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Destin Brass

Products Co.
by:
Section B Group 1
Abhay Mittal
Geetika Mittal
Kriti Chowdhary
Pallav Singhal
Rohan Mehta
Shakti Mehra

Overhead Cost Activity


Analysis
Pumps @
$36.24
Flow
Controlle
rs @
$95.43

Valves @
$25.19
Product
Cost/un
it

Comparison of Cost
Unit Cost

Valves

Pumps

Flow
Controllers

Standard Unit
Cost

$37.56

$63.12

$56.50

Revised Unit
Cost

$49.00

$58.95

$47.96

Activity Based
Cost

$25.19

$36.24

$95.43

Causes of heterogeneity across different costing


methods
Differential allocation of overheads
Functional based method of costing

Strategic implications &


recommendations
Price

restructuring of products

Realigning

profit margins vis-a-vis


competitors

Suitable

allocation of overheads as per

products
Adopt

a costing model which


generates higher profits

Differences in Net Income &


Profit
Activity Based
Costing

Traditional
Costing

Cost per unit

$25.19

$37.56

Selling price per


unit

$57.78

$57.78

Profit Margin

56.41%

35%

Cost per unit

$36.24

$63.12

Selling price per


unit

$81.26

$81.26

Profit Margin

55.4%

22%

$95.43

$56.50

$97.07

$97.07

Valves

Pumps

Flow Controllers
Cost per unit
Selling price per

QUESTIONS ???