Individual Case Study

Each student is required to analyse and prepare a write-up to the assigned case study on an individual basis. You must complete the case study write-up addressing both parts (A and B as detailed below) and submit by the due date following the submission requirements outlined in the course profile (and also provided below).

Part A (800 words) (8.5 marks)

You need to address the following questions in your case study write-up for the Seimens Electric Motor Works A case:

1. Briefly describe the competitive environment in which Seimens operates, and how its products, processes and strategy have changed. (1 mk)

2. Describe in detail how the old cost system operates. Your answer should include a detailed description of how all costs are treated. (1 mk)

3. Describe Seimens’ product mix and discuss the opportunity/opportunities faced by Seimens in relation to changing the cost allocation system. (1 mk)

4. Describe in detail how the new cost system works and how it differs from the old cost system? Your answer should include an analysis of the calculations of the overhead costs for the base and special components motors in Exhibit 4, a description of the each of the steps and their importance in the new cost system. (you may need to consider Exhibit 3 as well) (1.5 mks)

5. Calculate the cost of the 5 orders in Exhibit 4 under the traditional costing and new cost systems (hint: first calculate the cost under the new system and think about the differences between the systems considered in question 4 above). What do you notice? (1.5 mks)

6. Calculate the traditional and new costs for each order if 1 unit, 10 units, 20 units or 100 units respectively, are ordered in each order. Graph the product costs against the volume ordered. What do you notice? (1.5 mks)

7. Does the new system