1. ME 2605 -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