This case is based on the case (UV1730). Marlene Baer, controller Breeden Electronics, recognizes that grouping all the overhead costs of production and distribution together their Breeden in the two products is not very accurate. It groups overhead activities and then distributes them to the two products. System resembles a simple activity-based costing system. This is the second in a series of three cases, which can be used to study the evolution of the system cost. The main issues of the three cases are as follows: in the case, the company uses traditional costing system. Key issues related to the break-even analysis and stockpiling effect on profits. If you input the definition of activities, the cost of these measures, and the cost of computing products based on their use of activities. Revised cost of the product is not much different, but analyzing what is important to detect differences where ABC can provide valuable information. Case C (UV1734) occurs after the end of the year, when profit was reduced by the need to take care of a growing and increasingly complex packing and shipping activities. The controller determines a new activity (order processing), calculates the cost of the order, and begins to review data on the cost effectiveness and the development of new data on customer profitability. Finding the high cost of processing each order, the controller now has every reason to work on the activity-based management: to make the process more efficient, and perhaps more friendly to the customer. Three cases can be used in three classes, or A and B cases together in one class and the case C in second grade. "Hide
by Luann J. Lynch Source: Darden School of Business 6 pages. Publication Date: May 03, 2010. Prod. #: UV1732-PDF-ENG
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