...Assignment 9: Managing Labor Cost Cheryl Cunningham Professor Laura Sankovich Compensation and Benefits Management June 9, 2013 INTRODUCTION “There are two major approaches to coming up with budgets for any home, small business, or larger company: the traditional method of budgeting is known as bottom-up budgeting, though many businesses and corporations, along with the United States government, are moving towards more top-down budgeting, particularly during times of fiscal stress (Peterson, 2012).” BOTTOM UP The components of the Bottom Up approach are as follows: Instruct managers in compensation policies and techniques, distribute forecasting instructions and worksheets, provide consultations to managers, check data and compile reports. Analyze forecasts, review and revise forecasts and budgets with management, conduct feedback with management and monitor budgeted versus actual increases. TOP DOWN Top down approach the budget starts with an assessment from upper management of the pay increase budget for the whole organization. Once the total budget is determined, it is then distributed to each manager, who plans how to dispense it among assistants. Planned pay-level rise is another approach of top down which is the percentage increase in average pay for the unit that is planned to happen. There are several factors that come into play on how much increase the average pay level for the next period and they are as follows: how much the average level...
Words: 627 - Pages: 3
...methods might help in managing high food costs in the kitchen operations (Cousins, 2014). Firstly, Wastage has a significant effect on food costs when there is an unexpected increase in the weekly food cost. Use a waste log book to record food spills or wrong food order. Chef Grant’s team can record food waste when it happens. Another advantage of using waste log book is they might find items that customers do not like which Chef Grant and his team can remove or adjust from the menu to avoid wastage (RestaurantOwner.com, 2018). Secondly, to have an inventory report on key items is an effective way to manage items consistently and accurately on a daily basis to help control the costs to lower variance and their food costs (Walker, 2010). Usually, discrepancies will show up in the inventory reports. Store managers who receive the inventory reports will have time to remedy the potential problems such as waste in the kitchen, improper costing, or poor recipe control and adjust par levels of inventory (Food Trade Review, 1994)....
Words: 1387 - Pages: 6
...system for production and marketing of goods or services (Farnham, 2010). Managing consultant uses the information come out of this process to develop economic models, which it can help to understand the business environment. Additionally managing consultant applies the economic theories to business decision making (Michaels, 2011). According to previous information for this firm the factors that will have the greatest impact on plant operations are workers, maximum outputs, labor time, and variable costs. Currently, the managing consultant will work with special attention in the marginal cost to design the economic model (Michaels, 2011). The fixed cost is a constant expenditure that will not change over the time. Variable costs include all of inputs such raw materials used to produce the units, labor, location, but it will change if the production increase or decrease. Managing consultant will evaluate different scenarios in the interior of the economic model that will support the making decision process. Managing consultant will value external factors such as supply and demand, constraints (physical, time, and financial constraints), normative economics, competition, bias, efficiency, and different markets (Michaels, 2011). Finally, managing consultant is a professional that seeks to maximize the company’s profit with the production function, assess to adjust the inputs, and to generate outputs at lowest cost (short-run production or long run) (Michaels, 2011). Management’s decision...
Words: 1503 - Pages: 7
...Managing Staff Donald Musgrave HCA/270 Financial Matters For Health Care Professionals January 29, 2014 Kevin Scheponik Managing Staff Managing staff can be very challenging, understand the cost of productive and nonproductive work may be as important as any other cost the company may have to plan. Knowing the cost tied to staffing can help a manager to see the labor burden that is present in the current budget. Having choices in using annualized or scheduled-position methods are important steps to plan for future cost and recording the benefits of both will bring the health care manager budgeting options for the organization. The cost of staffing is a burden that healthcare managers have to plan for in order to provide a profitable service delivery system. The hours that an employee works as well as the rate of pay are the main ingredients of the health care managers concerns when it relates to staffing and budgets abilities (Feldman, 2013). Defining the productive work hours from the nonproductive work hours is not a difficult task; it is the ability to understand how nonproductive hours need to accounted for within the budgeting process. The differences that separate the annualized method and the scheduled-position method for a healthcare manager start with an understanding of how to stabilize the cost of labor within the organization. With the annualized method, a manager can plan for the cost of each employee concerning his or her hourly salaries, vacation...
