The Shun Electronics’ KL radio division wants to expand the three cost centers to eight departments, each with its own overhead cost allocation rate. Consequently, it seems that the total cost for four of the six radios to increase while two reduced. The event brings students in the role of understanding with (a) why such an outcome has occurred, (b) made an explanation of the specific changes to the allocation system, and (c) to assess whether the changes are an improvement .

The Shun Electronics’ KL radio division wants to expand the three cost centers to eight departments, each with its own overhead cost allocation rate. Consequently, it seems that the total cost for four of the six radios to increase while two reduced. The event brings students in the role of understanding with (a) why such an outcome has occurred, (b) made an explanation of the specific changes to the allocation system, and (c) to assess whether the changes are an improvement
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This is a Darden case study.
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from
Mark E. Haskins
Source: Darden School of Business
7 pages.
Release Date: 02 February 2004. Prod #: UV0233-PDF-ENG
Shun Electronics Company HBR case solution

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