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1. Introduction
The CEO of ABC Motors International, through an extensive evaluation process, has decided that his companyrequires an integrated software system. Having examined a number of possible solutions, he has determined thatSAPs R/3 system best suits the companys needs and growth, and has bought licenses for the FI, CO, SD, and MMmodules. Your firm has been contracted to lead the installation project that includes some business process re-engineering.
Your team, assigned to assist ABC Motors International in the implementation of this business system, is to build aworking prototype of the system and present it to the executive committee. Considering the attached informationgathered from the client, your talented consulting team should design and configure the organizational structure andapplicable master records to support the business. All appropriate posting documents and resulting accountingdocuments for each business transactions should be prototyped and tested. Document and justify any significantrecommendations. In your presentation, significant attention should be given to integration and to the flow ofbusiness through the supply chain.
The following key areas should be covered.
Planning issues encountered and their resolution.Integration points throughout the software.
Flow of business transactions.Problems and obstacles found in prototyping the proposed implementation model.
Attached is the information already gathered by your project team. You have limited access to the SeniorManagement Steering Committee of ABC Motors International to respond to questions you may have and providefurther information as required.
2. Background Information
2.1 Company information
ABC Motors International Worldwide has its head office in Laguna Technopark. The company sells motorcycles,
and accessories.
ABC Motors International owns AMI Marketing, a distribution company in Cebu that handles sales for VizMin area.Financial statements are prepared at the corporate and subsidiary levels. The data and the application server areon a computer in the head office.
2.2 Organizational Structure
The manufacturing plant in Laguna Technopark assembles all products sold by ABC Motors International. Inventoryis then transferred from the plant to the other distribution centers in Quezon City and Cebu. AMI Marketingprocesses all sales to VizMin customers.
Define the appropriate company codes in order to show the full range of required business functions in your
prototype. Assign the appropriate business for internal balance sheets. The fiscal year is identical to the calendaryear, however with four special periods. Each company code must have its own credit control area.
3. General Information
The suggested priority is to focus on delivering the prototype presentation.Consider the following:
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Taxes - Configuration of Taxation is not essential for the case studyPlants - Remember to use the copy plant function when defining additional plants.
After completing the essential configuration required for the prototype, you should investigate the configuration forother components of the case study
3.1 Master Data
G/L Account Master Data
Create one chart of account per company.
ABC Motors International (local currency PHP)AMI Marketing (local currency PHP)Automatic Account Assignment must be maintained so that the G/L accounts are posted automatically for theinventory management and invoice verification.
3.2 Bank Master Data
Enter the house banks and the related bank accounts for the respective company codes.
Bank City Bank Id Bank country ABA Routing No.
BPI Head Office BPI PH 11000430Citibank Cebu Citibank PH 11040305
3.3 Customer Master Records
Maintenance of customer master records is decentralized. Sales department first creates the customer master andthey establish the customer number to be used. The accounting department is then responsible to extend thisrecord to include the financial information. One of the project team members is the Credit Manager. He/she willdetermine the appropriate credit information for the credit controlling areas.
3.3.1 Account Groups
For regular customers create master records using external alphanumeric number ranges. For the one timecustomers create one master record for the Philippines and one for US. For the line item display for one-timeaccounts, sort by name and city.
Use field selection for the regular customer account group to control the following:Region, Industry and Terms of payment fields are to be mandatory.Sales district is to be suppressed.
The following reconciliation accounts should be allocated to the individual customers:
PH receivablePH receivable one time customer account
3.3.2 Incoterms
The following Incoterms are currently used by ABC Motors International and AMI Ltd.:
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CIF Costs, insurance, freight
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CIP Cost insurance paidZEX Express Freight Chargeable
Payment Terms
The following payment terms are currently used:
PT01 8 days 5%14 days 2%21 days net
PT02 14 days 3%30 days 2%45 days net
PT01 is used by the ABC Motors International head offices and payment term PTO2 applies to all other customers(including trade industry)
3.3.4 Customers
The allocation of customers to sales organizations is determined by the assigned country and city listed in thecustomers master record. The customer listed below are interested in all product groups of ABC MotorsInternational.
