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ZAUNER ORNAMENTS Historical Five-Year Plant-Administration Costs and Other Data 2003 2002 2001 2000 1999 Total Plant Administration Costs $300,000 295,000 285,000 280,000 290,000 Ending Inventory
ZAUNER ORNAMENTS Historical Five-Year Plant-Administration Costs and Other Data 2003 2002 2001 2000 1999 Total Plant Administration Costs $300,000 295,000 285,000 280,000 290,000 Ending Inventory Cost 90,000 3,000 58,000 50,000 76,000 Plant Personnel 122 122 119 112 116 Number of Customers 1200 1250 1100 800 600 Total Direct Labor Costs $520,000 515,000 555,000 540,000 500,000 % of Plant Capacity Used 70% 75% 85% 90% 95% Assignment Questions 1. Determine the best base for allocating plant-administration costs 2. Calculate the ABC costs for each product on a per-box basis. 3. What do these results tell you about activity-based costing versus costing based on standard volume or direct materials plus direct labor? 4. What changes, if any, should management make to Zauner's pricing strategy? ZAUNER ORNAMENTS Historical Five-Year Plant-Administration Costs and Other Data 2003 2002 2001 2000 1999 Total Plant Administration Costs $300,000 295,000 285,000 280,000 290,000 Ending Inventory Cost 90,000 3,000 58,000 50,000 76,000 Plant Personnel 122 122 119 112 116 Number of Customers 1200 1250 1100 800 600 Total Direct Labor Costs $520,000 515,000 555,000 540,000 500,000 % of Plant Capacity Used 70% 75% 85% 90% 95% Assignment Questions 1. Determine the best base for allocating plant-administration costs 2. Calculate the ABC costs for each product on a per-box basis. 3. What do these results tell you about activity-based costing versus costing based on standard volume or direct materials plus direct labor? 4. What changes, if any, should management make to Zauner's pricing strategy
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