|
|
This is only a preview of the paper
Click here to register and get the full text.
Existing members click here to login
|
|
|
Kanthal Case Study Solutions
INTRODUCTION:
Kanthal is company that specializes in the production and sales of electrical resistance heating elements. Kanthal has about 10,000 customers and they produce about 15,000 items. The company consists of three divisions and these three divisions are as follows:
1)Kanthal Heating Technology - 25% global market share
2)Kanthal Furnace Products - 40% global market share
3)Kanthal Bimetals - Manufacturer of one of the few fully integrated temperature control devices
Mr. ... With this new information, Kanthal plans to redirect its resources to customers with hidden profits and reduce efforts that are focused on customers with hidden losses. ...
Answer 1:
Under the old costs system, Kanthal management felt that selling and administration costs were fixed costs, and as a result they could not be changed, manipulated, or utilized to influence growth or profitability. Traditionally, Kanthal had considered S&E expenditures to be period costs and were expensed in that manner rather than allocating them to the various product lines and customers. ...
Question 2:
Evaluate the approach taken at Kanthal to compute the profit of individual orderliness, including assigning S&A costs to each customer order. ...
Kanthal management should not necessarily decline the orders for non-stocked items; rather they should charge a healthy premium for them. ...
CONCLUSION:
Kanthal should take measures to minimize costs that are associated with the non-stocked items. The case does not show any evidence of Kanthal attempting to reduce cost activities. ... Also, Kanthal needs to focus their sales on the percent profit margin or the true bottom line contribution of each order to the company.
Approximate Word count = 1235
Approximate Pages = 4.9
(250 words per page double spaced)
|
|
|
|
|
|