Auerbach Enterprises Manufacturers Essay

In today’s very competitive business environment, it is imperative that organizations choose the most appropriate and effective overhead rate, particularly, because it guides management in its tasks of product pricing, job costing, and budgeting. Businesses can use the single company-wide method or can opt for the departmental method. Auerbach Enterprises manufactures air conditioners for many makes of both automobiles and trucks. The two main products are MaxiFlow and Alaska. Currently, the company uses a company-wide predetermined overhead (OH) rate but is considering using departmental OH rates in the upcoming year. Company-wide OH rates allocate expenses across the entire enterprise. This rate is figured by dividing the total cost of overhead by cost drivers common throughout each department. According to Schneider (2012), â€Å"Department OH rates are calculated for each separate department by dividing the total department overhead budgeted by the budgeted amount of comm on cost drivers within the department† (p. 3.3). Moreover, Auerbach Enterprises is trying to make a determination as to whether it would be more appropriate to use the company-wide predetermined overhead rates, or whether it would be more appropriate to switch to using departmental overhead rates. As such, this paper will be making calculations to determine the most appropriate overhead costing rate method; according to Brunton (1998): The easiest method is to apply the plant-wide, or blanket rate. Parts are valued at a proportionate share of indirect costs according to some predetermined base. One disadvantage of this method rises when production processes differ significantly for different parts.  Parts processed in departments that have low overhead expenses are valued and priced proportionately the same as parts produced in departments with high overhead expenses. A second disadvantage is that all parts do not necessarily carry a portion of indirect cost as part of their value because one base is used in the allocation process (p. 22). Further, a determination should be made concerning whether one product is affected more than the other by using departmental rates rather than a company-wide rate. Computation of departmental OH rates using machine hours as the cost driver. Department OH Costs / Machine Hours = Department OH Rate Radiator parts fabrication $80,000 /10,000 = 800% Radiator assembly, weld, and test 100,000 /20,000 = 500% Compressor parts fabrication 120,000 /5,000 = 2400% Compressor assembly and test 180,000 /45,000 = 400% Total 480,000 80,000 4100% Computation of company-wide overhead rate using machine hours as the cost driver. Company-wide OH cost = 480,000 Total machine hours =80,000 Company-wide OH rate 480,000/80,000 = 6.00 AUERBACH ENTERPRISES 4 Computation of the overhead costs per batch of MaxiFlow and Alaska assuming: (a) The company-wide rate (b) The departmental rates. Maxiflow 6.00 x 116 = 696Alaska 6 x 164 = 984 a) MaxiFlow 696/20 = 34.8Alaska 984/20 = 49.2 b) MaxiFlow 1246/20 = 62.3Alaska 954/20 = 47.7 Departmen MaxiFlow hours Department OH rate Department cost Radiator parts fabrication 28 x 8.00 = $ 224.00 Radiator assembly weld and test 30 x 5.00 = 150.00 Compressor parts fabrication 32 x 24.00 = 768.00 Compressor assembly and test 26 x 4.00 = 104.00 Total 116 41.00 1,246.00 Department Alaska hours Department OH rate Department cost Radiator parts fabrication 16 x 8.00 = $ 128.00 Radiator assembly weld and test 74 x 5.00 = 370.00 Compressor parts fabrication 8 x 24.00 = 192.00 Compressor assembly and test 6 x 4.00 = 264.00 Total 164 41.00 954.00 Computation of the OH costs per unit of MaxiFlow and Alaska assuming: (a) The company-wide