Академический Документы
Профессиональный Документы
Культура Документы
Individual/Group Group
Weighting 25%
Context:
This case study illustrates motivation and design for an activity-based cost system. Students
estimate the new cost model, which provides a different perspective on product line
profitability. Students are required to suggest actions, based on the new cost model, to
improve the company's profitability.
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Instructions:
• Students in each class will organise themselves into groups of 3 to 4 (no less than 3
and no more than 4).
• Students will read the 'Destin Brass Products' case study. Students will work in their
groups to prepare a response to ALL of the case questions listed in page 5 of the
assessment brief.
• Students need to submit a report, presented in proper report format (including a
reference list) by the end of Week 10.
Submission Instructions:
• The report needs to be submitted though the submission link available on the
Blackboard.
• One copy of this report needs to be submitted by a representative of each group on
the Blackboard.
• The report should be submitted in Word format
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Instructions for accessing the materials for the case study.
https://hbsp.harvard.edu/import/712265
2. Once you click on the link, you will be prompted to log into the Harvard Business
Publishing (HBP) Education website if you already have an account. Otherwise, from
the same screen, you can register for a student account.
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3. Once logged in, you will be automatically directed to the Coursepack.
4. You should be able to download the case study materials in .pdf format.
5 Once you download the case study, please refer to page 5 of ‘ACCT6004
Assessment 3 Brief’ document for case study questions.
If you experience any difficulties to access the case study materials through the provided
link, please email Mohammad Wasimi at mwasimi@laureate.net.au and cc your lecturer
in that email.
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Destin Brass Products
Case Study Questions
1. Explain the three possible ways of cost allocation discussed in this case study.
2. Develop activity-based costs for valves, pumps and flow controllers. Use the information
provided in Exhibit 5 and the description of the activity-based costing system provided in
the case.
3. Compare the estimated unit costs under the activity-based costing system (calculated in
requirement 2) to existing standard unit costs (Exhibit 3) and the revised unit costs (Exhibit
4). What causes different product costing methods to produce such different results?
4. Destin Brass is experiencing price pressure in the pump market, but the company can
increase the price of the flow controllers without inviting competition. What are some of
the possible reasons for the actions of competitors? Provide an answer based on your
understanding of the company’s activity-based costing system.
5. Discuss the strategic implications of your ABC analysis. You may consider the following
factors in your answer.
• Could the production process for flow controllers be changed in such a way to allow
Destin Brass Products to reduce the unit cost of flow controllers? How?
• How would the change in the lot size for the flow controller production affect unit cost?
• Has Destin Brass Products adopted the most profitable distribution system in the flow
controller market?
What actions would you recommend to managers at Destin Brass Products Company?
6. Assume that interest in a new basis of cost accounting at Destin Brass Products remains high.
In the following month, quantities produced and sold, activities and costs were all at
standard. How much higher or lower would the net income reported under the activity-
transaction-based system be than the net income that will be reported under the present,
more traditional system? Why?
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Learning Rubric: Assessment 3
Fail Pass Credit Distinction High Distinction
Assessment Criteria (Unacceptable) (Functional) (Proficient) (Advanced) (Exceptional)
0-49% 50-64% 65-74% 75 -84% 85-100%
Knowledge and Shows very little to no Shows limited Thorough knowledge or Highly developed A sophisticated
understanding of the understanding of how to understanding of how to understanding of the understanding of the understanding of the
cost concepts and apply the costing system apply the costing system costing system costing system techniques costing system techniques
techniques used in the technique to the case technique to the case study techniques relevant to relevant to the case study. relevant to the case study.
case study. study questions. questions. the case study.
Demonstrates little to no
capacity to explain and
apply relevant concepts.
35%
Effective Difficulty in explaining Mostly clear information Mostly clear Clearly presented and Clearly presented and
communication rationale for selected presentation, with some and adequately justified adequately substantiated
accounting tools and minor errors understanda responses responses, which indicate full
processes ble understanding and thorough
presentation Good references to application of relevant
Evidence of attempts to of quantitative and qualitative accounting tools and
make clear to audience, the information information where applicable processes
rationale and application of
selected accounting tools Sufficiently substantiated
and processes discussion of quantitative
and qualitative information
20%