The following customer represents the Cebu subsidiary. It is used for inter-company sales of finished goods:
CustomerAddressContact
CurrencyCountryLanguage
DistributionChannel
Terms ofPayment
AMI Marketing101Yonge Street
Rosa Ave., Cebu City
PHPPH
EN
Wholesale PT01
The following companies represent the customers (wholesalers and retailers) that ABC Motors International andAMI Marketing sells their products to:
CustomerAddressContact
CurrencyCountryLanguage
DistributionChannel
Terms ofPayment
Cycles Inc.64 West Ave. Quezon City
PHPPHEN
Wholesale PT02
3 Wheels Inc.
2115 Mt. Pleasant RoadParanaque344-4355Contact: Mr. Mendoza
PHP
PHEN
Retail PT02
Bikes R Us.12667 East Ave,Quezon CityContact: Ms. Nagin
PHPPHEN
Wholesale PT02
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X-TremeCycles315 North Ave.,CebuContact: Ms. Sy
PHPPHEN
Wholesale PT02
3.4 Material Master Records
Because of our commitment to quality, we have begun tracking changes to our key materials and products. Wewould like to see this practice continue through a change management facility that is built into the system.
We currently group changes by engineering/ design project numbers.
3.4.1 Finished Products
Material number Descripti on100001 500 cc Street Motorcycle-Black100014 500 cc Motorcross motorcycle-Green100025 750 cc Street motorcycle- Black100030 750 cc Motorcross motorcycle-Green
3.4.2Accessories
The product assortment includes accessories (trading goods) in number range 5. These items are only bought andsold and are not used in any way for production. The following materials are to be considered.
Material number Descripti on
500020 Sissy Bar500021 Screw Driver Grease500022 Black Leather Riding Pants500026 Lamp-Tiger eye Halogen500099 Six pack Old Sturgis Best Ale
3.4.3 Material Types
In ABC Motors International, the following material types are used, with the corresponding number ranges.The material type Bike will have to be created. Bike should have the same functionality as a Material type HALB(semi finished).
Beginning of range End ofrange
External/Internal
AccountCat. Ref
Finished products 100001 199999 External 0009Bike 300001 399999 External 0008Raw materials 200001 299999 External 0001Operating supplies 400001 499999 External 0002
Trading goods 500001 599999 External 0005Services 600001 699999 External 00063.4.4 Material Groups
For control and reporting purposes, ABC Motors International has decided on the following material groups:Acc AccessoriesOther OtherCycles Motorcycles
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3.4.5 Additional Information for Sales Department
The material master for finished goods is partially maintained. The sales department must maintain additionalinformation. The maintenance consists of the following:
Minimum order quantities for accessoriesDelivery plantLoading group
Transport groupStorage condition
3.5 Vendor Master Records
Vendor master maintenance for trade vendors are maintained centrally by Purchasing Department whilemaintenance of non-trade vendor masters is maintained by Accounting.
3.5.1 Account Groups
ABC Motors International normally purchases from a few, regulated suppliers. Where circumstances warrant, theoccasional use of additional suppliers is possible. By policy, ABC Motors International will deal with theseoccasional vendors using the systems one time vendor capability.
Account groups and number range information for vendors is in the following table:
Account group Descript ion Number rangeKRLV Local Vendors Internal numericKRFV Foreign Vendors Internal numericKROT One-time vendors External alphabetic
Other than for the one-time accounts, ABC Motors International will use internal number assignment. In order tofacilitate reporting and control, there should be two one-time vendor accounts: one for foreign and one for the
domestic suppliers.
The field status for the account groups should reflect a mandatory field for payment method.
The following reconciliation accounts should be used as appropriate.
Local vendors payableForeign vendors payable- one- time accountsUS vendors payableUS vendors payable- one- time accounts
For the line item display for one- time- accounts, sort by name and city.
3.5.2 Vendors
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The following vendor master records need to be defined.
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SupplierAddressContact
Descript ion Terms of paymentValid currency
ABC MotorsInternational
1001 First StreetLagunaContact: Ms. Martha Aldeguer
Laguna Tech distributioncenter
PT01PHP
Wheels on the Go2811 West AvenueQuezon City
MotorcycleManufacturer.Supplier for theRoces Avenue Plant
PT01PHP
Top Design Corp.11453 Mockingbird LaneRoces Avenue, QCContact: Mr. Bert N. Erny
This company deals withsubcontract orders.Frames, color, and logo arethe materials to be provided.
Cleaners, Inc.
