AMC: Reconciling Functional Differences in Costing

Nguyen Ngoc Thao Vo, Vinh Quang Le, Chee Chuong Sum

Product #:W51481

Supplier:Ivey

Discipline:Accounting, Operations Management

Setting:Vietnam, 2025

Details:Exercise (PDF) • 5 pages • 2026-10-13

Your Price:

$10.54

Purchase this material with a free Educator Account and enjoy more benefits:

Free Educator Copy
Free Teaching Notes
Build your coursepack
Discounted academic price

On a Monday morning in November 2025, Nghiep Nguyen, director of the Advanced Manufacturing Center (AMC), a manufacturing centre affiliated with a Vietnamese university, received a request from BD Engineering Co. Ltd. for a quotation on 1,000 aluminum linkage arms, to be delivered within four weeks. The quote was due by noon the following day. Although BD Engineering was a long-standing client, this order was the largest AMC had ever received and represented a meaningful step toward higher-volume commercial manufacturing. While the technical specifications were well within AMC's capabilities, Nguyen was troubled by the centre's existing costing practices, which appeared inadequate for the mandate to achieve financial self-sufficiency. Engineering, accounting, and business development held differing views on how the quote should be built. With fewer than 28 hours available, Nguyen had to decide which costing approach would best support a competitive yet sustainable quotation.

Learning Objectives

Suitable for undergraduate and graduate courses in managerial accounting, cost accounting, and operations management, this exercise places students inside a product costing decision at a university-affiliated manufacturing centre under pressure to become financially self-sustaining. Students examine competing cost estimation methods, weigh a fast engineering-led estimate against a fuller approach incorporating manufacturing overhead, and consider how the chosen method shapes pricing competitiveness, profitability, internal stakeholder dynamics, and the centre's longer-term strategic position.

After working through the exercise and assignment questions, students will be able to do the following:

Examine various product cost estimation methods, assessing their advantages, limitations, and effectiveness in capturing the actual cost of production.
Compute cost estimates using various costing methods.
Explain the relationship between product cost and pricing in formulating a quote.
Select an appropriate method for estimating product cost that aligns with specific business objectives.
Understand differing stakeholder perspectives and their influence on quotation decisions.