Global Electronics
INTRODUCTION The purpose of this case is to allow the reader to identify the behavioral variables that can determine the success of implementing an ABC system. There are several case studies that have been performed to examine technicalities in regards to ABC models and how profitability can be determined by the product, customer, or service. This case study focuses on how behavior can impact implementation because of the evidence that ABC has had high implementation failure rates and these failures have occurred mainly due to behavioral variables. We will discuss the background of Global Electronics, Inc. and their situation and then we will expand upon the signs that reveal that a costing system is not supporting management decision making. We will discuss the differences between traditional volume-based cost systems and ABC systems in terms of their ability to support decision-making in addition to the steps related to designing an ABC model.
BACKGROUND Global Electronics, Inc. (GEI) is headquartered in Sarasota, Florida. The company designs, manufactures, and markets power semiconductors and analog, digital, mixed-signal, and radiation-hardened integrated circuits for signal-processing and power-control applications. The products that Global Electronics produces are used in several functions such as antilock braking systems, air-bag systems, computer keyboards, modems, disk drives, and cell phones. In layman’s terms, GEI produces a variety of electronic goods such as power and logic commodity products to analog and digital specialty products. Global Electronics has three fabrication facilities located in the U.S. that employs a total of 2,300 people and the company also employs 4,000 employees at an assembly and test facility located in Malaysia. There are two phases to the manufacturing process that GEI uses as alluded to above: fabrication as well as assembly and test. Fabrication has four main processing procedures including
BACKGROUND Global Electronics, Inc. (GEI) is headquartered in Sarasota, Florida. The company designs, manufactures, and markets power semiconductors and analog, digital, mixed-signal, and radiation-hardened integrated circuits for signal-processing and power-control applications. The products that Global Electronics produces are used in several functions such as antilock braking systems, air-bag systems, computer keyboards, modems, disk drives, and cell phones. In layman’s terms, GEI produces a variety of electronic goods such as power and logic commodity products to analog and digital specialty products. Global Electronics has three fabrication facilities located in the U.S. that employs a total of 2,300 people and the company also employs 4,000 employees at an assembly and test facility located in Malaysia. There are two phases to the manufacturing process that GEI uses as alluded to above: fabrication as well as assembly and test. Fabrication has four main processing procedures including