14793 Sct. TobiasRoces Avenue, QCContact: Mr. J un Reyes
Cleaning Service for Laguna PT02PHP
Paints, etc.234 Northridge Park,Chicago, ILContact: Todd Williams
Provider of paints and colors. PT01USD
4. Materials Management
All deliveries of materials will be entered as goods received by the inventory management department with invoiceverification performed by the accounting department.
4.1 Materials Master Data Material type
AMI uses the material type bike to describe all semi-finished products. The material type bike will have to becreated. Be sure that the new material type has all the functionally of the standard HALB material type.
4.2 Procurement
The following purchasing Groups are required:001 for procurement of accessories002 for procurement of services003 for procurement of motorcycles
Requirements for both Manufacturing and Marketing companies are ordered by one purchasing organization based
in Manila. However, there are Cebu requirements that are ordered locally but under the same purchasingorganization.
In addition, someone must consider the following points while ordering raw materials or semi-finished products:
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After their in-house production, the frames are given to an outside company. Top Design, contracted for the special
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finish. The required finishing color and the appropriate logo have to be considered as raw material of ABC MotorsInternational.
Handling fee per frame: PhP25.00
Raw material costs for color (per frame): PhP2.50
Raw material costs for logo (per frame): PhP0.50
4.3 Valuation
ABC Motors International is valuing motorcycles at standard cost, accessories using moving average.
4.4 Physical Inventory Method
Because ABC Motors International uses annual inventory count, all company stocks have to be physicallyinventoried by the balance sheet cut-off date. During the counting, the warehouse for material movements must beblocked.
4.4.1 Materials Requirements Planning
AMI Marketing in Cebu orders motorcycles from Laguna, maintained through MRP. Material requirements planningwill be carried out for the creation of purchase requisitions and planned orders. The requisitions are thenautomatically converted into purchase orders. All requisitions that do not have an explicit source of supply assignedto them are to be converted manually.
Accessories are planned using automatic re-order point planning. Motorcycles are ordered based on manual stocksand Forecasts provided by the sales offices. ABC Motors International would like to utilize consumption ofindependent requirement.
4.4.2 Distribution Center Inventory
Using the prescribed methods above, replenish the inventory levels at the distribution centers for all salable
products.
4.4.3External Service Management
AMIs Laguna plant annually requires duet work cleaning and air filter replacement to the plant HVAC System. AMIRoces Avenue has selected though competitive bid Cleaners, Inc for the project. The cleaning contract is valued atPhP15000. The cost of this service should be allocated to all production cost centers. All payments to quickcleaning are subjected to service entry and acceptance of the actual services rendered.
5. Sales and Distribu tion
5.1 Organization
5.1.1 Sales Organization
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Business in the Philippines is divided into two sales organizations, one for the ABC Motors International and one forAMI Marketing. Each sales organization is responsible for negotiation and fixing of conditions and characteristics ofbusiness transactions.
5.1.2 Distribution Channels
Both the ABC Motors International and AMI Marketing sales organizations use two distribution channels throughwhich to sell their goods:
Wholesale trade
Retail trade
5.1.3 Divisions
The products of ABC Motors International are divided into three groups. All product lines can be sold through bothdistribution channels by both sales organizations.
Street motorcycles
Motorcross motorcyclesAccessories
5.1.4 Sales Offices
It has been decided to use sales offices to differentiate the sales made by the various regions. This will allow easyreporting of business volume by office. The following sales offices must be defined:
LagunaCebu
There is no freight charge or profit, thus there is no accounting implication re transfer of stock between distributionpoints.
5.1.5 Distribution Centers
As discussed earlier, Laguna is responsible for all manufacturing. The other locations Cebu, do not manufactureany products.
Inventory at the Cebu distribution center is replenished through plant transfers that result from sales forecasts.There is no accounting implication since ABC Motors International owns both locations.
The Marketing Company (AMI Marketing) purchases inventory in Cebu from ABC Motors International according toannual agreement. This agreement is in the form of a scheduling agreement, which outlines quantities and dates.
ABC Motors International serves as a vendor for AMI Marketing, and AMI Marketing is defined as a customer of
ABC Motors International. Therefore a scheduling agreement is created by ABC Motors International for the deliveryschedule of their customer AMI Marketing. The lines in the scheduling agreement appear as demand in the Lagunadistribution center.