Words: 739 - Pages: 3
...Michigan State University University of Wisconsin-Madison ) Cornell University McGraw-Hill Irwin ENT; Preface vi 1 Human Resource Management: Gaining a Competitive Advantage 2 Enter the World of Business: Starbucks: HR Practices Help Focus on the Brew, Weather the Recession, and Prepare for Growth 3 Introduction 4 What Responsibilities and Roles Do HR Departments Perform? 5 Strategic Role of the HRM Function 7 Demonstrating the Strategic Value of HR: HR Analytics and Evidence-Based HR 10 The HRM Profession: Positions, Education, and Competencies 11 Competitive Challenges Influencing Human Resource Management 14 Key Terms 61 Discussion Questions 61 Self-Assessment Exercise 62 Exercising Strategy 62 Managing People Skill Shortages Make It Difficult to Fill Positions and Customer Orders 63 Twitter Focus 64 Notes 64 Parti The Human Resource Environment 69 2 Strategic Human Resource Management 70 The Sustainability Challenge 14 Enter the World of Business: HP's New Strategy 71 Evidence-Based HR 24 Introduction 72 Competing through Sustainability Volunteerism and Going Green Are Reaping Dividends for Employees, Communities, and the Environment 30 What Is a Business Model? 72 GM's Attempt to Survive 73 What Is Strategic Management? 74 Components of the Strategic Management Process 75 Linkage between HRM and the Strategic Management Process 75 The Global Challenge 44 Competing through Globalization Apple...
Words: 2982 - Pages: 12
...budget 17 Flexible budget 17 Different between fixed and flexible budget 17 Functional budget 18 Sales budget 18 Production budget 18 Direct material usage budget 18 Direct material purchase budget 18 Direct labor budget 18 Factory overhead budget 18 Selling and administration budget 18 Cash budget 19 Master budget 19 3.3 Prepare budgets according to the chosen budgeting methods based on the given information in the scenario. 20 Sales budget 20 Production budget 22 Direct material usage budget 23 Direct material purchase budget 26 Direct labor budget 28 Factory overhead budget 30 Selling and administration budget 34 Departmental budget 35 3.4 Also prepare a cash budget. 38 Cash budget 38 Master budget 42 Budgeted profit and loss 42 Budgeted balance sheet 43 Final review 46 Budget committee 47 Working capital 47 Liquidity ratio 47 ROCE 47 4.1 Calculate variances, identify possible causes and recommend corrective action. 48 4.2 Prepare and operating statement reconciling budgeted and actual results. 55 Operating Statement 55 Profit and loss statement 56 4.3 Write a memo and report findings to management in accordance with identified responsibility centers based on the above findings. 58 Cost center 59 Revenue center 59 Profit center 59 Investment center 59 Memo 60 Report 61 Conclusion 66 References 67 Appendix 69...
Words: 12261 - Pages: 50
...Operational Decisions Strayer University July 19, 2012 Assume you have been hired as a managing consultant be a company to offer some advice that will help it make a decision as to whether it should shut down completely or continue its operations. It currently uses 100 workers to produce 6,000 units of output per month (working 20 days/month). The daily wage (per worker) is $70, and the price of the firm’s output is $32. The cost of other variable inputs is $2,000 per day. You are told that the firm’s fixed cost is “high enough” so that the firm’s total costs exceed its total revenue. The marginal cost of the last unit is $30. 1. Briefly describe the details of the fictitious business that you created for this assignment. The company I was hired for as a managing consultant, Press Body Nutrition is a privately owned company that currently makes the highest quality of protein powder for athletes pro level and none pro worldwide. At this moment, my client has produced 6,000 units of protein powder per month, and employs about 100 employees. The factory operates for 20 days a month for a typical 8 hour work day. Every Unit of protein powder that is producing the company gets $32 and has a variable cost of $2,000 per month. Employees at Press Body Nutrition currently make approximately $70 a day. 2. Assess the current environment scan factors. Determine the factors that will have the greatest impact on plant operations and management’s decision to continue...
