California Cream Case

Full point of intersection monetary value Full production cost (per gallon) of Polynesian envisage and Vanilla a. Old be regularity: Polynesian Fantasy 2.00+1.20+(1.20*2)=$5.6/per gallon Vanilla 1.80+1.20+(1.20*2)=$5.4/per gallon b. immature be system: PolynesianFantasy 2.00+1.20+(18,000/286)/ nose candy+95,000/1,846*3/ degree centigrade+(80,000/909)/50+122,000/ one hundred0*0.6/ speed of light+175,000/1,936*1.0/100+110,000/1,100*0.3/100=$9.06/per gallon Vanilla 1.80+1.20+(18,000/286)/2,500+95,000/1,846*3/2,500+(80,000/909)/1,000+122,000/1000*0.3/100+175,000/1,936*1.0/100+110,000/1,100*0.2/100=$4.65/per gallon Effect on unmarried product cost and positive connection profits There are obviously differences among two costing regularitys. The new costing regularity makes separately cost more accuracy. The comparison of overhead be for Polynesian Fantasy and Vanilla by the two costing regularitys is: Polynesian Fantasy Vanilla Old Costing method 5.6 5.4 New Costing method 9.06 4.65 Change (New-Old) 3.46 (0.75) There wont be any change on total company profits.

But it forget be some differences on individual product between applying two methods. What should Will do The new method (Activity-Based Costing) attempts to provide a better lesson of the cost of producing products or providing services and delivering them to customers. It promises to depict costs more accurately by means of a deeper understanding twain of the activities invo lved and the resources consumed by individu! ally of these activities. Will should use Activity-Based Costing. Although this method will not affix total company profit, it will help him analysis concern on individual products and repair the manufacturing process in install to increase the company profitability. S.W.O.T. for CCI Strengths: calcium Creamery, Inc (CCI) provides highest-quality, ultra-premium ice cream. They offered 25 polar ice cream flavors. The strange flavors...If you want to get a full essay, order it on our website: OrderEssay.net

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