John Deere Component Works A
Excel Calculations
Standard Costing Method for PART 103
ABC Costing Method for PART 103
Questions Covered
1. How did the competitive environment change for the John Deere Component Works between the 1970’s and the 1980’s?
2. What caused the existing cost system to fail in the 1980’s? What are the symptoms of cost system failure?
3. How were the limitations of the existing cost system overcome by the ABC system?
4. Compare the cost of Product A103 (see Exhibit 11) under the existing cost system and under the ABC approach.
Replies