However, an escalation in share prices and an apprehensive investment society has primed Classic to examination from all sectors. Rather, the organization should focus on activities performed by the indirect and support resource of the organization and try to link the cost of performing these activities directly to the products for which they were performed. Invest in new equipment Therefore eliminating time to clean vats in order to make new coloured pens. James Fulmer, chief executive officer of Allied Industries promoted his director of fiscal affairs Frank Curtis to president of a company owned by Allied. A summary of their resources is listed below. The majorities of consumers do not see a perceived value in a pen or pencil and will not be as willing to spend the extra money. The process for Red and purple pens require more resources setup time, etc.
A failed… 2523 Words 10 Pages Classic Airlines Case Study Contents Executive Summary 3 Description of the Situation 4 Identifying the Correct Problem 5 Describe End State Goals 7 Identify Alternatives 8 Evaluate Alternatives 9 Identify and Assess Risk 11 Make the Decision 11 Develop the Decision 12 Evaluate Results 12 Works Cited 14 Executive Summary Classic Airlines is currently facing something of an organizational crisis. Concern for Public Image 4. The Airline serves 240 cities with 2,300 daily flights. What should the managers do to avoid the impact of the possible future crisis that may cause the Telecommunications firm to fail or to be bankrupt? Example of classic we can find in the past because it is something which is happened early. It showed that there is already a good base of customers in Asia for the Luna pen, and it would be detrimental if Global were to lose the product.
It is estimated that it will take 300 hours to crush the grape harvest. How should I allocate my time on this case? Inspection: As a starting point of the investigation we derived the cost price per pen in the traditional income statement format which was currently used by the organization. They require the same basic production technology but can be sold at 3% and 10% premium selling prices. Present a brief summary of the case. Sales Manager Dennis Selmor is just seeing the financial results and is not happy with the numbers.
Therefore, she wants to find out the proper allocation of per unit cost of the product. The professor had argued that overhead should not be viewed as a cost or a burden to be allocated on top of direct labor. First allocate the total expenses in each row to the various activities, based on information in the case. The consumer in the market is willing to pay higher prices for the products for different colors pen. According to the case, he is quite a conservative person, who prefers old-fashioned business techniques. What could Mazda learn from eye-tracking software that would be difficult to learn? In terms of the strategy, the new product does strategically align with its current operations. The flagship products' margins also seem to be dipping which compelled us to review the income statement from an activity-based lens.
The author of this case analysis sites some alternative courses of action to choose the best way on how to solve the problem. A second issue that Pen Co. Product Fit There is a good product to company fit here; working with Guardian would bring many benefits to Classic Knitwear. Home, Clique Pens, stared at the notepad in front of her. Set against the backdrop of World War I, a touching love story quietly blossoms against the odds of circumstance and mismatched personalities. They could invest in more computers to increase the amount of scheduling being done by computers and as a result lower their indirect labour costs. Machine Exp Total Activity Rate Handle Production.
Over the last five years Pen Co. They need to increase their planning and try to adjust their current planning system and organizing. This increase is the rational response, by faculty, to the overweighting of publications in these journals by university promotions and tenure committees. They could invest in more computers to increase the amount of scheduling being done by computers and as a result lower their indirect labour costs. The organization should not be performed by the indirect resource of the organization and it should not link the indirect support with the cost of performing these activities directly to the product for which they were presented the production……………… This is just a sample partial work. Rising costs has been one of the main challenges to Classic Airlines.
If investment of new machinery is not doable for the company, it would be best to try and cut cost, and focus on standard pens for future investments. Accounting scholarship, in particular, has underinvested in research about innovative practices or the emerging accounting issues faced by contemporary organizations Kaplan, 2011 , likely because such research is viewed as unpublishable in top-5 journals. Most people in the plant recalled that not too many years ago the overhead rate was only 200%. Records Maintenance: 1,000 800 180 20 4. Situation Analysis Classic Knitwear, Inc. The ink was inserted into the pens in a semiautomated process.
Twenty years ago, customers were less choosy and they were happy to have a product that is good value for money. Classic Airlines has had a history of success and profitability, but as the competitive market changes and a downturn in the travel industry, management has identified changes that need to be made. But Dempsey had just seen the financial results see Exhibit 1 for the most recent fiscal year and was keenly disappointed. Please place the order on the website to get your own originally done case solution. The information exchange between socially distant groups can now take place without face to face interaction, and the discourse is controlled in the interactive forum rather than subject to the stereotypes and biases face to face interaction may harbor. The sales manager of the company has realized that the sales of the new products are in an increasing trend as well as the customers are willing to pay more money for special colors pens such as Purple and Red.
Jeffrey Donald, the manufacturing manager, was also reflecting on the changed environment at Classic Pen: Five years ago, life was a lot simpler. Villareal, a technical education and skills development supervisor in the Technical Education and Skills Development Authority at the time of his death on October 20, 2002 due to myocardial infarction. Unfortunately, this strategy which otherwise should be driving profitability is now exhibiting an overall decline in profits as per the financial results. Sales Manager Dennis Selmor is just seeing the financial results and is not happy with the numbers. The company manufactures all products in one factory. The addition of new colours is crucial to their survival, but with the current machinery it may not be possible. Therefore, the sales manager of the company introduced the individual colors pens in the product line of the company.
The amount of wine generated from the grapes is dependent each year on a number of climatic and growing factors such as temperature, length of growing season, rootstock and fertilizers used. Then choose a cost driver and calculate the rate per unit of the cost driver. It requires a substantial amount of time for physical changeover of production from one colour pen to another. For the cover page, provide the case name, name of student and date submitted. By exposure to a variety of situations and diverse problems, the student can experience, to some degree, the challenges and dilemmas of the decision maker. The author also shows the advantages and disadvantages of each alternative courses of action he sited.