Words: 935 - Pages: 4
... | |To: Prof. John Wright | |From: Group 8 | |Re: Challenges of managing an Airline | |Date: Sunday, April 5, 2014 | |A challenge of managing the business of an airline which are categorized by high fixed costs are, keeping opportunity costs low while remaining | |competitive in the industry, and by making tradeoffs to develop a comparative advantage. Airlines must be abreast of seasonal changes and economic | |developments to be efficient and cost-effective. Implementing...
Words: 905 - Pages: 4
...markets are merging * It no longer makes sense to talk about the “German market” or the “American market” * Instead, there is the “global market” * falling trade barriers make it easier to sell globally * consumers’ tastes and preferences are converging on some global norm * firms promote the trend by offering the same basic products worldwide What Is The Globalization of Production? * Firms source goods and services from locations around the globe to capitalize on national differences in the cost and quality of factors of production like land, labor, and capital * Companies can * lower their overall cost structure * improve the quality or functionality of their product offering * Firms source goods and services from locations around the globe to capitalize on national differences in the cost and quality of factors of production like land, labor, and capital * Companies can * lower their overall cost structure * improve the quality or functionality of their product offering Why Do We Need Global Institutions? * Institutions * help manage, regulate, and police the global marketplace * promote the establishment of multinational treaties to govern the global business system * Examples include * the General Agreement on Tariffs and Trade (GATT) * the World Trade Organization (WTO) * the International Monetary Fund (IMF) * the World Bank * the United Nations (UN) What Do...
Words: 790 - Pages: 4
...Operations Management MGT 203 MANAGING EFFICIENCY AND PRODUCTIVITY Week 11 Dr Pieris Chourides Productivity • A measure of performance. • Broadly a ratio of output to input, i.e. comparing amount produced (output) with resources used (input) • Materials, machinery, labour, capital, energy --- a combination • What improvements have there been over the last 50 years in – construction productivity – payroll processing – Car servicing – banking • How do we evaluate productivity levels and identify areas for improvement? Managing Productivity • Productivity – An economic measure of efficiency that summarizes the value of outputs relative to the value of the resources used to produce them. Levels of Productivity • The unit of analysis used to calculate or define: – Aggregate productivity—the total level of productivity for a country. – Industry productivity—the total productivity of all the firms in an industry. – Company productivity—the level of productivity of a single company. – Unit productivity—the productivity level of a unit or department. – Individual productivity—the productivity attained by a single person. Forms of Productivity • Total factor productivity–an overall indicator of how well an organization uses all of its resources (i.e., labor, capital, materials, and energy) to create all of its products and services. Outputs Productivity = Inputs Forms of Productivity • Labor productivity–a partial productivity ...
Words: 957 - Pages: 4
...Developing Good Business Sense XXXXX BUS 210 XXXXX XXXXXXX Developing Good Business Sense For this assignment I chose three different fast food restaurants; The Dog House, Gene and Jude’s Hot Dogs and Wiener’s Circle. All three are fast food restaurants in three different Chicagoland areas. Their main specialty is the Chicago style hot dog. All three serve a great hot dog yet the businesses are very different. 1. The employees do their tasks in a similar way. Each place has an order taker that provides customer service. At the Dog House you are greeted by a very polite cashier, you place your order with her, take your ticket number and wait for your food. The kitchen staff makes your food and then another employee barks out your order number. Self serve on the beverages while you wait for your food. At Gene and Jude’s Hot Dogs you stand in a very long line and are greeted by an employee who you place your order with. Then you move along in what seems like a cafeteria line while they make your food in plain sight. Everyone behind the counter is working quickly to fill the orders made. You feel like cattle just moving along and quickly receive your food with a heart-felt thank you. At Weiner’s Circle there is also a long line and you place your order with the cashier. Here the cashier has a major attitude on purpose. The attitude of the staff is the shtick of the place as well as the food. Kitchen staff, in a kitchen that is visible, prepares...
