If the level of sales is high, Raw material Requirement will also be high which in turn will require more labor to process and manufacture this product. Direct labor which is a human resource will be recalculated on the basis of sales of 3 million bikes. It may happen to produce 1 million products, they require 50000 employees but to produce 3 million products they require 200000 employees and to be on safer size, 10% extra labor will be recruited which will give a total of 220000 employees. Therefore it is clearly understood that the company can prepare their Labor Requirement budget directly from the sales budget. The same concept will apply to overhead and capital expenditures because overheads are directly proportional to the production and if the sales are high, product will automatically are high.
Since company allocated fixed manufacturing overhead on each finished unit in absorption costing, until the company sells a unit, the fixed overhead cost would not neither be record as expense nor show in cost of good sold. That, if the company does not sell the entirely finished unit in the current period, fixed overhead incurred would be recorded as an asset in the current accounting period. This leads to an increase in value of inventory, instead of separating as a cost, profits may be manipulated if the manager accumulate and stock up the
- -General Overhead: Overhead costs are those you acquire to manage your business, such as rent, phones, advertising and cleaning services. These expenses incurred even when you’re not producing your product or service. To make reduces to these overhead costs down, Terry Gow, who is the manager of Hon Hai asks their marketing, sales, administration, human resources and information technology managers to submit individual budgets to Look at costs that can reduce without decreasing quality, for example: Tery Gow can meet with insurance workers to look in their treatments and deductibles to find possible cost
H&M has its own in this case. Firstly, H&M outsource production to global suppliers to reduce cost in manufacturing. Low wages countries are full of low cost labour and low cost input, thus helping H&M achieve its high levels of cost effectiveness, which in turn comes out as cheaper product price range. Outsourcing, in this case, helps H&M save the resources building initial plant, purchasing equipment, etc. Secondly, flexibility is another benefit outsourcing brings to H&M.
With the same factors as we mention before, buyers are buying a standardized product, while the seller to purchase products in the economy is also entirely feasible to multiple.Buyers can easily convert to other substitutes s the competitors can provide substitutes to replace Hup Seng with low transaction costs, customers can simply switch to other suppliers such as London Biscuits, Massimo and etc. Luckily, price of the products of Hup Seng still deem as standard than other biscuits manufacturers. Therefore, the bargaining power of customers is rated high due to the low switching
This is a new product that will likely be successful, so Hershey will have to compensate for the increased demand. If they decide to introduce this product into the global market as well, this will increase the need for more laborers even further. The same would apply for equipment. They would need more machinery and equipment of this sort for the production of this new product. They would likely need new machinery to stay true to the vegan concept.
The reason we say that we need to continue this product is due to the common fixed cost associated with it. A common fixed cost is a fixed cost that supports the operation of more than one segment of an organisation and is not avoidable in whole or part even if we try to eliminate one segment. The general factory overhead which itself has $27,000 associated with will still persist and will incur with other products in their overhead cost reducing the profit from other segments. This will drop the overall net operating income of the company. Hence to see it more clearly before making any decision, the company need to drop the overhead cost of company as it is a common cost to the company.
Make or buy decisions help a construction company decide if it is better to produce a product in-house or buy a product from an outside supplier. There have some advantages of make a product in-house and buy a product from an outside source. According to Burt, Dobler, and Starling, as well as Joel Wisner, G. Keong Leong, and Keah-Choon Tan suggested that favor making a part in-house is save money based on the less expensive to make the part. If a construction company can lower its materials cost by making products in house, they will be had bigger potential to save their business money. A business should balance the savings on materials against the added payroll cost.
ZHANG Shiyuan_HRM Human Recourse Management fascinates for me for the dynamism and challenge that it provides. A vital cog in the machinery of any business to maximize employee productivity, it is an interdisciplinary field relevant to the knowledge in policies and industries, business environment, organizational culture, essential skills in negotiation and leadership. I am hugely interested in grasping HRM knowledge for further integration with strategy consulting and management, which will be essential for establishing my career path. My first degree in International Communication Studies, which places great emphasis on analytical and highly interdisciplinary approach, has cultivated me with the literacy of communication, a significant quality needed for a practitioner in media and culture. I believe these skills are applicable to many disciplines but they fit particularly well with HR work, which enable me to use thorough knowledge in HRM to interactively think of the relationship between the company and employers to solve complex problems.