1. What is the competitive situation faced by Wilkerson?

2. How does Wilkerson existing cost system work?

3. What would an activity-based costing for Wilkerson look like?

1 ss missing
4. What does the ABC product cost and calculation reveal?
Wilkerson can continue to decrease prices of commodity products (valves and pumps) since
their margins are quite high, but need to react to negative profitability of flow controllers.

5. How to lower material and labour cost?

6. Looking just at the product cost, under the direct labour-based cost allocation system,
what actions can management take to reduce product cost?

Per product labor costs can be reduced by increase the capacity utilization

Material costs can be reduced the demand planning and forecasting and purchasing
materials in bulk by means of long-term contracts
7. What actions are suggested by the ABC system?

operations improvements: Reduce setup times and cost of shipping by shipping at maximum
capacity

8. What are the limitations of the analysis?

The overhead costs may not be accurately proportional to the cost drivers we have decided.

For Assessment - Prepare: Chapter 1, 2, 3, 10, 11, 13

For knowledge - Chapter: 5