Weihai-Daewoo Electronics Co, Ltd

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Case

Reference no. 9B01B032

Subject category: Finance, Accounting and Control

Authors: Murray J Bryant (Ivey Business School, Western University); Stone Chen (Ivey Business School, Western University)

Published by: Ivey Publishing

Originally published in: 2001

Version: 2002-03-20

Length: 9 pages

Data source: Field research

Topics: Cost allocations; Costs; Pricing; Pricing strategy

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Abstract

Weihai-Daewoo Electronics Co, Ltd, a joint venture between a Chinese company and Daewoo Electronics Co, Ltd, of Korea, is one of the leading colour monitor manufacturers in China. The company has the opportunity to secure new business through an open bidding process. However, the price asked for is lower than Weihai-Daewoo's cost of production using the full-cost method. The company needs the business and the chief executive officer believes that a long-term relationship could be profitable. He must decide whether to accept the order and examine the company's cost calculation system. There is a simplified Chinese version available '9B01BC32'.

Location:

China

Industry:

Electric and electronic equipment supplies

Size:

Medium

Other setting(s):

2000