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You are the controller in charge of cost allocation for BMW. you are asked to meet with the heads of production teams developing new products. the current method of cost allocation is to assign indirect costs on the basis of the direct labor allocation method. there are two team directors who are at each other's throat about the current metod they are:
a. the project director for the mini-cooper which will be produced in Stutgart. This is a mass produced assembly line vehicle which is a near copy of the Austin Mini of British Leyland fame. this one is reality.
b. the project director of a new, limited production, hand crafted, high end luxury model which is being introduced to compete with the reintroduction of the Italiamn Masserati tothe USA.
Part I which one of these project directors do you think likes the current method and which one is railing against it and why?
Part II As the controller, what solution do you see that is viable and what will be necessary to have both managers on board with the decision?
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