Dell's business plan is to promote a direct rapport with the client. They expect to have

this rapport by "merging its direct client model with an extremely effective production

and supply chain management company and a focus on standards-based systems." In

short, they wish to provide the client with the exceptional value of their item with a great

client service support network. This direct connection to the client is exactly what Dell

considers as the most crucial to enhance its client base and in maintaining old ones.

Through getting rid of the middle man, Dell expects to remove wholesale and retail

traders which increase time, cost, and might lack the product information sufficient

enough for Dell's standards. I would state that Dell depends mainly on customer

intimacy to preserve and get new clients. As said in their starting paragraph; "a direct

rapport is the most effective way to the client," it's obvious that they value the link with

their client the most. They also try to get rid of the middle man and wholesalers which

may discredit their item or not provide the level of service which they would require from

their own workers. There is also an internet site that clients can visit to assess Dell's

products and read comments on the items.

Theory of Constraints

"The theory of constraints is founded on the insight which effectively controlling the

constraint is a key to success" (Noreen and Brewer 2008, pg. 15). As the old saying

goes, you are just as powerful as your weakest link. A Rolls Royce having a flat tire isn't

going to run effectively or make it very far. The same analogy applies to my last place of

work. I worked being the administrator of a cafe in which customer care is everything.

Clients understand what they are receiving with the food and whether it's undercooked,

overcooked, and so on does not matter a great deal since that's quite easily fixable. The

service of the wait staff is everything and can really make or break a client's experience

Kranbrack Corporation

The measures of Mr. Gallant were completely immoral. We have observed in this

technologically advance times what bad accounting methods can do to an organization,

its buyers, and the economy. I believe the greatest ramifications of this method fall on

the shareholders, who can base their investing judgments on balance sheet and income

reports. In case these income reports are falsified or just simply incorrect, then the

investor is deceived into considering the organization is either under or overvalued.

The Fashion Shoe Company 

1. The break-even point is $510,000.

 

3. 12,000 shoes ($12 net profit/shoe)-150,000 = operating loss of $6,000

Downsizing and fixed cost

The post, Industry’s Downsizing Lessons, says that the automobile production industry,

the computer industry and a few government departments have got greatly started out

cutting down their fixed costs-mainly their long term salaried members of staff. This can

also be referred to as operating leverage which means, “The level to which they are

really focused on fixed expenses like for example property, factory, related equipment

and full-time salaried members of staff”.

Direct Labor: variable or fixed

I believe that direct labor is actually a fixed cost. To begin with, "administrators are

unwilling to reduce their workforce in reaction to short-term reductions in sales." As a lot

of time and money goes into training these workers, a short-term fall in sales doesn't

warrant workers getting fired since they are not quickly replaced. Next, "managers don't

want to be caught with a bloated payroll in an economic depression." This might be due

to an increase in sales therefore they don't want to over hire full-time people. As a

result, direct labor can be a fixed cost if the worker is full-time or part-time, however if

they are a temporary employees then I would think of them a variable cost.

Jet Blue 7-26

1. Jet Blue's technique entails becoming "a top low-fare, low-cost passenger

airline providing customers high-quality client service and a differentiated

product." They do this by concentrating on operational quality. They expect to

generate demand by keeping their reduced fares and enhancing demand with

"fare conscious" people. They also wish to spotlight low operating expense in

their business plan. They accomplish their reduced unit costs "mainly through

keeping high aircraft usage, operating just one aircraft type with a single type

of service, using sophisticated technologies and employing an incentivized

and productive labor force." They expect to reduce their operating cost

through enhancing aircraft efficiency, with an effective workforce, and by

having reduced distribution cost compared to their rivals.

Fixed labor

1. a.  Absorption Costing    

       

  Direct supplies   $48

  Variable production overhead   $2

       

  Total variable production cost   $50

 

Fixed production overhead ($360,000/12000

units)   $30

       

  Unit product cost   $80

       

  b.  Variable Costing    

       

  Direct supplies   $48

  Variable production overhead               $2

       

  Unit product cost   $50

       

Profitability

1 First-Stage Allocations to Activity Cost Pools

Activity Cost Pools

 

 

Cleaning

Carpets

Travel to

Jobs

Job

Support

 

Other

 

Total

Salaries  $ 105,000  $       30,000  $         -    $   15,000  $     150,000

Cleaning Materials  $   40,000  $              -    $         -    $          -    $       40,000

Cleaning Equipment

depreciation $   16,000  $              -    $         -    $     4,000  $       20,000

Auto Expenditures  $          -    $       48,000  $         -    $   32,000  $       80,000

Office Expenditures  $          -    $              -    $ 27,000  $   33,000  $       60,000

President's

Compensation $          -    $              -    $ 32,000  $   48,000  $       80,000

Total  $ 161,000  $       78,000  $ 59,000  $ 132,000  $     430,000

Master budget exercise

Exercise 8-12

1. Jessi Corporation

Sales Budget

 

