Destin brass case. Destin Brass Case Essay example 2022-10-17
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Destin Brass Products Company is a small manufacturing firm that produces brass fittings for use in the plumbing industry. The company was founded by John and Mary Smith, who have been running the business for the past 20 years. Despite the company's success, it is facing a number of challenges that threaten its future growth and profitability.
One of the main challenges facing Destin Brass is intense competition from larger, more established companies in the industry. These competitors have significantly greater resources and economies of scale, which allow them to offer lower prices and more diverse product lines. As a result, Destin Brass is finding it difficult to compete and is losing market share to its rivals.
Another challenge is the rising cost of raw materials, such as brass and copper. These materials are essential for the production of brass fittings, and their prices have been increasing steadily in recent years. This has put pressure on Destin Brass's margins, as the company has been unable to fully pass on the higher costs to its customers.
In addition, Destin Brass is struggling to keep up with changing customer demands and industry trends. The plumbing industry is constantly evolving, and the company has not been able to adapt quickly enough to new technologies and customer preferences. As a result, it has lost market share to companies that are better able to meet the changing needs of their customers.
To address these challenges, Destin Brass has implemented a number of strategies. The company has been working to reduce its reliance on raw materials by developing more efficient production processes and seeking out new suppliers. It has also been investing in research and development to develop new products and stay ahead of industry trends. In addition, Destin Brass has been working to improve its marketing and sales efforts to better reach and retain customers.
Despite these efforts, the company's future remains uncertain. It is likely that Destin Brass will continue to face significant challenges in the coming years, and it will need to be proactive and innovative in order to remain competitive and successful. If it can successfully navigate these challenges, however, the company has the potential to continue growing and thriving in the dynamic and challenging plumbing industry.
Destin Brass Products Co Case Study Solution
Destin Brass Products Co presently has more than 500 factories around the world and a network spread across 86 nations. Destin Brass was the sole supplier of valves but did not have any specialization in this product. This indicates that the inaccurate costing allocation can lead to either over or under pricing. Note: All the above analysis is done on the basis of computations and Graphs given up the Exhibits D and E. So any disbursal incurred of a merchandise is straight charged to that peculiar merchandise instead than distributing the disbursal over all the merchandises. Therefore, it was widely accepted that there was a high correlation between direct labor and the incurrence of overhead cost. Currently the present cost accounting system that is being used at CUH takes the total direct cost of the departments, then allocates the indirect costs and distributes it among the departments evenly regardless of the actual resources being used in those departments, and without considering that there may be some patients in these divisions that may require more resources than others, this method does not seem to recognize the different activities, Case Study: The Ok Tedi Copper Mine 705 Words 3 Pages The Ok Tedi Copper Mine Define the main forms of pollution and resource depletion and identify the major problems associated with each form.
See table 3 for inside informations. It also wishes to encourage individuals to live a healthy life. Comparing the ABC with the standard and the revised unit costs In this comparison, it will appear the cost of each product under the three types of costing calculation methods and the reason why they are different. Firstly the direct costs, consisting of the direct manufacturing costs and the run labor costs, and secondly the indirect costs, consisting of the machine usage costs or depreciation and the overhead costs. The country is investing more on acquisitions and mergers to support its NHW strategy. Table 2 shows the comparing. This allows overhead costs to be allocated more directly to differ.
Destin Brass Products Co. Case Study, Sample of Business plans
The mate Arial related overhead is determined by dividing the material related overhead by t he total material costs, generating a material overhead rate in this case of 48%. The increasing risk of financiers with increasing debt ratio and decreasing share costs can be observed by huge decline of EPS of Destin Brass Products Co stocks. Allowing us to accurately allocate the overhead costs. A brief summary of TWOS Analysis is given up Exhibit H. In the following month, quantities produced and sold, activities, and costs were all standard. In Destin Brass case, the company tried to establish a high brand name for producing the valves, but later as an expansion to the business, the company included two new product lines which are the pumps and the flow controllers keeping in mind the similarities of productions and the availability of the productions capacity.
In which the overhear allocated to a material overhead and another overhead base, based on the m aching hours, as well as accounting for the set up labor costs for every run. There is need to further increase prices of Flow Controller. Here, assuming that the quantities of the productions and the sales, inventory, selling prices stay the same, and the prices of material, labour, handling remains the same. Harvard Business Case Studies Solutions - Assignment Help Destin Brass Products Co. Strategies to use strengths to overcome threats Business should transfer to not just developing but also to developed nations.