5.1.6 Shipping Points
Each plant has two shipping points that are responsible for the processing deliveries. For normal delivery there is ashipping point which processes the bulk of the deliveries. In addition ABC Motors International offers its customersan express delivery options using Guaranteed Overnight Delivery (G.O.D) which guarantees delivery in one day
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anywhere in North America. This shipping point represents a special shipping area reserved for express deliveries.
Shipping point DescriptionR001 Laguna Regular deliveryREXP Laguna Express deliveryC001 Cebu Regular delivery
CEXP Cebu Express delivery
5.2 Functions
5.2.1 Pricing
Pricing used during order entry and invoicing is the responsibility of each sales organization. Therefore any materialpricing, discounts and surcharges can vary depending on the sales organization. It has been decided that eachsales organization is to have a separate pricing procedure to reflect its own pricing policy. Therefore certaincondition types procedure used for Canadian customers.
Furthermore, the distribution channel also influences pricing. A special discount is to be defined for wholesalecustomers, which reduces the gross price of the product. It has been decided that the price group field in thecustomer master will be used to determine if a wholesale discount applies. It would be possible to simply make thediscount dependent on the distribution channel alone, but the use of the price group field was decided upon since itallowed for multiple discount rates based different price groups.
The following conditions apply to pricing at ABC Motors International:
A basic material price is established for each sales organization scaled by quantity.
Customer specific material prices are possible
At 25%discount applies for wholesale customer orders
Pricing determined at order entry is firm and is not re-determined at billing time
The value of discount based on the terms of payment used should appear in the pricing details foran item.
Material cost should also be included in item pricing details along with the computed Gross profitmargin.
An addition freight charge should be included in the item in the case of express delivery. Theamount is dependent on the weight of the goods shipped and is triggered by a special Incoterms thatyou enter in the sales document for express delivery.
5.2.2 Availability checks and Transfer of Requirements
Both ABC Motors International and AMI Marketing., would like to track each requirement generated by a sales orderseparately. This means that individual requirements will be passed for the materials. The alternative would be toaccumulate demand into collective requirements for a day or a week but then the details of the source of therequirements is not available.
5.2.3 Shipping
The data required for shipping should be defaulted as much as possible by the system. Areas where thisdetermination is to be automated included shipping point, and picking location determination.
5.2.3.1 Shipping points
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The shipping point is specified for every order item. In the determination tables, one shipping point is specified asdefault and others can be specified as alternates. The default shipping point is influenced by the shipping conditionfrom the customer master, loading group from the material, and delivery plant. Ensure that two shipping conditions,one for regular and one for express delivery are defined as well as the related determination table. A single groupcan be used since all materials are located onto trucks using a forklift.
The shipping point should be determined as follows:
DeliveringPlant
ShippingCondition
LoadingGroup
Shippingpoint
Laguna 01 002 ROO1Laguna EX 001 REXPCebu 01 001 C001Cebu EX 001 CEXP
5.3 Addit ional Sales Information
Configure the system to satisfy the following requirements:
Use the standard order type available in the system to process regular customer orders. ABC MotorsInternational does not require specialized orders.
ABC Motors International has decided that in addition to the standard order type, credit and debit requests aswell as the return order type will be used. Configure the system so that these document types are available atorder entry but no others, e.g. Consignment order types.
It has also been decided that the business terms in the sales document header are valid for all items andcannot be changed at the item level.
The only partner function that can be different between items in a sales order is the ship-to-party. An incompletion procedure based on the standard procedure is to be used for order entry. However, do not
include the purchase order number in the list of fields to be checked. Also issue a warning message if weightsand volumes are missing.
Input facilities must be used in order to facilitate fast and efficient order entry by defining a product proposal.
5.4 Additional shipping Information.
The shipping must be processed optimally and quickly. The shipping team has decided the standard functionality isadequate and that the standard delivery document type will be used for sales orders. Due to the volume of deliveries expected, the creation of the delivery documents will be done daily using
collective processing. The exception to this rule is the case of a order where the customer has requested theexpress delivery option. For express delivery, the delivery document will be created separately for the individualorder.
Warehouse management will not be incorporated since the warehousing structure is not complex. However, thestorage location for picking should be proposed in the delivery document.
5.5 Additional Billing Information
Consider the following billing related requirements: A standard invoice related to a delivery is to be used. Customers normally receive individual invoices for each delivery. However, it has been decided that billing
schedules will be supported for customers who request it. Initially a bi-weekly calendar will be defined toconsolidate all deliveries into a billing date falling on the Friday of 2
ndand 4
thweek of every month.
