Create an activity-based cost model using the information from the case. Derive and report estimates of...

 

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Create an activity-based cost model using the information from the case. Derive and report estimates of the cost and profitability of each of Wilkerson's three product lines for the product line and for each unit of product produced. What difference does your cost assignment have on reported costs and profitability? What alternative cost allocations could you have done? How robust are your cost estimates? What causes any differences between costs and profitability between traditional and ABC systems? Suppose that Wilkerson uses capacity rather than actual levels of production for product costing. Now what difference does your cost assignment have on reported costs and profitability? Should Wilkerson use actual activity levels or capacity to calculate activity-based costs? Create an activity-based cost model using the information from the case. Derive and report estimates of the cost and profitability of each of Wilkerson's three product lines for the product line and for each unit of product produced. What difference does your cost assignment have on reported costs and profitability? What alternative cost allocations could you have done? How robust are your cost estimates? What causes any differences between costs and profitability between traditional and ABC systems? Suppose that Wilkerson uses capacity rather than actual levels of production for product costing. Now what difference does your cost assignment have on reported costs and profitability? Should Wilkerson use actual activity levels or capacity to calculate activity-based costs?