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ME 2605 -Performance and Cost analysis AMRISH GUPTA LI HONG RAMESH KHANAL XIONG JIE INTEC ENTERPRISES.

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Presentation on theme: "ME 2605 -Performance and Cost analysis AMRISH GUPTA LI HONG RAMESH KHANAL XIONG JIE INTEC ENTERPRISES."— Presentation transcript:

1 ME Performance and Cost analysis AMRISH GUPTA LI HONG RAMESH KHANAL XIONG JIE INTEC ENTERPRISES

2 Product portfolio Value Chain Milk Can Kitchen Utensil Pump&Motors Agriculture Equipment Research and Development Procurement Assembly Quality Control PRODUCTION Selling & administration Fasteners Cost centre, profit center, invest centre

3 Managerial Strategy Price taker facing long term product-mix decisions –Activity based profitability analysis essential. Target costing –non-customized high sales volume products. –Price dominates markets.

4 Second Stage AllocationFirst Stage Allocation Traditional approach

5 Assigning to final product Traditional approach

6 Second Stage allocation ABC Approach First Stage allocation

7 Assigning to final product ABC Approach

8 Cost Comparison

9 Break Even Analysis Sensitivity to Volume

10 Sensitivity to total over head Break Even Analysis


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