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Kanthal Case

Executive Summary
Over the years Kanthal has used its traditional accounting management system to cost its products. In 1985, when Carl-Erik Ridderstrale became president he developed the Kanthal 90 plan to increase overall profitability. He quickly recognized that in order to implement this plan a new account management system was needed to supplement the new strategy. In lieu of this need a new account management system was devised.
Under the new cost system, two broad sources of costs were identified: manufacturing and SM&A. All costs within these categories were reclassified as either volume driven or order driven. Hence, four cost pools were set up.
The implementation of the new system had some limitations and challenges:
- The validity of the costing under the new cost system
- The market dynamics and how they would impact implementation
- Danger of losing customers for stocked items
- The applicability of the new system across borders......

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Approximate Word Count: 2998
Approximate Pages: 12 (250 words per double-spaced page)

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