Kanthal (A) - The Case Centre

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Prize winner

Case

Reference no. 9-190-002

Subject category: Finance, Accounting and Control

Authors: Robert S Kaplan

Published by: Harvard Business Publishing

Originally published in: 1989

Version: 27 April 2001

Length: 13 pages

Data source: Field research

Topics: Management accounting; Management; Cost accounting; Cost allocation; Cost systems; Financial management; Sales strategy; Customer relationship management

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Abstract

Multinational company needs an improved cost system to determine the profitability of individual customer orders. Its strategy is to have significant sales and profitability growth without adding additional administrative and support people. The new cost system assesses a charge to each customer order received and an additional surcharge if the item ordered is not normally stocked. The goal is to direct sales resources to the most profitable customers: those who buy standard products in large predictable quantities with minimal demands on technical resources.

Location:

Sweden

Industries:

Electronic components; Wire & cable

Size:

USD160 million sales

Other setting(s):

1987