Seligram Remedy

 Seligram Option Research Conventional paper

Seligram Case Study

Shown To: Doctor Khaled Hegazy

Provided By: Cogorza Abdallah

Pupil ID: 131239

Question you:

What caused the existing system at ETO to fail?

The current cost program failed because of four major causes.

1-The existing cost system is related to direct labor hour. One cost pool area used for price allocation under assumption: All product a lot use direct labor and Overhead inside the same percentage.

2- Price system will not match the complex business structure.

3- New tendencies in the tests procedures (Vendor certification which usually lead to reduce the number of tests performed simply by ETO)

4- Change of technology (new high technology components necessary new advanced machines with an increase of automatic and longer screening )

Question 2:

installment payments on your Calculate the reported costs of the five components described in:

Without New equipment:

a) The existing system:

One burden Pool:

1- Effective Burden Rate: 145%

Product cost = Immediate Labor $ + (Direct Labor bucks * burden rate) ICA = 917 + (917*145%) = 2246. 65 dollar

ICB =2051+(2051*145%) = 5024. 95 dollar

CAPACITOR =1094+(1094*145%) = 2680. 3 dollar

AMPLIFIER =52 5+(525*145%) sama dengan 1286. 25 $

DIODE =519 +(519*145%) = 1271. 55 bucks

Five Products total price = dollar 12509. 75

b) The device proposed by the accounting administrator:

The two-burden-pool�:

1- Effective Machine-Hour Charge = $80. 00

2- Effective Burden Rate Per Direct Labor $ = 20%

Merchandise cost sama dengan Direct Labor $ & (Direct Labor $ * burden rate) + (Total machine several hours *Machine-Hour Rate)

ICA = 917 + (917*20%)+ (18. 5*80) = 2580. forty $ ICB =2051+(2051*20%)+ (40*80) = 5661. 20 dollar CAPACITOR =1094+(1094*20%)+ (7. 5*80) = 1912. 80 money

AMPLIFIER =525+(525*20%)+ (5*80) = 1030 $

DIODE =519 +(519*20%)+ (12*80) = 1582. 80 $

Five Products total cost =$ 12767. 20

c) The system suggested by the expert:

The three-burden-pool�:

1- Successful Burden Rate Per Direct Labor $ = 20%

Effective Machine-Hour Rate:

2- Main Test Room= Burden $ as well as Machine HOURS = 2103116/33201 = 63. 34  Effective Level = 63$

3- Mechanical Test out Room: 1926263/17103 = 112. 63

 Effective Rate = 113$

Merchandise cost sama dengan Direct Labor $ & (Direct Labor $ 2. burden rate) + (Main Test area machine hours* Main evaluation Machine-Hour Rate) + (Mechanical Test room machine hours* Mechanical evaluation Machine-Hour Rate)

ICA = 917 & (917*20%)+ (8. 5*63) + (10*113) sama dengan 2765. 80 $ ICB =2051+(2051*20%)+ (14*63) + (26*113) = 6281. 20 dollar CAPACITOR =1094+(1094*20%)+(3*63) + (4. 5*113) sama dengan 2010. 31 $ AUGMENTER =525+(525*20%)+(4*63) + (1*113) sama dengan 995. 00 $

DIODE =519 +(519*20%)+(7*63) + (5*113) = 1628. 80 dollar Five Goods total price =$ 13681. 20

With New machine:

a) The existing program:

One burden Pool:

Successful Burden Rate=

Total burden following adding cost of new machine / Total direct labor $ = 4713982+250000/ 3260015 = 1 . 52 *100 = 152%

Product expense = Immediate Labor bucks + (Direct Labor bucks * burden rate) ICA = 917 + (917*152%) = 2310. 84 dollar

ICB =2051+(2051*152%) = 5168. 52 dollar

CAPACITOR =1094+(1094*152%) = 2756. 88 dollar

AMPLIFIER =52 5+(525*152%) = 1323. 00 $

DIODE =519 +(519*152%) = 1307. 88 dollar

Five Products total price = dollar 12867. 12

b) The system proposed by the accounting manager:

The two-burden-pool�:

1- Machine-Hour Rate sama dengan

New test room burden following adding new machine / Total Equipment hours = 4029379 + 250000 / 50304 = 85. 07

Successful Machine-Hour Rate = eighty-five $

2- Effective Burden Rate Every Direct Labor $ sama dengan 20%

Item cost sama dengan Direct Labor $ + (Direct Labor $ 5. burden rate) + (Total machine several hours *Machine-Hour Rate)

ICA = 917 & (917*20%)+ (18. 5*85) = 2672. 90 $ ICB =2051+(2051*20%)+ (40*85)...


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