The accounting department maintains customer credit limits. The credit control area is the organizational unit,which sets the credit limit for customers and controls it. A credit control area at ABC Motors International
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contains only one company code. For every sales document (order type etc) it can be determined, whether acredit limit check is warranted.
6. Financial and Cost Account ing
6.1 Document Processing
Enter the following document types. If necessary add the appropriate
DR Customer invoiceDS Customer Credit memoDZ Customer paymentKR Vendor invoiceKG Vendor credit memoKZ Vendor PaymentsSA G/L accounts
Use an internal number assignment with the corresponding number range intervals.
6.2 Organization Information
Both of the two company codes will roll up into one corresponding area. Define the controlling area and allocate itto the respective company codes.
Enter the basic data as follows:
Activate cost center accounting.The cost accounting currency in identical with the group currency of the company.Activate the charts of accounting.
The periods correspond to the periods of financial accounting, i.e. 12 accounting periods and four special periods.Company code check.
Maintain the controlling area currency and the two main currencies for the company code.Implement number range groups for activity related and period related activities in and actual.Allocate number ranges for those groups within cost center accounting.Complete data entry is only required in one company. Partial data entry is necessary in the other company todemonstrate aggregation of data at the corporate level.Design a line for AR, AP and GL to display all assigned currencies.
6.3 Cost Element Account ing
For primary cost entry and primary cost allocation take over the G/L accounts of 4xxxxxFrom financial accountinginto cost accounting. Therefore you need to analyze the chart of accounts and determine the appropriate costelement types.
Implement the respective secondary cost elements, statistics ratio and activity types for the internal cost allocation.
The validity period for cost elements and activity elements is from 01.01.2002 till 12.31.9999.
Statistical figures 91000(employees in ea.)
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Statistical Key figure 7800 (energy consumption in kWh) Activity type 1410 (repair hours) Activity type 1440 (assemble brakes ) Activity type 1450 (assemble motorcycles) Cost element for internal allocation 610000 Cost elements for cafeteria assessment 510000 Internal Order settlement cost element 650000
To group similar cost elements, implement the following cost elements groups:
Group Cost Elements
GOAS All other groups, object analysis sheetMaterial 40xxxx, 4150000Energy 4161000, 416200,416300Personnel 42xxxx, 43xxxx, 44xxxxxPlant maintenance 45xxxx
Taxes 46xxxxRents 47xxxxAssessment 510000
Activity allocation 610000Settlements 650000
6.4 Cost Center and Internal Order Accounting.
6.4.1 Cost Center Hierarchy
Set up appropriate standard hierarchies for your controlling area:
K00 Standard hierarchy, ABC Motors.
K99 Clearing cost centers
K99X6 Clearing cost centerX16099 Clearing cost center
K00X ABC Motors International,
K00X1 General cost centerX11000 general cost centerX11100 real estate/buildingsX11200 cafeteria
K00X2 Service cost centerX12000 service cost center
X12100 plant maintenanceX12200 internal transportation
K00X3 Production centerX13000 production centerX13100 street motorcycle assemblyX13200 motocross motorcycle assembly
K00X4 Material center
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X14000 material centerX14100 material purchaseX14200 operating funds purchase
K00X5 Distribution and AdministrationX15000 administrationX15100 managementX15110 sales LagunaX15210 sales ChicagoX15310 administration LagunaX15410 administration Chicago
Create the standard hierarchy for the PH (where X=1) and US (where X=2) following the chart above. K001 e.g.would represent the cost centers assigned to the Philippine Company code and K002 would represent all costcenters in the US Company code.
Not all cost centers are relevant for both companies.
Configure cost centers for all primary and secondary costs for actual and planned postings. Service cost centersalso have to be managed on a quantity basis.
The cost center currency corresponds to the company code currency. The validity period for the cost centers is from 01.01.2002 until 12.31.9999 Assign the cost centers to a business area of your choice.
6.4.2 Internal Orders
The ABC Motors international has decided to attend a rally held in Clark Field, Pampanga each year to promotetheir street motorcycle model. In an attempt to prove that there is actual business value to this annual free for all,the marketing manager has requested to see a detailed analysis of the commitments and the actual costs. Aninternal order will be used to track and report these costs. The costs will be settled to the sales Laguna cost centeronce all costs have been accounted for. In addition AMI maintains strict budget controls over the actual costs.
