K-Swiss Inc. Allocated Costs K-Swiss Has Operations Essay

K-Swiss Inc. Allocated Costs

K-Swiss has operations on numerous continents with multi-level departmental responsibilities for product and brand management. K-Swiss (2010) divisions create and manage product and thus acquire allocated costs associated with the manufacture and sale. "Adidas and Reebok -- and to a lesser extent New Balance and K-Swiss saw big increases in orders from Foot Locker, Adidas, Reebok and K-Swiss all report robust sales and big increases in their Foot Locker business..." (Retail Top 100, 2003)

As such, these divisions facilitate orders to retail outlets for sale of product. The K-Swiss sneaker division, for example, has an allocated cost for materials, machinery, technology, and labor necessary to manufacture a set number of sneakers. Under many circumstances, these variables are simply called capital and labor. However, for the purposes of cost allocation at the departmental level, the importance of describing the specifics of the cost structure is critical to understanding the inputs needed and the yield on output of those same inputs.

The manufacture of K-Swiss sneakers yield the allocated costs listed as materials, which include (all costs are estimated) cotton $100, plastic $100, leather $1,000, rubber $700. Machinery $1,000,000 is also an allocated cost necessary to manufacture the sneakers on a production line. Technology $2,500 involves the computers and software that tracks…