Seligram Case

Q1) Seligram is using a single pool appeal system of rules. In the single approach pool system, all products consume range labor and overhead in the analogous proportion. The problem with this is that many products need more direct labor spell others shoot more automated railroad carry operation. Therefore, the proportion of direct labor employ to the proportion of direct machining used for each component differs, while they ar all being charged at the same rate. The shift in the industry from labor intensive test to more technologically advanced machine based testing and reliance on vendor certifications caused the single pool cost system to become obsolete. Continuing to use the original cost system would drive the prices charged to customers up to a full stop where Seligram feared they would lose business.

Q2) The cost for the five components described in demonstrate 6 can be shown as follows: a) The existing system: victimisation the given burden rate of 145%, the mensurable costs of the existing system follows: Product| Direct push back| Burden| Total Costs| ICA| 917 | 1,330 | 2,247 | ICB| 2,051 | 2,974 | 5,025 | Capacitor| 1,094 | 1,566 | 2,680 | Amplifier| 525 | 761 | 1,286 | Diode| 519 | 753 | 1,272 | | | | | B) Using the managers proposal the system is separated by machine hour burden and direct labor burden. The revise labor burden rate is 21%, while the machine hr burden rate is $80.1. The calculated costs are updated as follows: Product| Direct Labor| Burden| Mach. hr| Mach. Burden| Total Costs| ICA| $917.00| $192.57| 18.50| $1,481.85| $2,591.42| ICB| $2,051.00| $430.71| 40.00| $3,204.00| $5,685.71| Capacitor| $1,094.00| $229.74| 7.50| $600.75| $1,924.49| Amplifier| $525.00| $110.25| 5.00| $400.50| $1,035.75| Diode| $519.00| $108.99| 12.00| $961.20... If you urgency to get a full essay, order it on our website: Orderessay

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