Create an internal order type for promotions and marketing events that allows recording commitment items.6.5 Planning
The prices for activity types should represent given standards and not calculated values. Generate a plan for thefollowing key figures, activity types and cost elements in the PH Company. Check with production for additionalrequirements.
6.5.1 Statist ical Key Figure Planning 9100 No. of employees.
To apportion the cost of the cafeteria corresponding to the no. of employees of the single cost center, the ratio forthe following cost centers must be planned as a constant.
General Cost center 15 employees
Service cost center 45 employees
Street motorcycle assembly 50 employees
Motocross motorcycle assembly 60 employees
Material 25 employees
Distribution and administration 20 employees
6.5.2 Statistical Key Figure Planning 7800- Energy consumption
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To apportion the cost of energy corresponding to the planned energy consumption rates of the single cost center,the key figure for the following cost centers must be planned as a constant:
General cost center 1000kwh
Service cost center 1500kwh
Production 13000kwh
Material 1500kwh
Distribution 3000kwh
6.5.3 Activi ty Type Planning 1410 RepairThe activity type repair must be planned on cost center X12100 plant maintenance with the following values:Planned activity 2000hrStandard rate PhP45.00/hr
6.5.4 Activity Type planning 1440- Assembly BrakesThe activity type assemble brakes must be planned on cost center x13100 street motorcycle assembly with thefollowing values:
Planned activity 20000 hr.
Standard time PhP15.00/hr.
The activity type assemble brakes must be planned on cost center X13200 motocross motorcycle assembly withthe following values:
Planned activity 25000hr
Standard time PhP15.00/hr.
6.5.5 Activity Type planning 1450-Assembly Motorcycles
The activity type assemble motorcycles must be planned on cost center X13100 street motorcycle assembly withthe following values:
Planned activity 40000hr
Standard time PhP18.00/hr
The activity type assemble motorcycles must be planned on cost center X13200 motocross motorcycle assemblywith the following values
Planned activity 45000hr
Standard time PhP19.00/hr
6.5.6 Direct Planning
Generate a plan for the following cost elements in ABC Motors International:
Cost center X11000- General CC
430000 salaries PhP150, 000.00 yr.415000 salaries PhP 80,000.00 yr.
Cost center X11200 - Cafeteria
415000 cost for external procurement PhP120, 000.00 yr.421000 indirect labor costs PhP60, 0000.00 yr.430000 salaries PhP100, 000.00 yr.
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Cost center X12000 - Service
415000 cost for external procurement PhP150, 000.00 yr.421000 indirect labor cost PhP80, 000.00 yr.
Cost center X13000 - production
415000 cost of external procurement PhP100, 000.00 yr.430000 salaries PhP100, 000.00 yr.
Cost center X13100 Street motorcycle assembly
400000 other raw material PhP400, 00.00 yr.420000 direct labor cost PhP480, 000.00 yr.430000 salaries PhP100, 000.00 yr.
Cost center X13200 Motorcross motorcycle assembly
400000 other raw material PhP500, 000.00 yr.420000 direct labor cost PhP500, 000.00 yr.
430000 salaries PhP110, 000.00 yr.
Cost center X14000 material center
415000 cost of external procurement PhP350, 000.00 yr.430000 salaries PhP200, 000.00 yr.476000 office supplies PhP25, 000.00 yr.
Cost center X15000 - administration
430000 salaries PhP200, 000.00 yr.476000 office supplies PhP40, 000.00 yr.476500 general management costs PhP100, 000.00 yr.
Cost center X16099 - Clearing
416100 Electricity, fix PhP10, 000.00 yr.416200 Electricity, variable PhP190, 000.00 yr.
Add some plan data for the AMI Ltd.
6.5.7 Planned Assessment
Costs have been planed and entered into the cafeteria cost center. Within the framework of plan assessment, thecosts will be assessed based on the number of employees within the corresponding cost centers. Enter thecorresponding sender recipient relationship.
6.5.8 Internal Order Planning
Plan the following costs for the Clark Field Rally & Beer Drinking Exhibition order:
Travel Expenses 10,000
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Exhibition Booth Rental 1,200Promotion Material (including beer) 36,000Miscellaneous Expenses 250
6.6 Actual Costs recording
6.6.1 Business transactions
Ensure that primary costs from MM and SD have been recorded in the cost centers. Create purchase requisitionsfor accessories and liquid supply you intent to use on the rally. Process the requisitions forward to partial goodsreceived.
