John Deere Component's Works

The following report is a consultation analysis of John Deere Component Works costing structure. Included is a discussion of the existing cost system as well as a comparison with the proposal of the Activity Based Costing system. The solutions to the required discussion issues have been thoroughly prepared and are hereby included.

Problem Statement:

The demand for John Deere Component Work’s (JDCW’s) products has suffered due to the collapse of farmland value and commodity prices. A number of continuous failures in JDCW’s competition for bids have placed an onus upon management to question its current costing methods. As a result, an analysis must be made regarding the current costing methods in order to determine their validity and to aid the company in adopting a more sound costing system.

Analysis
John Deere Component Works was a subdivision of John Deere and Company which dealt exclusively with the manufacturing of tractor component parts. By the mid 1980’s, ...