Solved Case Analysis: Breeden Electronics C by Luann J. Lynch

0.00$

Get the Best Analysis to this Case Study written by MBA/CFA writers.

**Solution would be delivered to your registered email address within next 4 days. If you want the solution any earlier drop an email at assignment@writerkingdom.com.  Click Here to see how it works

Compare

Description

In 2000, Breeden Electronics USA sold fewer RC1 units and more RC2 units than they had expected. Sales of RC2 units were to 18 mail-order companies that required special attention (more than required by the RC1 customers). This attention incurred unexpected costs. Marlene Baer, the controller, prepares an estimate of these unexpected costs, which shows that profit was below target. It is clear that serving the mail-order business has turned out to be very different from serving the garage-door manufacturer. The mail-order business (and probably some of the mail-order customers) drives activities (and, in turn, costs) in ways that are different from the garage-door business. Students must prepare revised cost estimates by product, estimate profitability by customer, and use their estimate to make recommendations to increase profitability. This is the third of a series of three cases that can be used to explore the evolution of cost systems. The main issues of the three cases are as follows: in the A case (UVA-C-2199), the company uses a traditional costing system. The main questions relate to breakeven analysis and the effect of inventory buildup on profit. The B case (UVA-C-2200) introduces the definition of activities, costing those activities, and computing product cost based on their use of the activities. The revised product costs are not dramatically different, but analyzing what causes the differences is important to discovering where ABC can provide valuable information. The C case takes place after the end of the year, when profits have been reduced by the need to take care of a growing and increasingly complex packing and shipping activity. The controller defines a new activity (order handling), computes the cost per order, and begins to revise the data on product profitability and to develop new data on customer profitability. Having discovered the high cost of handling each order, the controller now has good reason to work on activity-based management: making that process more efficient, and perhaps more customer friendly. The three cases can be used in three classes, or the A and B cases together in one class and the C case in a second class.

Publishing Authority:

Darden Business Publishing – University of Virginia

Reviews

There are no reviews yet.

Be the first to review “Solved Case Analysis: Breeden Electronics C by Luann J. Lynch”

Your email address will not be published. Required fields are marked *