Case Study - Wilkerson Company By Robert S. Kaplan
Please answer the 3 questions below. Two pages.
1. Develop and a diagram an activity-based cost model using the information in the case. Provide your best estimates about the cost and profitability of Wilkerson's three product lines. What difference does your cost assignments have on reported product costs and profitability? What causes any shifts in cost and profitability?
2. Based on your analysis for Question 1, what actions might Wilkerson's management team consider to improve the company's profitability?
3. What concerns, if any, do you have with the cost estimates you prepared in the answer to Question 1? What other information or analysis would you want for better cost and profitability estimates?