# Wilkerson Company Case Study

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Chapter 18 ADDITIONAL ASPECTS OF PRODUCT COSTING SYSTEMS Changes from Tenth Edition Chapter 18 was modified to include discussions of customer-related and business-related cost drivers and recent evidence about the usage and success of activity-based cost systems. Approach Our treatment of job costing and process costing is as brief as we can make it and still get the general points across. Students do need to understand the general idea of these cost accumulation procedures; otherwise they are unable to visualize how costs are actually collected. The details, however, are appropriately left for an advanced course. The principal pedagogical problem here is how to get across the idea of equivalent production in process costing.…show more content…
| Machinery and equipment | 20,000 | | | (c) | Insurance: | | | | | Inventories | 100 | 100 | | | Building | 1,040 | 130 | 130 | | Furniture and fixtures | | 45 | | | Machinery and equipment | 850 | | 15 | (d) | Building repairs | 2,400 | 800 | 800 | | Machinery repairs | 1,900 | | | (e) | Telephone expense | 360 | 1,080 | 360 | | Totals | \$53,050 | \$11,055 | \$9,805 | Calculations (a) Heat, light, power--basis of distribution, cubic feet: A | 600,000 | | B | 200,000 | | C | 200,000 | 1,000,000 cubic feet | 6/10 x \$40,000 = \$24,000 A 2/10 x \$40,000 = \$8,000 B 2/10 x \$40,000 = \$8,000 C (b) Building depreciation--basis of distribution, square feet: Manufacturing | 48,000 | | Selling | 9,000 | | Administrative | 3,000 | 60,000 square feet | 48/60 x \$3,000 = \$2,400 A 6/60 x \$3,000 = 300 B 6/60 x \$3,000 = 300 C Furniture and fixtures depreciation -- 75% (\$800) = \$600 B 25% (\$800) = \$200 C (c) Insurance--basis of distribution, square feet for building: 48/60 x \$1,300 = \$1,040 A 6/60 x \$1,300 = \$130 B 6/60 x \$1,300 = \$130 C Insurance on inventories--half B; half A Insurance on furniture and fixtures -- 75% (\$60) = \$45 B 25% (\$60) = \$15 C (d) Building