Chapter 7: Linde

Question 1

Why product costing?

Answer 1

• Based on given investments and assets, how do we maximise our profit?
• Can we stop a plant and ship product from another plant?
• Which product forms should we produce from a plant, if it is fully utilised?
• Should we deliver a specific customer, although distant to source and low price?

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Question 2

Linde business model and implications for product costing

Answer 2

• Tonnage
  
  • 15 years contracts
  • Limited implications due to contract
  • Needs globally consistent keys to be able to compare
• Bulk
  
  • High importance for pricing, customers and market delivery definitions
  • Key for Inventory Valuation
• Cylinder
  
  • Product mix decisions
  • Distribution optimization

Question 3

Market and competition change - impact on efficiency

Answer 3

Question 4

Cost categories in productivity calculation

Answer 4

Question 5

Concept of productivity calculation

Answer 5

Question 6

Understand margin development is key to understand operating profit bridge

Answer 6