Accounting Case Tijuana Bronze Machine - 2779 Words

Accounting Case: Tijuana Bronze Machine Name: Course: Professor: Date Due: Introduction Tijuana Bronze Machining was founded in San Diego, California in 1984 by its current president Herb Alpert. It specializes in the cutting of precious stones and the manufacture of pump parts, valves and flow controllers. 1. Exhibit 1a Product Cost Per Unit Valves Pumps Flow Cont Total Material ($) 16 20 22 58 Run Labor hrs 0.25 0.5 0.4 1.15 Machine hrs 0.5 0.5 0.2 1.2 Receiving O/H 0.1 0.3 3.9 4.28 Material handling Once per receipt 0.48 1.8 23.40 25.70 Once per production run 0.32 1.2 15.60 17.14 Packing and Shipping 0.3 1.1 11.0 12.37 Engineering 2.67 2.4 12.5 17.57 Maintenance 1.4 1.4 0.5 3.32 Depreciation 1.3 1.3 0.5 2.99 Production cost per unit 23.28 30.49 89.95 143.72 The materials used per unit of production, the Run labor hours and machine hours are provided in exhibit 2. The overhead expenses per unit of the product have been apportioned according to their percentage production and usage. (Drucker, 1999) The receiving overhead per unit of Valves produced = (0.03 X 20,000)/ 7500 = $0.1 The receiving overhead per unit of Pumps produced = (0.19 X 20,000)/ 12500 = $0.3 The receiving overhead per unit of Flow Controllers produced = (0.78 X 20,000)/ 4000 = $3.9 The material handling expenses have been divided into two. The first group has been apportioned 60% of the total expenses which amounted to $120,000 of the total $200,000 while the secondShow MoreRelatedTijuana Bronze Machining: Teaching Commentary1774 Words   |  8 PagesOVERVIEW This is a basic case in Activity-Based Costing (ABC) and Activity-Based Management (ABM). There is enough richness to the fact-situation to create a non-trivial calculational challenge for students without taking the case beyond an introductory level. Also, the business context for the calculations is rich enough to support good discussion on the managerial implications. I use Tijuana Bronze as the introductory case on ABC/ABM in the required managerial accounting course at Tuck and at Babson