rate & b) departmental rate. MaxiFlow Departmental Rate Company-wide Rate Direct materials $ 135.00 $ 135.00 Direct labor $ 75.00 $ 75.00 Overhead 62.30 34.80 Total unit costs 272.30 244.80 Alaska Departmental Rate Company-wide rate Direct materials $ 110.00 $ 110.00 Direct labor 95.00 95.00 Overhead 47.70 49.20 Total unit costs 252.70 254.20 Is one product affected more than the other by use of departmental rates rather than a company-wide rate? Why or why not? Indeed, the ability to remain competitive lies in how well a company implements cost-cutting solutions within its organization. Accordingly, based on the total unit cost, MaxiFlow appears to be affected more than Alaska by using the departmental rate. Using a company-wide OH rate is better suited for an enterprise that manufactures a single product. Since Auerbach has multiple departments and manufacturing sections, a more accurate overhead rate can be calculated using the departmental OH rate method. Additionally, it is very interesting, and no less compelling that company such as this uses machine hours instead of direct labor as the cost driver to assign overhead cost; this, in and of itself strongly suggest that it is a company which the majority of its manufacturing is done by machine and not by physical labor. This is expressed by Novin (1992) in the following excerpt; he states: Direct labor no longer may be the most effective base for applying factory overhead costs to various jobs and products. With today’s highly automated systems, labor-related costs constitute only a small portion of total manufacturing costs, and overhead costs now correlate more with factors such as machine hours and material quantities. Accordingly, many companies are beginning to identity application bases that better reflect the causes of overhead costs in their unique manufacturing environments (p. 40). Indeed, regardless of whether a company opts to use the company-wide overhead rate, or the departmental overhead rates, the effectiveness of those various systems, to a large extent, depends on the type of organization that utilizes them. This is expressed by Boer & Jeter (1993), wherein they state, â€Å"†¦manufacturing cost structures have been changing slowly over time, but sufficient variation across industries exists in the extent and nature of the changes to suggest that no single approach to structuring cost accounting systems is likely to be optimal for all industrial organizations or sectors† (pp. 5, 61). In  conclusion, Auerbach compiled planning information in an attempt to determine if it would be beneficial to change from a company-wide predetermined overhead rate to a departmental overhead rate. This is important because choosing the most appropriate rate helps management in the budgeting, job costing, and product pricing process. Essentially, it all amounts to the bottom line of a company choosing the method that provides the most accurate results for its business success. References Boer, G., & Jeter, D. (1993). What’s new about modern manufacturing? empirical evidence on manufacturing cost changes. Journal of Management Accounting Research, 5, 61. Retrieved from http://search.proquest.com/docview/210171196?accountid=32521 Brunton, N. M. (1988). Evaluation of overhead allocations. Management Accounting, 70(1), 22. Retrieved from http://search.proquest.com/docview/229737200?accountid=32521 Novin, A. M. (1992). Applying overhead: How to find the right bases and rates. Management Accounting, 73(9), 40. Retrieved from http://search.proquest.com/docview/229742735?accountid=32521 Schneider, A. (2012). Managerial Accounting: Decision Making for the Service and Manufacturing Sectors. Bridgepoint Education: San Diego, CA.

