In: Business and Management

Submitted By kaichen0604
Words 419
Pages 2
Siemens case
Team members: Kai Chen, Boqian Sun, Zelin Meng

1. What is the traditional (using the old costing system) cost of an order of one motor of type C (type C motors have 1 base motor and 3 special components)?

For the traditional cost of an order of one motor of type C, we can solve it based on Exhibit 4. According to the Exhibit 4, we have that the cost of base motor is DM247, and the 3 special components would be 32.2*3=96.6. Thus, the total manufacture cost would be 343.6. On the other hand, in the case we can find that the support related overhead is equal to 35% of manufacture cost, thus the support related overhead would be 343.6*.35=120.26. The total cost of an order of one motor of type C would be 343.6+120.26=463.86 or 464.

2. After changing the allocation method to the PROKASTA system, what is the cost of an order of one motor of type C? According to the case, under PROKASTA system, the coast of the base motor from which the customized product was derived and the cost of each custom component were calculated using the traditional cost system but with the new smaller support- related cost pool. Thus, in Exhibit 4, we can find that the cost of one motor of type c is equal to cost of bas motor plus cost of all special components. That is DM304+DM118.8=DM422.8 or 422. Besides, we also should add the order processing cost which is equal to 13800000/65625=210.28, and the special component handling which is equal to: 19500000/325000=60. All in all, the cost of an order of one motor of type C is equal to 422+210.28+60*3=812.28

3. If the order contained 10 type C motors, what is the cost per unit using the PROKASTA system? According to our calculation in question 2, we got cost of one motor of type C is 422.8. When we order contained 10 type C motors, the total cost should be 422.8*10+ the fixed cost (Order processing cost +…...

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