Author Description

This case focuses on short-term profit planning for SEWMEX--a newly formed Mexican subsidiary of a U.S. company. The case is based on a real company in the sewing industry and as such forces students to think critically about the application of CVP concepts to a real-life situation. Sensitivity analysis is required to determine the impact of changes in production efficiencies on CVP relationships and profitability for the SEWMEX plant. Some applications of Excel are required to complete the case. Students are required to construct a written summary report regarding major issues raised in the case. Optional requirements focus on various issues regarding foreign exchange rates. Because of the richness of the case, it is targeted for use at the graduate level (e.g., MBA managerial accounting) or at an upper-level undergraduate course for accounting majors (e.g., cost accounting).