, and materials prices is not going to change both.
a. Put together an estimated mannequin yr funds for the ACF in 1991 (1) if no further merchandise are dropped. (2) if the manifold product line is dropped. Clarify any further assumptions you make in getting ready your estimated mode yr budgets.
b. What would be the overhead allocation charge beneath the 2 situations?
6. Would you outsource manifolds from the ACF in 1991? Why, or why not? What extra info would you need earlier than reaching a closing determination?
