Pinterest Austin James Wilkerson. Boulder Police Prosecutors, who had urged the judge to send Wilkerson to prison, said they were disappointed with the decision. The attack and the light sentencing echo the high-profile assault case at Stanford University in northern California, which launched an international debate about sexual violence on college campuses and rape culture in America. Turner, who was convicted of multiple feloniesincluding assault with intent to rape an intoxicated woman, was sentenced to six months in county jail.
Get Full Essay Get access to this section to get all help you need with your essay and educational issues. Discuss the pros and cons of this system. Wilkerson uses a simple traditional Wilkerson case accounting system in which each unit of product is charged for direct material, direct labor and overhead costs.
Material cost is based on the prices paid for component under annual purchasing agreements. Labor cost is charged to products based on the standard run times for each product.
The overhead costs are allocated to products as a percentage of production-run direct labor cost. The current cost accounting system is consistent with traditional costing system required for external financial reporting.
Traditional costing is attractive to financial reporting because it better matches costs with revenues. All manufacturing costs are assigned to products in order to properly match the costs of producing units of product with their revenues when they are sold.
Financial reporting standards explicitly require companies to use traditional costing for external reporting purposes. However, traditional cost accounting methods suffer from several defects that can result in distorted costs for decision-making purposes. All manufacturing costs, even those that are not caused by any specific product, are allocated to products.
Nonmanufacturing costs that are caused by products are not assigned to products. Additionally, traditional methods tend to place too much reliance on unit-level allocation bases such as direct labor and machine-hours.
This results in overcosting high-volume products and undercosting low-volume products and can lead to mistakes when making decisions. Compute Activity-Based Costing product costs using 1 actual cost driver rates, and 2 capacity-based cost driver rates.
Which of these approaches is appropriate for Wilkerson and why? It is more appropriate for Wilkerson to use the ABC method since it shows a more realistic per unit cost based on different level of activities.
This may allow them to find ways to be more competitive on product pricing in the market. What managerial actions are indicated by the activity based costing system?
From the activity based costing system the management will be able to see the products cost structure and be able identify activities that would benefit from process improvements. When used in this way, activity-based costing is referred to as activity-based management.
The first step in any improvement program is for the management to decide what to improve. The products cost computed in activity-based costing can provide valuable clues concerning where there is waste and opportunity for improvement. For example, looking at the Pumps and Flow Controller, managers at Wilkerson may conclude that the company spends far more on receiving and production control, and packaging and shipping activities that adds no value to the products.
As a consequence, they may target their process improvement efforts toward these areas. Improvements on these areas could enable the company to gain competitive edge on pricing these products.
Similar to what was already done, Wilkerson will need to run a small task force on a monthly basis so that data concerning numerous activity measures are collected, checked, and entered into the system.
Although the activity based costing method can provide more accurate information about individual product or services, the organization should expect to have increased costs due to additional research efforts to collect and appropriately allocate overhead costs. More essays like this:Management Accounting-- Wilkerson Company Case Words | 11 Pages.
The purpose of this report is discussing the case of Wilkerson Company that confronting tough competition in price cutting in pumps which caused to a big drop of pre-tax operating income from 10% to 3%. The president of Wilkerson, faced with declining profits, is struggling to understand why the company is encountering severe price competition on one product line while able to raise prices without competitive response on another product line.
The controller proposes that the company develop an activity-based cost model to understand better the different demands that each product line makes on. Supporters of Wilkerson, as in the California case of Turner, appealed for leniency. Wilkerson’s friends and family said the crime was a “traumatic incident” for him.
Case study. In the Wilkerson Company case study of Harvard Business School, the main issue that the company is facing lower pre-tax operating margin (3%) comparing to historical pre-tax operating margin of 10%. Currently, the company uses simple Overhead.
1. The competitive situation is different between the products. Pumps are commodity products, produced in high volumes for a market with high price competition - price cutting by competitors led to a drop of Wilkerson’s pre -tax margin to under 3%, gross margin on sales for pump sales has fallen below 20%/5(14).