ABC Company is a small contract manufacturing business. They are located in a small town and employ 33 people. They own an 80,000 square foot building that is built on 66 acres. They manufacture their own product and also do contract manufacturing for other customers. ABC Company has been approached by a new customer requesting ABC Company to manufacture their product with the new customer’s brand name. At this time, ABC Company is running the manufacturing line for this product for another customer and is running at capacity on first shift. The owners of ABC Company think they would like to build an expansion to the building to run another complete line. This would also open space for warehousing the new finished product and additional raw materials. The same raw materials would be used to manufacture this product, but at larger quantities per week. The only new materials would be the label and outer box with the customer’s name on them. The owners feel that adding on to the building and expanding to an additional manufacturing line would open up more opportunities for additional customers. ABC Company has hired the consulting firm of CEG Consultants to look into the financing of this project and to see if this is the best decision at this time. Besley & Bringham (2008, p. 148) write that “if a firm is considering whether to increase operations by adding capital projects to existing assets that will help produce either more of its existing products or entirely new products, expansion decisions are made.” CEG Consultants will review all options to best benefit ABC Company for their decision. We realize that the owners of ABC Company are leaning toward a building expansion, but we are hired to bring other optio... ... middle of paper ... ...1 Property Taxes $16,139 $18,559 Utilities $120,861 $138,990 Other Fixed Expenses $296,000 $340,400 Other G&A Expenses $83,628 $96,172 Total Expenses/Income $2,265,060 $2,555,613 TOTAL PROFIT(LOSS) $706,873 12% $999,922 15% Works Cited Besley & Brigham. (2008). CFIN (Student ed.) Mason, OH: South-Western. Birn, R.J. (2004). Chapter 01: Key to making good decisions. London: Kogan Page Ltd. Marshall, D.H., McManus, W.W. & Viele, D.F. (2011). Accounting: What the numbers mean (10 ed). New York, NY: The McGraw-Hill Companies, Inc. Previts, G.J., Bricker, R.J., Robinson, T.R. & Young, S.J. (1994). A content analysis of sell-side financial analyst company reports. Accounting Horizons (June 1994). 8, 2, 55-70. Rumelt, R. (2011). The perils of bad strategy. McKinsey Quarterly, (1), 30-39.
When looking at a particular discourse community, one can come across a number of genres that are appropriately applied to articles geared toward the discourse community. Looking at the discourse community of the stock market, the two genres that appear the most often are news articles and analysis articles. Both of these genres can be written with an intended audience of either people within the discourse community, or people on the outside of the discourse community. The key point of differentiation, is the language that is used throughout the writing. It can be written using terminology that only people within the discourse community understand, or in a way such that everyone will understand exactly what is meant by the author. In comparing these two genres and two types of audiences, we can better understand exactly how the stock market discourse community is portrayed not only among its insiders, but to everyone else as well.
Merbatty is a boat company with an estimated 8% market share. This company has been in the boat building business for 33 years. Merbatty has wealthy and successful customers that focus more on the quality of the boats than the price. Thus it is important that they get more affordable but high quality material from the right suppliers. The company has put aside a lot of capital to expand over the next 5 years; this 5 year plan will help reach their profitability targets. They are mostly situated in and around the USA and Europe. It has come to their attention that the market has become more competitive and they find it difficult to reduce their cost. The sales made for the company are mostly made by sales agents around the world
The company wishes to expand its trade in various countries in order to increase its revenue. Although there are risks in this expansion, the company expects to make huge returns once it enters the international markets. The company wishes to expand its resources by using $5.5 billion in an Ohio-based regulated electric utility DPL. This expansion plan is expected to influence huge returns because it will increase the power output generated by the company (Business Wire, 2011).
Romney, Marshal, and Paul Steinbart. Accounting Information Systmes. 10th ed. Upper Saddle River: Pearson Education, 2006. 193-195.
