Sanfe Automotive's Strategy

Paper Summary:

The paper looks at Sanfe Automotive, which has hired a cost accountant to evaluate its current costing method. The paper examines the accountant's primary conclusion that the current system does not provide an accurate assessment of costs. The paper discusses the recommendation that a new system should be implemented immediately. The paper explains that the new system involves an activity-based costing methodology that results in far more accurate estimations of cost and cost allocation across a diversity of product lines and departments.

Outline:
Executive Summary
Sanfe Forward Strategy

From the Paper:

"Sanfe Automotive is an auto parts supplier in the automotive industry specializing largely in niche products. While it manufactures a host of products, 40% of its revenues are generated through its carburettor division. Sanfe has hired a cost accountant who has been tasked by the President of the company to identify a series of issues pertaining to the current costing method: 1) is the current system adequately accounting for costs, 2) is the present system capable of providing the data and information necessary for strategic decision making, and 3) does the current system accurately assess the supervisors' performances in the company. To accomplish the task the cost accountant has utilized the company's carburettor division to assess costs both under the current system and under a new cost accounting method based an hourly costing method specific for each department."

Sample of Sources Used:

• "Sanfe Automotive Company." Case Adaptation, Accounting Text & Cases, 11th Ed., Anthony, Hawkins and Merchant, New York; 1998.

More papers on Sanfe Automotive's Strategy:

• Analytical Essay # 130108 : "Sanfe Automotive Forward Strategy"
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• Research Proposal # 141402 : "Automotive Marketing Strategies"

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