that two of the three component raw materials used to produce marconil are by-products from industrial processes and are reasonably stable. The third component raw material is the unknown. Further, we have heard rumors in a few years a much lower-cost substitute material for marconil might be developed. SIGNIFICANT FACTORS: 1. Potential interruption of supply of marconil (used for air filters) will have negative effect on sales revenues. 2. Current suppliers are pressuring Sabor to enter into
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competitive position and potential. After collecting data and doing interview, the consultants put the products in the following classification: Class 1: Fuel tanks (having costs equal to or lower than competitors’ costs) Class 2: Manifolds, Front and rear doors (having costs 5%~15% higher than competitors’ costs) Class 3: Muffler-exhaust systems and oil pans (having costs more than 15% higher than their competitors) For the class 1 product, it should be contained. Products in class 2 should be
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Bridgeton Industries Automotive Component and Fabrication Plant The union has worked with us and has even led in cost reduction programs. Now corporate is talking about outsourcing additional products. What more can we do to keep the business? mike lewis, plant manager The Automotive Component and Fabrication Plant (ACF) was the original plant site for Bridgeton Industries, a major supplier of components for the domestic automotive industry. The history of the
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cost vs expense Cost and expenditure are closely related. You spend your resources in return for another thing of value. SUMMARY: 1. Cost is used on something that has returns, while expenses are expenditures used on things that depreciate. 2. Cost is reported in the balance sheet because it means more funds will come to the balance sheet after the expenditure. Expense on the other hand, is reported on the income sheet because it will be taking away funds from the income sheet in making the expenditures
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Investigating Business Resources Introduction: In this assignment I will talk about what can happen to a business if costs and budgets are unmonitored. A budget is a plan for a distinct period of time. It may include things like planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows. It expresses premeditated plans of business units, organizations, activities or events in measurable terms. Budget helps to assist the planning of actual
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commercial, and consumer equipment. Other products and services produced by Deere include equipment financing, power systems, special technologies, and healthcare. Net sales in 2006 were over $19 billion with total assets of more than $34 billion. Cost of goods sold in 2006 was approximately $15 billion. Complex Parts, Inc. had been a supplier of John Deere for the past 10 years with annual sales to their Moline unit of approximately $3.5 million. They supplied Deere with a key manufactured part
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to value inventory and measure the cost of goods sold. However, practitioners are facing various challenges using the traditional costing systems in today’s competitive environment. Cost and Management Accountants in a globalize world are now expected to be team players in such areas as product development, profitability analyses, quality process and improvements, and the evaluation of overall company performance (Welfle and Keltyka, 2000). As a strategic cost management tool, activity-based costing
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Organizing a Cost- Reduction program The Bottom Line * You need a multidisciplinary team to attain significant cost- reduction. Support from the top helps greatly. * Encounter resistance to the cost reduction effort * There are risks associated with cost – reduction opportunities * Meet at least once a week * Maintain an action plan to create and sustain reduction momentum. * Someone who writes well and is good in capturing details should take notes and publish meeting minutes no later than
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issue of the Carson Manor study is to reduce cost on a per-bed basis to be in-line or near the state average. Currently Carson Manor costs are approximately 14 percent higher than state averages on a per-bed basis. -Subsidiary issues Subsidiary issues include; finding goods and services at minimum cost that will be consistent with desired quality, delivery timing, and reliability. Carson Manor has had issues with measuring and controlling costs. Without change, nurses will not be able to
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freight carriers. The company is unsure how to classify your annual salary in its cost records. The company’s cost analyst says that your salary should be classified as a manufacturing (product) cost; the controller says it should be classified as a selling expense; the president says that it does not matter how your salary cost is classified. Required: Explain the effects of using each of the cost classifications recommended by the three individuals, and make a recommendation as to which one
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