Société Générale Case Study: An Introduction To A Company

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Société Générale AGENDA Introduction to the case Questions Evaluation of the cost system Correction Operating income Suggestions Evaluation of the exceptional order possibility Solutions Conclusion INTROCTION TO THE CASE Company active in the electronic components sector: Main product: Cathodes ray tubes Possible application: INTROCTION TO THE CASE Production of cathodes ray tubes: Components bought outside: Glass tubes Electron guns Visual control of the tubes Using a special machine to glue guns INTROCTION TO THE CASE 2 products to examine: Tube of 6 inch in diagonal Tube of 10 inch in diagonal Total average unit cost for the past 18 months: Fabrication Working schedule: 8 hours per day 20 days per month 11 months per year Cost of labor (EUR/unit)…show more content…
Corrected total unit cost Monthly production: 6-inch model: 1,920 units 10-inch model: 1,280 units Total: 3,200 units Direct and indirect variable costs Depreciations General Expenses Financial costs Overcapacity costs Corrected total unit cost Question 3 Calculate the monthly average operating income for the last 18 months. Operating Income Question 4 Which measures could we recommend to the company in order to improve the profit levels obtained in the income statement? QUESTION 4 Observation: Both models create losses when they are sold in quantities greater than 99 pieces per order. Propositions: Increase production level (Better use of the capacity), Increase the selling prices for big quantities Question 5 Société Générale received an exceptional order for 1’060 units of 6-inch tubes for a month, in addition to its regular production. Because he is running out of time, the client is ready to pay a unit price of € 88. Determine whether Société Générale should accept this order. Additional order Monthly production: 6-inch model: 2,980 units 10-inch model : 1,280 units Total: 4,260 units SOCIETE GENERALE: Additional

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