Activity-based costing at Hot Bricks Inc / Dutch Fayard and Alison Storie.
A brick manufacturing company, Hot Bricks Inc., that has recently expanded its product line from one product to three products. The company has two cost pools: direct materials and conversion costs. The company currently assigns conversion costs on a per-unit basis consistent with the way conversion...
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| Main Authors: | , |
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| Format: | Ebook |
| Language: | English |
| Published: |
London :
Institute of Management Accountants,
2024.
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| Series: | SAGE Business cases
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| Subjects: | |
| Online Access: | SAGE |
MARC
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| 520 | 8 | |a A brick manufacturing company, Hot Bricks Inc., that has recently expanded its product line from one product to three products. The company has two cost pools: direct materials and conversion costs. The company currently assigns conversion costs on a per-unit basis consistent with the way conversion costs were assigned when only one product was offered. With the addition of the new products, the conversion costs per unit are changing unexpectedly and unpredictably. Faced with an opportunity to establish a long-term contract, company leaders must decide whether their current prices, which are based on costs estimates, are appropriate for the long-term contract. This case allows students to investigate why the costs are changing and determine the appropriate decision. | |
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