Business Case Studies & Business Publications

Breeden Security, Inc. (A)

Allen, Brandt R., ...

Case

Breeden Security, Inc. (A)

Allen, Brandt R.; Rotch, William; Lynch, Luann J.

C-2307 | Published October 27, 2009 | 3 pages Case

Collection: Darden School of Business

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Breeden Electronics USA is a start-up division of a German company. It plans to produce two products, both electronic signaling devices. Herman Klein, the division president, has asked his controller, Marlene Baer, to compute several break-even sales figures as they assess the sales level that is necessary to meet the profit target established by the parent company. Baer must conduct several break-even analyses and consider the impact on profit if production exceeds sales. This is the first in a series of two cases that can be used to explore the evolution of cost systems. The main issues of the two cases are as follows: in the A case, the company uses a traditional costing system. The main questions relate to breakeven analysis and the effect of inventory buildup on profit. The B case (UVA-C-2308) introduces the use of an activity-based costing system to allocate costs so that the company can assess both product and customer profitability. The two cases can be used in two classes or together in one class.