Hydrochem, Inc. produces only one product – condutronic plates. The company uses an actual costing system but is considering switching to a standard costing system. The production costs consist of raw materials, direct labor and manufacturing overhead costs, and the company uses absorption costing. Students will be provided with account balance information at the beginning of the month and the company with information about events and transactions during the month. Students are asked t … Read more »

Hydrochem, Inc. produces only one product – condutronic plates. The company uses an actual costing system but is considering switching to a standard costing system. The production costs consist of raw materials, direct labor and manufacturing overhead costs, and the company uses absorption costing. Students will be provided with account balance information at the beginning of the month and the company with information about events and transactions during the month. Students are asked to prepare two income statements and balance sheets for the month at the end of the month. A set of financial statements is using the company’s costing system, and the other set of financial statements is to be costing using the proposed standard. Students are asked to explain the differences between these two types of financial statements and take a position as to which set of financial information that they prefer.
«Hide

from
E. Richard Brownlee II
Source: Darden School of Business
2 pages.
Release Date: 6 September 2004. Prod #: UV1743-PDF-ENG
Hydrochem, Inc. HBR case solution