Wilkerson Case Study The competitive situation currently faced by Wilkerson is that their competitors had been reducing the prices on pumps which is the major product line of Wilkerson. The price cut in pumps has dropped the pre-tax margin to less than 3% which is far below their historical margins of 10%. Wilkerson’s existing cost.
Wilkerson Case Study on Costing [pic 1][pic 2]AnalysisTraditional Costing System Valves (in $)Pumps (in $)Flow Controllers (in $)Production(units)7500125004000 per unitTotalper unittotalper unittotalDirect Labor Cost107500012.51562501040000Direct Material Cost16120000202500002288000Manufacturing Overhead (@300%)3022500037.546875030120000Total(in$)564200007087500062248000Activity Based CostingValves (in $)Pumps (in $)Flow Controllers (in $)Production(units)7500125004000per unittotalper unittotalper unittotalDirect Labor Cost107500012.51562501040000Direct Material Cost161200002025000022880001. Machine Related Expenses1511250015187500936000Rate = (336000/11200) = 30 per hr2. Setup Labour0.33333333325001125006.2525000Rate = (40000/160).
