Wilkerson Company Case Analysis Questions 3, 4, and 6

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Answer the following:

3. Estimate product costs for valves, pumps, and flow controllers using ABC for overhead activities (primarily Ex. 1 & 4) and direct cost data from the Exhibits.

4. Compare ABC costs to the standard unit costs (Ex. 2). Explain what causes such different results; be specific – use data from the case and your calculations. Hint: examine both the methods and the product characteristics.

6. What are the strategic implications of your analysis? What specific actions do you recommend to Wilkerson’s managers? What are the financial implications of your recommendations?

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