In addition, enter the following FI transactions:
Customers and vendors invoices, debit and credit memos on cost center
Energy cost on the collective cost center
Direct labor costs and salaries on material cost center
Indirect labor costs on overhead cost center
Actual costs for the Clark Field Rally
6.6.2 Internal cost AllocationReproduce the following actual transactions for the internal cost allocation posting of statistical key figure 9100
General cost center 15 employees
Service cost center 45 employees
Material 25 employees
Distribution and administration 20 employees
6.6.3 Actual Assessment
Perform an actual assessment similar to the planned assessment.
6.6.4 Actual Order Settlement
Perform a settlement of your Clark Field Rally Order To the Roces Avenue sales cost center.
6.7 Reporting
Analyze the corresponding transactions in view of cost centers and cost elements.Perform a customer account analysis.Display vendor or customers line items and drill down to originating documents.
6.8 Closing operationsA limited month-end closing should be completed in the respective company codes based on the current month.
Therefore, it is necessary to close the accounting period by the last day of the month and to open the new period forthe next month. Maintain the corresponding tables. Draw up the preparation of balance sheet and a profit and lossstatement. Identify the account balance changes from prior month and reconcile the differences to thecorresponding transactions.
6.8.1 Financial Statements
In order to prepare balance sheet and profit and loss statement at the subsidiary level, a financial statement versionwith the corresponding hierarchy levels has been created.
Version Name: MSCA
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Each group is totaled and sub-totaled. Each position has its allocated text. G/L accounts have been allocated to thelowest level. Revise if necessary.
7. Product ion Planning (Bonus Portion)
7.1 Work CentersThe following work centers are available.
SMBRAKE Street Motorcycle Brake Assembly
MCBRAKE Motorcross Motorcycle BrakeAssembly
SMASSM Street Motorcycle Assembly
MCASSM Motorcross Motorcycle Assembly
EXTSUB External Sub Contracting
These workcenters are assigned to cost centers and activity types as defined by controlling and productionmanagement. The quantity of resources in the workcenter must match the quantities budgeted in controlling.
7.2 Capacity
Assume all work centers are not hierarchically structured and have the following capacity.
Start time 8:00 a.m. Stop time 6:00 p.m. One hour break time at lunch. Effectively at 80%.
At each work center labor capacity is to be evaluated. The available capacity should be adapted after a planning runwith capacity evaluation. Discuss possible bottlenecks and discuss methods to solve the problem.
7.3 Routings
7.3.1 Routings for the brake assembly
Assemble front brake. Assemble rear brake Quality inspection.
7.3.2 Routings for the frame assembly
Paint the frame Apply letter and AMI Screaming Eagle insignia.
Inspection
7.3.3 Routings for the final assembly.
Assemble components according to drawing number Quality inspection.
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7.4 Bills of Material
7.4.1 Bill of Material of motocross motorcyc le
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Motor Sports International Bill of Material Motocross Motorcycle.
500cc Motocross Motorcycle
100014
Frame Painted
Green 71005
Frame
Aluminium
Color green
20022
Brake Assemble
70033
Brake30020
Brake Lever
30023
Wheels
70030
Saddle70025
Screwdriver
30096
Shift Assembly
70055
Gear Shift XTR
RDM 900
70043
Bearing
30112
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7.4.2 BILL OF MATERIAL STREET MOTORCYCLE
7.4.2 BILL OF MATERIAL STREET MOTORCYCLE
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Frame Painted Black
70005Brake assembly
70033
Wheels
70032
Shift assembly
70055
Handle Bar70031
Frame Painted Black
70005Brake assembly
70033
Wheels
70032
Shift assembly
70055
Brake
30020
Brake Lever30023
Saddle70035
Screw drive30096
Shift Assembly
RDM 900
70043
Frame Aluminum
20005
Color Black20012
Bearing30112
500 c:c Street MOTOR CYCLE
100001
500 c:c Street MOTOR CYCLE
100001
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7.4.4 BILL OF MATERIAL STREET MOTORCYCLE
Frame Painted Black
70005Brake assembly
70033
Wheels
70032Shift assembly
70055
Brake
30020
Brake Lever
30023
Brake Line
30024
Brake Disk
30026
Brake Pull
30028
Saddle
70035
Screw drive30096
Foot Rest
70036
Engine 750c:c
75002
Handle Bar
70031
Shift Assembly
RDM 90070043
Bearing30112
Frame Aluminum
20005
Color Black20012
Character
20020
Gearing Selector
30099
750 c:c Street MOTOR CYCLE
100025
Brake Pull30028
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7.5 Materials Requirements PlanningMaster production schedule / materials requirements planning needs to be carried out for the creation of dependentrequirements & planned orders. The planned orders need to be converted to production orders on all levels of theassembly.
