Auerbach Enterprises

Robert Baca

BUS630: Managerial Accounting

Prof. Anthony Perez

September 9th 2013

Auerbach Enterprises

Introduction

Auerbach Enterprises manufactures air conditioners for automobiles and trucks manufactured throughout North America. The company has two main products MaxiFlow and Alaska. MaxiFlow uses a few complex fabricated parts that have been found easy to assemble and test while Alaska uses standard parts that have a complex assembly and testing process. MaxiFlow requires direct materials costs, which total 135 per unit, while Alaska's direct materials requirements total 110 per unit. Direct labor costs per unit are 75 for MaxiFlow and 95 for Alaska. Auerbach uses machine hours as the cost driver to assign overhead costs to the air...