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Managerial Accounting Case G.G Toys

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Submitted By dziamarski
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- G.G Toys should not produce the specialty line; this line is to costly when it comes to trying to increase the profit margins. Having to set up a line and test all the toys that come off the production line each time is very costly. This should be scraped if the company wants to start earnings some better profits. Also their overhead isn’t being allocated correctly they are including the switch from custom to regular in the regular overhead section.

- The President of G.G toys is thinking about starting romaine patch doll, this could be a good endeavor, they are trying to save material by putting the scrap into these dolls. What they should be doing is scraping this line altogether and focusing on the original doll. -The company is currently wasting 20 percent of their pajama production; they could possibly look into ways to recycle back into their original line of dolls. The company can put some money into researching and developing and new process of making the pajamas

- The company has set out trying to split into all these other ventures, when what they should have been doing is trying to bring there original doll back to full strenght. They are going to purchase materials either way so if they try and save money by using scrap to make other dolls this just incurs more costs.

- Currently the company has a second plant that is specifically producing cribs for the doll. They should try and close down this plant because the costs are too high. They already expanded production at their first plant. If they focused on there original line, they could put the crib production in the first plant. Thus saving all the money from having to run a second plant.

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