7.6 Production OrdersThe production orders should make use of the bills of material & routings. The assignment of materials to theoperational steps is maintained in the routings. Component availability checking should include production ordersand purchase orders at the time of the creation and only on-hand available stock at the time of the release of theproduction orders. Confirmation of the last operation in the routing should trigger a goods movement to inventory. Ifthe automatic goods movement ever fails a rework goods movement should be processed.
7.7 Capacity Planning
The capacity planning is used to identify bottlenecks in available production capacity. In the case that these exist,pre-production is increased in the month of least demand. If this is not sufficient, the earliest date available topromise is determined.
Prototype Presentation
A number of core business functions have been identified. The supporting R/3 transactions are to form the basis forthe presentation made to the steering committee.
1. Demonstrate your Implementation project. Due to the lack of time no resource assignment and documentationis required.
2. Display the beginning Balance Sheets and P & Ls for the two subsidiaries.
3. Demonstrate the pre-planning in Cebu and the demand transfer to the production plant. Execute MRP formaterial 100001 in the production plant.
4. Create a purchase order for the vendor Wheels in Motion.Convert one of the requisitions generated by MRP into a Purchase Order.
5. Receive inventory against the purchase order
6. Show the service PO created for HVAC cleaning services in the Roces Avenue plant.
7. Demonstrate service entry and acceptance for HVAC cleaning services.
8. Invoice Verification.Use invoice verification to record the invoice from vendor Wheels in Motion.
9. Create a customer sales order for the Chicago sales office.
Customer, All Terrain Cycles places an order for express delivery as follows:Material Quantity100001 100 PC100025 75500026 50500022 50
Verify the following are correct:
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Shipping point
Delivery Plant
Pricing
Process the delivery for this order. All materials are to be fully delivered. Complete picking and goods issue.
Ensure that the storage locations were defaulted accordingly.
10. Create the billing document for this delivery.Create the billing document and ensure that the posting to financial accounting is successfully completed.Examine the accounting posting to validate the general ledger accounts used.
11. Create a returns order with reference to the sales order.The customer has called and complained about the quality of the finish on some of the motorcycles theyreceived. Create a returns order for 5 pieces of material 100001.
12. Create the delivery for the returns order.Post goods receipt for the return of the damaged goods.
13. Create the corresponding credit memo.Create the credit for the returns order and examine the accounting posting.
14. Post an incoming payment.Receive a payment from customer X-Treme Cycles. A deduction was made for PhP23.00 for excess freightcharges and USD27.00 for arriving 3 hours late. We have agreed to absorb the PhP23.00, however theUSD27.00 still owes and should be recorded using a notation of 'item in dispute'.
15. Post a vendor invoice using an account assignment model.An invoice has been received by the landlord for the rent to be charged for the month.
The charges are always recorded to the same cost centers prorated by the sq. footage for each cost center.Cost center Sq footage11000 100012000 1200
15000 900
16. Generate a payment run for all the outstanding invoices.The payment run should contain at least 3 invoices, one of which is blocked from payment. Create anappropriate blocking reason.
17. Perform an assessment.The cafeteria costs will be assessed based on the number of employees.
18. Display the profit and loss statement forABC Motors International.Display a financial calendar showing all payment runs and financial statements. Include a message, whichreminds the controller when the month-end reports are finished and ready for preview.
19. Demonstrate the completion of the partial delivery for your Clark Field order.
20. Perform an actual settlement of the Clark Field rally order.
21. Be prepared to show and discuss the Cross Company Stock Transfer requirement between AMI ltd. and ABCMotors International.
22. Close the month and reconcile the Balance sheets and P & Ls for the two subsidiaries to the prior month.
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