An Old Man’s Winter Night

An Old Man's Winter Night by Robert Frost All out-of-doors looked darkly in at him Through the thin frost, almost in separate stars, That gathers on the pane In empty rooms. What kept his eyes from giving back the gaze Was the lamp tilted near them in his hand. What kept him from remembering what it was That brought him to that creaking room was age. He stood with barrels round him†at a loss. And having scared the cellar under him In clomping there, he scared it once again In clomping off;†and scared the outer night, Which has Its sounds, familiar, like the roar Of trees and crack of branches, common things,But nothing so Ilke beating on a box. A light he was to no one but himself Where now he sat, concerned with he knew what, A quiet light, and then not even that. He consigned to the moon†such as she was, So late-arising†to the broken moon As better than the sun in any case For such a charge, his snow upon the roof, His icicles along the wall to keep; And sle pt. The log that shifted with a Jolt Once in the stove, disturbed him and he shifted, And eased his heavy breathing, but still slept. One aged man†one man†can't keep a house, A farm, a countryside, or If he can,It's thus he does it of a winter night. An Old Man's Winter Night is written by the American poet Robert Frost in 1916. He went through a lot of tragedies during the whole life. After experiencing the death his mother, his grandfather and his 2 children, the sense of helpness inevitably worked to shape and color the views of life's possibilities. It's unforeseeable for Frost to predict what will happen tomorrow so that he was called a poet who terrifies†. That's why the peotry is a mix of the calm and rural.The peaceful surface with an underlying darkness is an uncommon feature in this poetry. Symbolism Forst is representative of cold winter, â€Å"separate stars† showing hope and comfort of the mysterious and dangerous outer world at night. â€Å"ga thers on the pane†lmpersonate the forst to make the atmosphere warmer and more quiet. â€Å"cellar†, â€Å"branches†, â€Å"log fired†create some scaring sounds In the winter's night to emphasize the peaceful and lonely environment. The dark colours of these ugly and hard images snow tne repressed emotions. lamp† â€Å"Tire† make Teel warm ana peaceTul, Drlng llgnt to the dark and cold night to eliminate the feeling of scare. The poet tells us how he as â€Å"a light for no one but himself†, yet again confirms how isolated he is. Frost uses many different literary devices throughout the poem. Imagery which appeals to our sight, touch and hearing senses. Frost has used Imagery such as â€Å"In clomping there, he scared it once again† which appeals to our touch because you can almost feel how he has stomped the floor to try and frighten off the unknown.He has appealed to our hearing senses by using personification, â€Å"like the roar of trees† lets you almost hear how the trees were thrashing around on the cold winter night. Using contraries and ontradictions is another characteristic of this poetry. For example, the scaring sounds and the peaceful and quiet atmosphere make the old man feel more threaten and lonely. The warm light and fire in the room is on the contrary to the dark and cold winter to convey the scare of the unknown outer world of the old man. Also, Frost determinde to continue his old syle of using common, everday speech.It is simple to understand the superficial meaning of his poetry instead of the underlying theme. The poetry tells that an old man stands alone in his house in the middle of winter. His memory and legs crippled by old age ambles around his house without remembering who he was or even what he was doing. At one point, he becomes frightened by the cellar beneath his feet and the dark night outside, and he stomps his feet loudly to frighten away the unknown. Eventually th e old man dozes in front of the fire, after being disturbed by a shifting log, falls into a deeper sleep.The rural images like â€Å"forst† â€Å"cellar† â€Å"tree† â€Å"lamp† â€Å"moon† to convey his emotion of scaring and isolation. An Old Man's Winter Night creates a concrete view ofa lonely and amnesiac old man in the wooden house. I can see an old man who is trying to get away from the scaring environment and finally he succeed in sleeping beside the warm fire. An Old Man's Winter Night deals with the predicament of an old man who is dying on a cold winter's night. From the title of this poem, the reader might expect a warm and cozy narrative about an old man in front of a crackling fire.Frost denies this comforting expectation and instead creates a haunting narrative. What is the most scaring point is that the old man has lost his memory and it seems nonsense to exist in this world. But he still keep a house, a farm in the countryside. As to the emotion author wants to express, I think, it's relative to the life story of him. At that time, he still didn't sell his farm and enjoyed the life being a farmer in the countryside. However, the death of his children make him to imagine the future life in his old age.He is afraid that people will forget him and he will die by himself without accompanying by his children. This kind of depressed emotion influence the poem. The readers will find a poor old man struggling to prove his value to live. From my perspective, I feel merciful to the old man. He was place at the position of finding o clues to who and where he is. Maybe he is in his home but he cannot find the sense of belonging and he would like to risk for the dangers. He absolutely knows that the outer night is dangerous and he still goes out and talk to the moon.I can feel the old man is who really wants to get cares and love from other people but he cannot know what is going on. He is representative of the Frost and they are all want to escape from the scare of death and company. Obviously we can see from the poem, Frost treasured his country life and this kind of life really give him sparks in wrltlng poems mos OITTerent Trom tneme 0T otner Frosts poems, tney focus on the isolation from the modern society, on the contrary, this poem doesn's want to express this kind of meaning.http://www.studymode.com/essays/An-Old-Man's-Winter-Night-Analysis-1602199.htmlhttp://www.gradesaver.com/the-poetry-of-robert-frosthttp://www.english.illinois.edu/Maps/poets/a_f/frost/frost.htmhttp://www.english.illinois.edu/maps/poets/a_f/frost/oldman.htmhttp://www.english.illinois.edu/maps/poets/A_f/frost/fireice.htm

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Platonic Philosophy in Contemporary Culture Essay

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