   

1st

Quarter

2nd

Quarter

3rd

Quarter

4th

Quarter Year

  Budgeted unit sales............. 11,000 12,000 14,000 13,000 50,000

  Selling price per unit............ × $18.00 × $18.00 × $18.00 × $18.00 × $18.00

  Total sales.......................... $198,000 $216,000 $252,000 $234,000 $900,000

             

Schedule of projected Cash Collections

             

 

Accounts receivable, starting

balance............. $ 70,200       $ 70,200

  1st Quarter sales.................. 128,700 $ 59,400     188,100

  2nd Quarter sales.................   140,400 $ 64,800   205,200

  3rd Quarter sales..................     163,800 $ 75,600 239,400

  4th Quarter sales..................                                                                     152,100   152,100

  Total cash collections........... $198,900 $199,800 $228,600 $227,700 $855,000

Behavioral aspects of budgeting

As per Noreen, Brewer and Garrison (2011), budgetary slack is when an administrator

creates deliberate slack (i.e. decreases figures to an easily attainable number) in a

budget. This frequently happens when a manager’s pay is linked to achieving budget

objectives. Atkins and Granger may behave in this way if they are afraid of they will be

“punished” or fined if forecasts aren't met. They also may act this way in case their

benefits are dependent on their capability to achieve projection levels. Budgetary slack

may cause negative effects of excessive output and resulting stock in case the sales

predictions are reduced and conversely, too little production as well as a shortfall of

stock in case sales forecasts are enhanced.

Critiquing a cost report

Going through the Freemont Corporation -Machining Department report it is possible to

observe how the manager might be annoyed. All the variance unfavorable and the

division went more than budget. This report however is a bit deceptive. The division

worked 3000 additional machine hours than they scheduled for which caused the

variable and mixed cost to increase. This is known as activity variances “since all the

variances on this report are only because of the difference in the level of activity…”

(Brewer, 2011, p. 339). To me this is an illustration of a manager who must cease using

the budget as a pressure device as well as examine what is actually happening.

 

Freemont Corporation-Machining Department

Flexible Budget Performance Report

For the Month Ended June 30

  Planning

Budget

Activity

Variances

  Flexible

Budget

Revenue

&

Spending

Variances

  Actual

Results

Machine-

Hours

35,000     38,000     38,000

               

FedEx’s technique for achievement in the market involves the organization continuing to

leverage and expand one of their biggest assets, the FedEx brand name, and to offer

their clients with easy, smooth access to their whole portfolio of integrated business

solutions. They are also following several initiatives to carry on increasing the FedEx

customer experience, including increasing the capabilities of our sales experts. (1)

FedEx depends on operational quality as obvious by their effort to support global

expansion by adding air flights, buying planes, enhance capacity and improve services

back and forth from Asia and Europe depending on the expansion prospects of these

areas. They also intend on growing network capacity at their expanding FedEx Ground

and FedEx Freight organizations. For example, they hope to enhance FedEx Ground’s

daily package pick-up capability to roughly 5 million by 2010. (1)

Variance analysis in a Hospital

 

Materials Price Variance

(AQ x AP) – (AP x SP)

(12,000 x 2.35) – (12,000 x 2.50)

28,200 – 30,000= -1,800

Valley View Hospital

Variance Report – Purchasing Department

Item

Purchased

Quantity

Purchased

Actual

Price

Standard

Price

Difference

in Price

Total

Price

Variance

Explanation

Small

Glass

Plates

12,000 2.35 2.50 .15 1,800 F The plates

being

bought are

at a good

price to the

standard

price

 

Perverse Effects of Some Performance Measures

1. Speed to Market: Items that might reduce performance levels would be the

launch of products which haven't finished the required development by being

launched too soon. Consumer comments, market testing and the fact of early

launched products have a greater tendency for product recalls. To solve these

problems a standard operating method is necessary to any product before it is

launched into the market. Market approval is essential to the R&D before the

launch of any product.

Cost Management is among the most important factor of book keeping. In fact, book

keeping is the basis of business and without it, companies would struggle. It is this

struggle that great accountants as well as administrators avoid. By cautiously recording

each bill, expenditure, and so on. A great accountant can make suggestions on the

soundness of the organization to administration and they can consequently make

management decisions on what the organization can do better so as to control their

expenditures better. This is where the significance of cost management comes in since

without correct documents organizations might exhaust money quickly.

Make or buy

Han Products

 

TOTAL COSTS – 30,000 Units of S-6

Manufactur

ePurchase

Direct supplies 108,000    

Direct labor 300,000    

Variable production overhead 72,000    

Net Present Value Analysis

CAR WASH  

   

Requirement 1: Net annual cash flows      

Average weekly use of car wash and vacuums:      

  Gross Per use Uses   

Car wash 1,350 2.00 675    

Vacuums 405 1.00 405