Words: 896 - Pages: 4
...PuanEleySuzanaKasim our MAF635’s lecturer for her guidance and constant supervision as well as for providing necessary information regarding this project & also for her support in completing this project. We also would like to express our gratitude towards our parents & also our classmates for their kind co-operation and encouragement which help us in completing this project. Our thanks and appreciations also go to the group members in developing this project and people who have willingly helped us out with their abilities. 2.0 INTRODUCTION The Chartered Institute of Management Accountants (CIMA) has stated that an activity-based management (ABM) is a process of using information from activity-based costing to analyze activities, cost drivers and performance so that customer value and profitability are improved. ABM also subsequently defined by CAM-I(Consortium for Advanced Manufacturing-International) as a discipline that focuses on the management of activities as the route to improving the value received by the customer and the profit achieved by...
Words: 1591 - Pages: 7
...owner either has to change (Daft, 2012, pg. 277). Organizational change is the adoption of a new idea or behavior by an organization. Successful change requires that organizations be capable of both creating and implementing ideas which can be difficult if employees do not have the desire or motivation to come up with new ideas (Daft, 2012, pg. 278). Jim Malesckowski, the President of Wisconsin Specialty Products Division of Lambert, Inc., is faced with high labor cost due to the union in their American plant with the possibility of closing the plant and moving it to Mexico. In analyzing this company, I will describe the issues faced by Malescowski and the company and the reasons for these issues. Secondly, I will describe a strategy for changing things that would help resolve the situation at hand. Thirdly, I will describe a strategy for changing people that would help resolve the situation at hand. Lastly, I will discuss the arguments that Malesckowski can present to the union. One of the major issues the high labor cost due to the company having a union in which the union officials refuses to lower salaries. Trade unions rose to prominence at a point when industrialized countries were growing at a staggering rate, employee safety was often secondary to profits and job security was non-existent. Today, many of those issues have been corrected, in large part by the work of unions. Modern unions have shifted their focus to a number of targeted issues and work with management...
Words: 1079 - Pages: 5
...made and accompanied by supporting evidence. First, the following is a brief overview of the budget and budget process. Budgets are an indicator of the costs and revenues linked to each of the companies activities and a way of providing information and supporting mangement decisions throughout the year (Nobles et al., 2014). Budgeting requires managers to plan for the company’s future based on a formalized plan (Nobles et al., 2014). In order to begin this cyclical, formalized plan, companies must first establish their objectives (Nobles et al., 2014). Then the company formulates stratgies to achieve these objectives and creates a budget based on these strategies (Nobles et al., 2014). After the budget has been prepared, business operations (i.e. production, processing, etc.) begin and as financial periods end the results are compared to the initial budget (Nobles et al., 2014). Once the budgets are compared, the company can alter the existing strategy or develop an entire new one, and then continue on through the budget process (Nobles et al., 2014). This company’s labor variances for 2015 were the following: Cost/Price Variance | 33,000 | Efficency Variance | (48,000) | Total Variance | (15,000) | The positive cost/price variance of 33,000 is favorable and means that the company is doing well at keeping the labor inputs within the budgeted standard. (Nobles et. al., 2014). The negative 48,000...
Words: 1196 - Pages: 5
...Activity-Based Costing they can charge different prices and show how each activity is doing financially. 2. Compute the activity overhead rates for each activity: Activity 1) 91,700/131,000 = .70 Activity 2) 129,000/125,000 = 1.03 Activity 3) 123,900/59,000 = 2.1 Activity 4) 375,200/260,000 = 1.44 3. Product costs for each: a) Lance Armstrong unframed print. b) John Elway print in steel frame, no mat. c) Lambeau Field print in wood frame with mat. 4. In case 1 for Greetings, the overhead allocations using a traditional volume-based approach were $3.36 for Lance Armstrong, $4.48 for John Elway, and $5.60 for Lambeau Field. The total product costs from case 1 were Lance Armstrong $17.36, John Elway $33.48, and Lambeau Field $48.10. The overhead allocation rate for unframed prints, such as the unframed Lance Armstrong print in question 3, decreased under the ABC compared to the amount of overhead that was allocated under the traditional approach in case 1. Why is this the case? What are the potential implications for the company? The overhead allocation for unframed prints is lower in ABC because of the realization that there is far less labor overhead in relation to the Web Optimization of unframed prints verses the framed prints. This is the reason for the decrease in overhead allocation in the unframed prints. This means that the company will be able to...
Words: 726 - Pages: 3