The literature suggested that “Rapid changes in the external environment of organisations have been accompanied by calls for accountants to change the nature of information they provide, the skills they possess and the role they play in the organisation. The proposed changes, which are encapsulated under the phrase accounting for strategic positioning or strategic management accounting are two pronged. On one hand accountants are required to reposition themselves in the organisation hierarchy where they will be involved in the formulation, implementation and choice of strategies. Accountants are also being urged to adopt a range of techniques whose emphasis is futuristic and external to the firm especially emphasizing the importance of monitoring customers and competitors.” (Nyarnori, 2000). Based on my studies on the industry of stock brokerage, I agree with the statement that “The tools and techniques that were covered in the Strategic Cost Management and Strategic Business Analysis courses are very useful in providing decision oriented information to senior management in my organisation and such information will ultimately enhance its corporate value.” The essay (How Porter’s Five Forces Model shapes strategy for a new and small-size stockbroker) may be one of applications of those techniques learnt from the Strategic Cost Management and Strategic Business Analysis .
In many corporations, money (profit, capital, and revenue) is what motivates activities and decisions. One of the major goals of corporations, shareholders, and managers is to maximize profits (Brealey, Myers, & Marcus, 2015). Money plays a significant role in the success of a business. However, money can also play an equally significant role in a corporation’s decline and failure. Money can be a motivating factor for innovation and change or corruption and unethical behaviors.
The company is using a batch shop process flow structure. CBF, Inc. bases its board fabrication process on the average job size or on its typical order. This means that the company proceeds with the manufacturing process in batches so as to meet the specific requirements per order. The typical contract that the company currently gets is 60 boards per order. However, due to persisting factory defects, they manufacture a total of 75 boards per batch in order to compensate for 20% of the boards that they typically reject during the process.
Marshall, M.H., McManus, W.W., Viele, V.F. (2003). Accounting: What the Numbers Mean. 6th ed. New York: McGraw-Hill Companies.
Dutta, Sunil, and Stefan Reichelstein. Accrual Accounting for Performance Evaluation. Research Paper Series 1886 (2005): 1-35. Print.
Our team has been instructed to help advise on a business case involving a restaurant, The Mongolian Grill. It’s owner, John Butkus, is contemplating renovations, in hopes of adding capacity and increasing revenue. There are several scenarios that are available to him. One option is to add an extra food bar. The second option is to move the location of the cooking area. He can also implement both options, if he so chooses. Our team has done the appropriate financial calculations, as well as qualitative considerations.
Schofield (2014) researches the difference between public and private company financial reporting. For instance, a private company has fewer consumers reviewing their financial statements, whereas public companies could have multiple consumers reviewing financial statements. In addition, private companies typically have less specialized accounting personnel, whereas public companies will have several. Lastly, Schofield (2014), reviewed the number of amendments proposed and finalized to help benefit private companies financial reporting.
Hansen, D. & M, Maryanne (1997). Management Accounting 4th Ed, South Western College Publishing Company..
Describe what the authors identify as the basic elements of a biblical approach to economics.
According to the conceptual framework, the potential users of financial statements are investors, creditors, suppliers, employees, customers, governments and agencies, and the general public (Financial Accounting Standards Board, 2006). The primary users are investors, creditors, and those who advise them. It goes on to define the criteria that make up each potential user, as well as, the limitations of financial reporting. The FASB explicitly states that financial reporting is “but one source of information needed by those who make investment, credit, and similar resource allocation decisions. Users also need to consider pertinent information from other sources, and be aware of the characteristics and limitations of the information in them” (Financial Accounting Standards Board, 2006). With this in mind, it is still particularly difficult to determine whom the financials should be catered towards and what level of prudence is necessary for quality judgment.
Williams, J. R., Bettner, M. S., Haka, S. F., & Carcello, J. V. (2008). Financial & managerial accounting: The basis for business decisions (14th ed).Retrieved from http://highered.mcgraw-hill.com/sites/0072996501/student_view0/.