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
A work piece of size 90*65*12 is required for manufacturing the
Exercise 7-13 I have to announce everyone in the group that we will not be able to meet the June 1 commitment to ship 100 operating tables to Southeast Surgical Supplies. To be clear, we only have 30 tables on hand as a report of this morning. However, this is not our fault entirely. Six months ago, purchasing warned us about shrinking supplies and suggested we buy as much as we could in advance for the next 12 months. We tried to follow their advice, but we were never be able to buy supplies in advance due to company’s policy about never buying more than three months worth of materials in advance.
Sale mix of Aerosol (66%) + Fogger price ($2.79) x sales mix Fogger (34%) = $3.02 o Weighted average unit contribution: Aerosol price ($3.14) - COGS of aerosol ($1.41) x sales mix % of aerosol (.66%) + Fogger price ($2.79) -COGS of fogger ($1.26) x sales mix % for fogger 34%) = $1.66 Table2: Break-Even Fixed cost $1,478,000 Weighted average unit contribution $1.66 BE Unit volume 890,362 BE Dollar sales $1,178,893.24 • Computations o BE unit volume: Fixed cost ($1,478,000) /
So the practical capacity for this employee would be 36 hours a week. Month Actual Machine Hours Monthly Overhead
The cost of resources and cost of resources by work package I found out by selecting resource usage option from the view menu. The total cost of all the resources by totaling up the individual costs of the resources is $55,600. In my opinion this is a reasonable cost given the overall budget of $100,000. But it has to be ensured that the equipment, inventory and rest of the materials that need to be procured should be done with the remaining amount of $44,400.
Sincerely, Team Odyssey Exhibit 1 – Options Areas of Concern Option 1 Option 2 Option 3 Financial Aspect Net loss of $2M – one time cost. Increase in annual cashflow: $4.9M to 5.6M; one time transferring cost of $25M Cost of upgrading,tool maintenance - $2M loss. On going performance lag on company - $4.64M Capital Intensive – Need $32M for building the new plant. Increase in annual cash flows : $3M Operational Aspect Products are transferred from job shop environment to batch shop.
The pumps that the Wilkerson company produces are the “bread and butter” of this company. These products are produced at a high rate with a high price competition. As stated earlier, due to the severe price cutting by the competitors, the pre- tax margin of the company dropped extremely low to 3% percent and gross margin to 19.5%. Another product that the company produces are valves. The valves have remained steady around its planned gross margin of 35% with actual of 34.9%; these products are sold and shipped in huge bulk.
The manufacturing is done with help of skilled labor. The skilled labor is one of the major strengths for Olympia, they not only carry out the painting job, various operations on the floor (the floor workers) but also manage the mate assembly line operations (called the assemblers). The operating expense of all the machines, raw material costs and overheads and the Labor costs and overheads are mentioned in the EXHIBIT 2. The expenses for all the assembly lines are given separately except for the case of Interior Assembly Machine assembly line, which also includes the cost of labor that is being used to operate on these machines.
Assignment: Portfolio Income & costs and profit measures of performance Alibaba.com is a China’s B2B e-commerce company which owns a U.S. IPO that worth $25 billion has become the largest B2B e-commerce company in the world in just a few years and barely anyone expect the company can achieve this results so successful. Referring to the Appendix A, the income of Alibaba has been increasing from year 2010 to 2014. This is because of there has a few key factors of success that carried out by the founder of Alibaba.com, Jack Ma to operate the e-commerce business in the global marketplace.
Derek Rotz MBA-502-61/03 3/2/18 In the case of Ace Fertilizer Company, Assistant Director of Manufacturing , Abby Conroy is faced with an ethical issue that was presented to her by boss George Smilee who is the Director of Manufacturing. Ace Fertilizer’s business is to produce lawn & gardening fertilizer, and the company is known for delivering the highest quality special order products. The fact that they can deliver on time with top quality is what helps to drive their business. They use a consistent mark up on special orders at an 80% mark up over the cost of the orders.
Technology and optimization ensures that the supply curve moves towards the left. 3. NUMBER OF
OB Team Project Team 5 HOW LG ELECTRONICS – R&D DEPARTMENT COPE WITH CHANGES IN VIETNAM SMARTPHONE MARKET I. General Information about LG In 1958, LG Electronics was founded as GoldStar. LG Electronics produced South Korea 's first radios, TVs, refrigerators, washing machines, and air conditioners. Gold Star was one of the LG groups with a brethren company, Lak-Hui (pronounced "Lucky") Chemical Industrial Corp. which is now LG Chem and LG Households.
What options may be available? Alice, Inc. may devote greater part of manufacturing support costs as well as direct costs on production of Regular model and decrease production of Deluxe
SPORT OBERMEYER, Ltd. EMBA – SEPT 15 – ENG-BL – S2 TEAM A 1. Using the sample data given in Exhibit 10, make a recommendation for how many units of each style Wally Obermeyer should order during the initial phase of production. Assume that all ten styles in the sample problem are made in Hong Kong, and that Obermeyer 's initial production commitment must be at least 10,000 units. (Ignore price differences among styles in your initial analysis.)
EXECUTIVE SUMMARY TABLE OF CONTENTS Executive Summary 1 Introduction 3 Competitive Situation 4 Variable Costing 5 Existing Costing System 6 Diagram ABC 8 Activity Based Costing & Profitability 9 Conclusion 14 Bibliography 15 INTRODUCTION COMPETITIVE SITUATION Firstly, here is a brief description of what Wilkerson Company specializes in. According to our case study and various online sources, Wilkerson manufactures and markets a complete line of compressed air treatment components and control products.