Compute amount of overhead cost allocated to each product

Assignment Help Case Study
Reference no: EM131321144

Apple Case Study

In September 2005, Apple Computers unveiled a new version of smaller, sleeker iPods (i.e., digital music players).  The new iPod-Nano holds up to 1,000 songs (4-GB) and works with Macs and PCs. The Nano has a color display and is available at conventional retailers in the United States for $249.

Apple also offers a 20-GB, standard iPod for $299.  Many potential customers have said they were disappointed that the Nano cost only $50 less than the standard iPod which has more than five times the storage capacity.  Nonetheless, the media hype for the Nano has already exceeded expectations.

A new division of Apple will manufacture only the Nano (4-GB) and the Standard (20-GB) iPods.  The critical part of the manufacturing process uses a single machine that produces the color displays on both types of iPods.  Traditionally Apple has made production and marketing decisions based on product profitability.  The planned annual financials for each product are presented in the table below.

Please See Apple Attach 1

Apple wants to reallocate the existing overhead costs to products using recently collected information with respect to key activities and activity cost drivers.  They have the following three activities and other information

Please see Apple Attach 2

Compute the amount of overhead cost allocated to each product and the profitability of each product using the activity based costing approach. What do you learn from the ABC analysis?  How can Apple change in order to improve the profitability of its iPods?

Should Apple analyze the Selling and Admin costs using an ABC system? Why or why not?

For this question, assume that Apple is considering eliminating either the iPod-Nano or the iPod-Standard. Explain two important factors that Apple should consider in a decision to eliminate either one of these products. Your answer should include 1 quantitative fact.


Reference no: EM131321144

What factors in hong kong marketplace impacted innovation

The Club took many steps in the project. Which steps did it take to define the design problem and which steps did it take to solve it? What factors in the Hong Kong marketpl

Case study on erp project implementation

Vito was now interested in finding out what the new critical path will be. Furthermore, Vito wanted to start work on the project by July 01, 2013 and wanted to know when th

Discuss competition within intermodal transportation

Discuss competition within intermodal transportation. Points of discussion may include strategies, the impact of regulation/deregulation, competition between the various mod

What media should weymouth be using to send its messages

Most business communication involves good news for some audiences, bad news for others. What does this imply about how Weymouth should send its messages? What media should W

Prepare a cash budget for each month of the fourth quarter

Prepare a cash budget for each month of the fourth quarter and for the quarter in total. Prepare supporting schedules as needed. (Round all budget schedule amounts to the ne

How do you measure success in mobile access

What data would you find useful in making decisions about social media and mobile technology for organizations - How do you measure success in mobile access to information?

How each instruction strategy fit into the tpack framework

Explain how each instruction strategy and instructional technology device fit into the TPACK framework. Provide additional webpages, journal articles, and videos that the teac

What purpose does culture serve for an organization

What purpose does culture serve for an organization? Describe the Mayo Clinic's culture from the perspective of espoused values and enacted values. Using the perspective of th


Write a Review

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd