Solution-Implications of the change in the structure of

Implications of the change in the structure of manufacturing

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Reference no: EM132418484

Problem: Rolls Royce's cost structure includes a high cost of direct labor and indirect costs are usually allocated with a single allocation rate. However, the LEGO cost structure includes a low cost of direct labor, but requires greater attention to overall costs.

Required:

Question 1: What are the implications of the change in the structure of manufacturing costs caused by the use of technology and robotics in the allocation (estimate) of general costs?

Question 2: Assuming that LEGO decides to use a single rate of allocation of its indirect costs, which cost cause (cost driver) would be the most obvious to recommend?

Question 3: Assuming Rolls Royce decides to use a single rate of allocation of its indirect costs, which cost cause (cost driver) would be the most obvious to recommend?

Each of the answers has to be explained more broadly, preferably with several paragraphs.

Reference no: EM132418484

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Implications of the change in the structure of manufacturing

Reference no: EM132418484

Reference no: EM132418484

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