Danshui Plant No.2 Case Study Essay

955 Words Sep 20th, 2013 4 Pages
Danshui Plant No.2
Case Study

Yuli Tang
Rui Zhang
Due Date: April 9, 2013

1. As we can see from the Exhibit 1, 176,087 Apple iPhone 4’s would have to have been completed for Danshui Plant No.2 to break even.
2. The total expected cost per unit was $205.7 per unit and the actual cost per unit was $211.93 per unit. See Exhibit 2.
3 & 4. The data is showing in the Exhibit 3 & 4.
5. From the data of question 3, the variance of revenue is favorable because Apple increased price of flash memory by $2. However the company didn’t gain profits from the revenue due to the increased price of flash memory provided by Samsung. The variance of flash memory is unfavorable because of two reasons: first reason is the price of each unit
…show more content…
Hence, the total variance of flash memories was unfavorable. The variance of labor is unfavorable, because the wages of labor increased and working hours increased. But the productivity didn’t increase; the efficient of production was low.
6. The company has three main problems: the first problem is that they may unable to complete 200,000 IPhone 4 units in any of the three months they have been working on the contract. The second problem is they cannot hire more workers. The third problem is the company have problem with the Samsung flash memory installation. We have some suggestions for the company to solve these problems. Firstly, Danshui Company should improve their salary policy. We recommend company should motivate workers to produce more efficiently, for instance, they can set a basic salary for workers and offer them bonus if workers complete target. Secondly, the company should provide professional training for labors. So they can work more efficiently. After workers becoming more professional, the company cannot only use less labor hours, but also save more materials. A third suggestion is that Danshui Company should also improve the quality of production supervision. They should hire a more professional supervisor who is familiar with the production process and is able to build a good relationship with labors, so they can work more efficiently and the company can even save more money on materials.

Appendix | Monthly

More about Danshui Plant No.2 Case Study Essay