Semester 2, 2011
Individual Case Study
(Weight: 10% of Final Grade)
Due Date for submission: 4pm Friday 2nd September, 2011
Each student needs to complete a case study write-up and submit by the due date following the submission requirements outlined in the course profile (and provided below).
Students need to address the following questions in their case study write-up for the Kanthal A case:
1. Describe the competitive environment in which Kanthal operates.
2. Describe in detail how the old cost system operates. Your answer should include a detailed description of how selling, general and administrative (S,G & A) costs are treated.
3. What is the opportunity faced by Kanthal in relation to reducing batch costs?
4. Describe in detail how the new cost system works. Your answer should include a detailed analysis of the calculations in Exhibit 5 and a description of the each of the steps and their importance in in the new cost system. Within each of the steps, the derivation of the separate line should be shown.
5. Calculate the profit on the following orders using information from Exhibit 5. The characteristics of the orders are:
• Order 1: Sales SEK2000, 1 order, In stock
• Order 2: Sales SEK2000, 1 order, Non Stock
• Order 3: Sales SEK160000, 3 orders, Non Stock
• Order 4: Sales SEK160000, 28 orders, 22 Non Stock
All of your calculations are to be derived from Exhibit 5. This includes Volume Costs, Order costs for Non-Stocked Products and Selling and Administrative Order Costs. What does a comparison of the orders show? From Exhibit 6 and Exhibit 7 provide an example which matches closely to the four orders above.
6. What are some action plans that Kanthal might pursue in response to information provided from the new cost system?
Case Write-up Requirements:
Your case write-up should consist of