“1)
In the context of this course,
you will be asked to address the issues/questions below for Tesla Motors, Inc.
(TSLA). When addressing the
issues/questions, be sure to do so in the context of this course and Tesla. Your primary sources of information will come
from the Teslas website, in particular, Investor Relations and the Annual Report
on Form 10-K for the Year Ended December 31, 2013. In particular, in the
Annual Report you may wish to read Item 1 and Item 7. Also, look at the web
pages for Tesla on Yahoo! Finance.

a) Discuss
the critical success factors and whether or not you believe that
Tesla shows evidence of success for these
factors.
b) Identify
one specific example of each type of cost for Tesla:
Variable
Prevention
Internal
failure
External
failure
Direct
c) Discuss
Tesla in the context of bottlenecks.
d) From
the material reviewed, explain whether or not Tesla shows
Evidence in their operations/results the
perspectives of the balanced scorecard.
e)
Discuss which of the activities of the value chain are most important to
Tesla.

2)
Alpha Company produces a variety of
electronic equipment. One of its plants produces printers, the superior and the
regular. At the beginning of the year
2014, the following data were prepared for this plant:

Superior Regular

Quantity 200,000 900,000
Selling price $500.00 $200.00
Unit prime cost* $200.00 $90.00
Unit overhead cost $32.50 $100.00

Prime cost equals direct
materials and direct labor.

The unit overhead cost is calculated
using the predetermined overhead application
rate based on direct labor-hours.

Upon examining
the data, the manager of marketing was particularly impressed with the per-unit profitability of the superior
printer and suggested that more emphasis be placed on producing and selling
this product. The plant supervisor
objected to this strategy, arguing that the cost of the superior printer was
understated. He argued that overhead
costs could be assigned more accurately by using multiple cost drivers that
reflected each products consumption. To
convince top management that multiple rates could produce a significant
difference in product costs, he obtained the following projected information
from the controller for the preceding production output:

Activity
Consumption
Overhead Activity Cost
Driver Pool Rate* Superior Regular

Setups Number
of setups $3,000 200 100
Machine costs Machine-hours
$ 100 200,000 600,000
Engineering Engineering-hours
$ 40 45,000 120,000
Packing Packing
orders $ 30 80,000 220,000

*Cost per unit of cost driver Total overhead cost =
$96,500,000

Required:

a)
Using the projected data based on
traditional costing, calculate gross profit per unit, and total gross profit
for each product.
b)
Using the pool rates, calculate the
overhead cost per unit for each product.
Using this new unit cost, calculate gross profit per unit, and total
gross profit for each product.
c)
In view of the outcome in requirement 2,
evaluate the suggestion of the manager of marketing to switch the emphasis to
the superior model.
d)
How does activity based costing add to Alphas
competitive advantage?
1)
In the context of this course,
you will be asked to address the issues/questions below for Tesla Motors, Inc.
(TSLA). When addressing the
issues/questions, be sure to do so in the context of this course and Tesla. Your primary sources of information will come
from Teslas website, in particular Investor Relations and the Annual Report
on Form 10-K for the Year Ended December 31, 2013. In particular, in the
Annual Report you may wish to read Item 1 and Item 7. Also, look at the web
pages for Tesla on Yahoo! Finance.a) Discuss
the critical success factors and whether or not you believe that Tesla shows evidence of success for these
factors.b) Identify
one specific example of each type of cost for Tesla: Variable Prevention Internal
failure External
failure Directc) Discuss
Tesla in the context of bottlenecks.d) From
the material reviewed, explain whether or not Tesla showsEvidence in their operations/results the
perspectives of the balanced scorecard.e)
Discuss which of the activities of the value chain are most important to
Tesla.2)
Alpha Company produces a variety of
electronic equipment. One of its plants produces printers, the superior and the
regular. At the beginning of the year
2014, the following data were prepared for this plant: Superior Regular Quantity 200,000 900,000 Selling price $500.00 $200.00 Unit prime cost* $200.00 $90.00 Unit overhead cost $32.50 $100.00 Prime cost equals direct
materials and direct labor. The unit overhead cost is calculated
using the predetermined overhead application rate based on direct labor-hours. Upon examining
the data, the manager of marketing was particularly impressed with the per-unit profitability of the superior
printer and suggested that more emphasis be placed on producing and selling
this product. The plant supervisor
objected to this strategy, arguing that the cost of the superior printer was
understated. He argued that overhead
costs could be assigned more accurately by using multiple cost drivers that
reflected each products consumption. To
convince top management that multiple rates could produce a significant
difference in product costs, he obtained the following projected information
from the controller for the preceding production output: Activity
ConsumptionOverhead Activity Cost
Driver Pool Rate* Superior RegularSetups Number
of setups $3,000 200 100Machine costs Machine-hours
$ 100 200,000 600,000Engineering Engineering-hours
$ 40 45,000 120,000Packing Packing
orders $ 30 80,000 220,000 *Cost per unit of cost driver Total overhead cost =
$96,500,000Required:a)
Using the projected data based on
traditional costing, calculate gross profit per unit, and total gross profit
for each product.b)
Using the pool rates, calculate the
overhead cost per unit for each product.
Using this new unit cost, calculate gross profit per unit, and total
gross profit for each product.c)
In view of the outcome in requirement 2,
evaluate the suggestion of the manager of marketing to switch the emphasis to
the superior model.d)
How does activity based costing add to Alphas
competitive advantage?”