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The absence of data representing the number of units of production, added more confusion.
Cost Drivers: Bridgton used direct labor costs for each product as a % of total labor cost as the primary cost drivers based on the strategic analysis input from the Consultants during 1986-87. Perhaps the Consultants used the historic data (mostly collected well before 1985-86, while a large proportion of the production jobs were carried out manually) which are no more valid after 1987-88 due to a change in market condition and demand...
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Perhaps the Consultants used the historic data (mostly collected well before 1985-86, while a large proportion of the production jobs were carried out manually) which are no more valid after 1987-88 due to a change in market condition and demand. The system (of calculating overhead costs as 435% of direct labor) worked in favor of net and gross profits while hardly there were any operational and resource allocation changes (FY 1986-87 and 1987-88)...
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