SIEMENS EMW (A) PROCESS – ORIENTED COSTING The case brings out the fact that traditional cost accounting methods are misleading where there is diversity in the no of products manufactured. The case highlights the importance of Process-Oriented Costing approach. The cost structure of the firm suggests that the production related and support related overheads form 33.0 and 26.0 percent of total costs. Since the firm manufactured almost 10,000 different types of motors, allocation of support related
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Siemens Electric Motor Works Ten years ago our electric motor business was in real trouble. Low labor rates allowed the Eastern Bloc countries to sell standard motors at prices we were unable to match. We had become the high-cost producer in the industry. Consequently, we decided to change our strategy and become a specialty motor producer. Once we adopted our new strategy, we discovered that while our existing cost system was adequate for costing standard motors, it was giving us inaccurate
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Background of Siemens Corporation, focused on EMW Siemens Corporation, one of the world largest corporations, specializes in electrical and electronic products. Electronic Motor Works (EMW) is a part of Energy and Automation group, which is one of 7 major groups of Siemens Corporation. It had a wide range of production which contained 200 different types of motors and produced approximately 230,000 motors annually. The standard A/C motors took 80% volume of sale and the rest 20% was from customized
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Source: http://www.allbusiness.com/accounting-reporting/methods-standards-cost-accounting/498244-1.html#ixzz1nMWBS5qI By Juras, Paul E. ABSTRACT Descriptions of activity-based-costing (ABC) systems have become a standard part of managerial accounting texts. While ABC implementation issues are the focus of a number of articles, these issues are often not addressed in a typical textbook. This case is designed to familiarize you with the behavioral and technical variables that can aid or impede
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