Allocation Problem Research Paper Example | Topics and Well Written Essays - 500 words

Allocation Problem - Research Paper Example I would, therefore, create a report on cost allocation based on certain estimations after analyzing Dell’s gross margin from income statements (Dell Financials, 2010). In Desktop PCs category, the main inputs include motherboard, processor, peripheral devices (keyboard and mouse), monitor, hard disks, DVD ROM, RAM, power supply, power buttons, speakers, outer casing, internal and external wire connectors, modem, LAN and 3D-graphics cards etc. The Desktop PCs category could be divided into departments such as purchases, component production, fitting and hardware installation, software installation, administration, inventory maintenance, after sales services (warranty expenses), wastage, breakage, pilferage etc. The costs will be allocated to each department after calculation of direct labor and direct material. Manufacturing Overheads will include indirect labor and material, while, the supporting expenses will include rentals, insurance, depreciation and amortization, advertis ing and marketing, general administrative and others etc. followed by miscellaneous expenses (Ross 2009); (Grover, 2010).