CASES FROM MANAGEMENT ACCOUNTING PRACTICES Table of Contents Case 1: Case 2: Bal Seal Engineering Robin Cooper Bill’s Custom Planters William Stammerjohan Deborah Seifert Dublin Shirt Company Peter Clarke in assoc. with in assoc. with Paul Juras Wayne Bremser ECN.W William Lawler Endesa Gary M. Cunningham Scott Ericksen Francisco J. Lopez Lubian Antonio Pareja Kincaid Manufacturing Jon Yarusso Ram Ramanan Osram.NA John Shank Lawrence Carr William Lawler Pleasant Run Children’s Home Brooke E. Smith Mark A. McFatridge Susan B. Hughes University Bottom Line Enrico Uliana
Case 4: Case 5:
Editor’s Remarks I am pleased to present the nine teaching cases presented at the 2002 Conference of the Management Accounting Section of the American Accounting Association. These cases provide a wide range of topics and contexts for use in upper level undergraduate and MBA classes. Here is a list of the cases, authors and topics discussed. Bal Seal Engineering, by Robin Cooper, discusses alternative cost management approaches: traditional, ABC, and TOC. Bill’s Custom Planters, by William Stammerjohan and Deborah Seifert, discusses production and cash flow projections, developing pro forma statements and sensitivity analysis. Dublin Shirt Company, by Peter Clarke in association with Paul Juras and Wayne Bremser, discusses customer profitability analysis. ECN.W, by William Lawler, discusses ABC in a service organization. Endesa, by Gary M. Cunningham, Scott Ericksen, Francisco J. Lopez Lubian and Antonio Pareja, discusses strategy and control issues in a changing organization. Kincaid Manufacturing, by Jon Yarusso and Ram Ramanan, discusses supply chain management. Osram.NA, by John Shank, Lawrence Carr, and William Lawler, discusses economic value to customer and related life cycle costing issues. Pleasant Run Children’s Home, by Brooke E. Smith, Mark A. McFatridge, and Susan B. Hughes, discusses dealing with the financial condition of a not-for-profit organization.
University Bottom Line, by Enrico Uliana, discusses management control issues in a university. I thank these authors and all of the other authors who submitted cases to the conference. I also thank members of the editorial board for their help in reviewing cases: Tom Albright, Wayne Bremser, Paul Juras, Ken Merchant, Gary Sundem and, especially, Larry Carr and Jim Mackey. I am grateful to the other conference organizers, Steve Hansen, K. Sivaramakrishnan and Naomi Soderstrom for their advice and help. I am grateful for the help of Leslie Estelle at the IMA for her work in putting these cases into Management Accounting Quarterly. And on behalf of the members of the Management Accounting Section of the AAA, I thank the IMA for its support.
Bal Seal Engineering Company, Inc.
Peter Balsells and his late wife Joan founded Bal Seal Engineering Company, Inc in 1958. From humble beginnings, the firm grew steadily primarily based upon a strategy of selling the most innovative products in the industry. In particular, Bal Seal’s products were characterized both by the high value they provided and the technical manufacturing challenges they overcame. The initial invention that formed the basis for the firm’s success was a canted-coil spring in a polytetrafluoroethylene (PTFE) jacket (Figure 1). The advantage of the canted-steel coil spring, over a conventional one, was its ability to produce near uniform force over its operating range. In contrast, a conventional spring provided a linearly increasing force as deflection increased (Figure 2). This property of a canted coil spring was critical in ensuring both an effective seal and an extended operating life. The firm considered itself an industry leader and standard setter in providing customers worldwide with innovative solutions to their industrial sealing problems. The firm, over its 40-year life, had created in excess of 60 active patents and numerous other innovations...
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