# Siemens Case

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Submitted By aquanik
Words 1363
Pages 6
Managerial Accounting
Group B – Section 1

QUESTION 1

1. Pre and Post PROKASTA Costing
UNDER OLD SYSTEM
Old Costing
Sub Total Base

A

SubTotal Special

32.2

Order SubTotal
Support Costs
TOTAL COSTS

35%

D

E

247

247

247

247

247

2

3

5

10

32.2

64.4

96.6

161

322

279.2

Number Spec

C

1

247

B

311.4

343.6

408

569

97.72

108.99

120.26

142.8

199.15

376.92

420.39

463.86

550.80

768.15

In the old system, Siemens based Support costs on the subtotal of the total direct materials and labor costs. Afterwards they added a 35% support cost to this subtotal to arrive at total cost.

DIRECT COSTS + OVERHEAD + 35% = TOTAL COSTS

1. Pre and Post PROKASTA Costing
Under New PROKASTA System

COST POOL A: Order Processing Cost
Order Processing Cost/Number Orders Accepted
= 13,800,000/65,65,625
= 210.29 Cost Per unit

COST POOL B: Requisition Cost
Special Components Cost/ # of times processed
=19500,000/325,000
=60 Cost per unit

1. Pre and Post PROKASTA Costing
Under New PROKASTA System
New Costing

A

B

C

D

E

Base Motor
Special Components
Total Manufacturing Cost
Support - Base Motor
Support - Special
Components
Support Related Cost
Order Processing Cost1
Special Components Cost2
TOTAL COSTS

247
32.2
279.2
57

247
64.4
311.4
57

247
96.6
343.6
57

247
161
408
57

247
322
569
57

7.4
64.4
210.29
60.00
613.89

14.8
71.8
210.29
120.00
713.49

22.2
79.2
210.29
180.00
813.09

37
94
210.29
300.00
1,012.29

74
131
210.29
600.00
1,510.29

In the new system, the Base Motor and other Materials costs are added to the two new cost pools, where order processing is a flat cost, and Special Components vary on the number within each order.

DIRECT COSTS + ORDER + #

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