Giberson Glass Studio Case Study

Thus my recommendation would be for him would involve the utilization of Activity Based Costing to allocate all indirect costs, direct costs, and overall manufacturing time into each and every product he is currently selling. His current method of splitting overhead between each line is inefficient and an incorrect picture of where all his resources are going. Going back to the Wrapped Tumblers example, Giberson would need to allocate more costs towards this product as its high levels of demand are utilizing more resources than he currently realizes. Realizing the true costing amounts of each product in this fashion will allow him to either drop inefficient products or increase/decrease the current prices of his products to match what he is truly spending on them. Given that his business is currently under distress, he also needs to focus on the effects of him completing his custom “made-to-order” products as they will bring in further revenue since manufacturing capacity is not at

Some of the disadvantages are: limiting the vendors may limit the variety of products, relinquishing inventory control over to vendors and distributors may negatively impact their customer satisfaction, and the customers may decide to deal with supplier directly which could put Best Buy at risk of loosing their business.

5. Determine the necessary sales in unit and dollars to break-even or attain desired profit using the break-even formula.

1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?

Interestingly, clubs, collectors, and museums alike fawn over even the most common of pieces. What makes Depression Glass so special? In a time of hunger and unemployment, its bright colors and exciting patterns made the mundane, or even the miserable, feel more special.

b. The inventory write down recorded, as an expense by the company is $4.4 million. It is measured at lower of cost and net realizable value. Cost is measured by weighted average using standard cost method or

Cost-plus pricing puts many distributors in a difficult position. Unless distributors manufacture the medical supplies they sell, they have difficulty offering competitive prices to customers while continuing to make reasonable profit margins. Applying only the cost-plus pricing method forces distributors to absorb the costs associated with holding, managing, and delivering inventory, regardless of the variations in weight, size or handling difficulties among different products. This is in addition to

Representing costs as a percentage of sales is not the best way to judge efficiency since it can ignore variables such as bottle deposits and discounted rates, which would show problems in production when in fact there are not any. Therefore, JJ’s statement on production remains truthful when he said that CBI has been operating as efficiently, if not more, in the past. Here’s an example:

Risk of increasing labor costs faster than expected which could directly impact the pricing of the products

* Requires short-term capital expenditure to launch product, and provides less economies of scale to launching into the whole market.

know what it is exactly, in order to assess the extent to which the accounting profit reflects

Then, you will have to organize you time better and rearrange the idle periods to locate additional 10.5 hour ((64 minus 43)x1/2 hour) per month for blowing and finishing additional Vases.

And the customer are sensitive to the price since those products are using only few times and need to be change all the time.

The value of fixed assets typically decreases over time. The amount of the decrease each year is accounted for and is called depreciation. Depreciation for the year is expensed on the income statement and added to the accumulated depreciation account on the balance sheet. So the value of the fixed assets on the balance sheet is reduced by the accumulated depreciation.

Businesses – from manufacturing, merchandising and service industries alike – take careful considerations for their costing systems. Setting-up competitive prices in the market can be a result of proper costing methods. Misallocation of costs may lead to incorrect price estimates, continuous production of unprofitable products, and ineffective processing schedules. In this case study, we will discuss the costing methods Zauner Ornaments are currently using and upon conclusion, it will enable us to distinguish the advantages and disadvantages of each costing method.