Subject category:
Finance, Accounting and Control
Published by:
IESE Business School
Version: 11.2014
Revision date: 20-Feb-2015
Share a link:
https://casecent.re/p/10044
Write a review
|
No reviews for this item
This product has not been used yet
Abstract
The case is intended to illustrate the use of flexible budgets in manufacturing settings, for overhead control and performance evaluation purposes. A simple situation in a cost center is presented, and an explanation of cost behavior is provided, where different overhead items may vary with different variables. Possible interaction betweendirect labor inefficiencies and different overheads (indirect labor, energy use, scrap, and so on) should be taken into account. The reader is asked to analyze the performance of the cost center, through several specific questions.
About
Abstract
The case is intended to illustrate the use of flexible budgets in manufacturing settings, for overhead control and performance evaluation purposes. A simple situation in a cost center is presented, and an explanation of cost behavior is provided, where different overhead items may vary with different variables. Possible interaction betweendirect labor inefficiencies and different overheads (indirect labor, energy use, scrap, and so on) should be taken into account. The reader is asked to analyze the performance of the cost center, through several specific questions.