Five-Star Case Study Essay

613 Words Dec 23rd, 2015 3 Pages
7 – 2 Five Star Tools
Managerial Accounting
BUS 5431
Fall 2015
December 6, 2015

Executive Summary

Five Star Tools is a family controlled manufacturing organization that makes chisels and saws utilized by diamond setters. They deliver the apparatuses using a 3 stage process. In the previous two years the organization has encountered critical development and now and again has not possessed the capacity to meet request due dates. Administration has acknowledged that they have a bottleneck in the coating and sharpening procedure.
Overview

The president of Five Star Tools, Maxfield Turner chose to meet with the VP of Marketing Betty Spence to address the missed due dates and production capacity. In their meeting Betty Spence
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Subordinate Everything Else to Constraint
In the event that administration could slacken requirement enough to pick up an extra hour of manufacturing time, they would pick up an extra $1,250 of profit for Model C210 and $537.50 for Model D400.

Recommended Resolutions
D. Break the Constraint
The management can utilize the extra assessment station to extricate the limitation in the coating and sharpening division. This activity will create an extra 240 hours for every year of extra production time in the coating and sharpening division. This will help them to generate an extra $600 in benefit per unit or $216,000 every year. Contribution margin | $ 300 | Coating and Sharpening Time | 0.5 | | $ 600.00 |

Conclusion
Amid Maxfield Turner meeting one month from now with Betty Spence, he should present to her his discoveries and recommendations on decreasing the limitation in the coating and
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