It would supply the business a strong long term market position in regards to the company's general wealth as well as in regards to innovative products. Would you outsource manifolds from the ACF in 1991? Strategic deductions of the fiscal analysis Harmonizing to Bhimani et La 2008 , extremely competition concern environment requires a comprehensive costs understanding, and a proper costing scheme is indispensable to ease determination doing. Business has established substantial market share and brand identity in the city markets, it is suggested that the company must focus on the rural areas in terms of developing brand loyalty, awareness, and equity, such can be done by producing a particular brand name allocation method through trade marketing strategies, that draw clear distinction between Destin Brass Products Co items and other competitor items. This product was giving them more profits than the other products and had more than the standard gross margin of 35%. The material and handling costs are treated in a separate way, but not the best cost driver had been chosen direct material dollars , as it would be seen in the ABC. Currently, the company uses a company-wide predetermined overhead OH rate but is considering using departmental OH rates in the upcoming year. As mentioned by Peggy Alford, this gives an idea why competitors are cutting prices on pumps.
Additionally, as a result of the corrosion resistant properties, 316 Stainless Steel is suggested in environments that entail chemical usage like textile processing equipment and marine atmospheres. Destin Brass Cost Activity Analysis 1. You can use the following strategy to organize the findings and suggestions. . Step 4 - SWOT Analysis of Destin Brass Products Co. In Destin Brass case, the company tried to establish a high brand name for producing the valves, but later as an expansion to the business, the company included two new product lines which are the pumps and the flow controllers keeping in mind the similarities of productions and the availability of the productions capacity. Under Full Cost Method, all property acquisition, exploration and development costs, even dry.
It was established by Harvard in 1866, a German Pharmacist who initially introduced "FarineLactee"; a mix of flour and milk to feed infants and decrease death rate. The direction is in demand to reconsider its fiscal scheme in order to face competition. Destin Brass is an ideal example of how vital is to have an accurate costing method to follow to provide strategic decision making. In competition with other companies, with an objective of retaining its trust over customers as Business Business has actually acquired more relied on by clients. Once you finished the case analysis, time line of the events and other critical details.
Destin Brass Products Co. [10 Steps] Case Study Analysis & Solution
The target of the business is not accomplished as the sales were expected to grow greater at the rate of 10% per year and the operating margins to increase by 20%, given in Display H. These objectives and objectives are noted below. Destin Brass Products Co Conclusion It has actually institutionalised its techniques and culture to align itself with the market changes and consumer behavior, which has eventually enabled it to sustain its market share. . Bruns, 1997, exhibit 3 This causes the pumps to appear rellativly expensive in comparison to the other products because this product is rellatively labor intense. The material related overhead is determined by dividing the material related overhead by the total material costs, generating a material overhead rate in this case of 48%.
DESTIN BRASS PRODUCTS CO. Case Study Solution for Harvard HBR Case Study
Conclusion The costing methods used to identify the strengths and weakness of the business performance helps management to decide whether operations require any improvements. Creating a cost pool for engineering costs by calculating how much engineering is consumed by each product. This is where ABACA costing differs from the other costing methods, the overhear ads are allocated proportionately to the cost drivers of each activity cost pool. In the meeting, Peggy Alford was trying to convince the other two partners to use the modern approach of costing. The flow controllers require more labor than the valves and pumps but it is not reflected in the revised method as flow controller does not have enough overhead associated with the labor. Activity-based costing would be the most accurate method to understand the manufacturing process and costs of the product.
Destin Brass Products Co. Case Study Free Essay Example
Moreover, company should analyze the market demand and supply to understand the most applicable profit margin. No such impact as it is good. Total overhead cost of the flow controller is 288,685 whereas the over head cost of pumps and valves are 260,887 and 113,116. The third recommendation is that Destine BRB ass should consider is decreasing the amount of transaction of the flow controllers. This sluggish development also impede company to additional spend on its mergers and acquisitions. The differences in cost can fundamentally be attributed to the difference in accounting methods. What causes the different product costing methods to produce such different results? Often history is provided in the case not only to provide a background to the problem but also provide the scope of the solution that you can write for the case study.