Tdab Case

Assuming that the company’s goal is to maximize profits, the current cost system is not an appropriate tool for strategic planning. The ambiguity of the overhead costs per product makes it difficult to accurately analyze the cause and effect relationships of changes and/or improvements to specific product line.

The company started off producing 20,000 units of mountain bikes. We did not change the production quantity. Last year our forecast sales were 24,000 when we only sold 19,866; therefore we thought it would be best to leave production at 20,000 bikes. Having excess inventory, we concluded that 20,000 units should be enough considering our quality has not changed and our advertising will not increase the sales dramatically. Although we had the choice to produce as much as 30,000 units, we felt as though we did not have sufficient money to increase production. We were interested in allocating the money towards marketing as opposed to production. We realized that without awareness, no matter how many units we make, sales would be inefficient.

The timing of capacity changes also needs to be taken into consideration to achieve maximum efficenty given that demands of their products varies with seasonal changes. The ability to react to market demand changes quickly will determine manufacturers flexibility in keeping up with these demands. Manufacturers needs facilities to produce, whether warehouses to store its raw materials or finished goods, or manufacturing plants to produce their products. Services facilities are needed by certain manufacturing industries such as consumer electronics to cater for returns. Distribution centres also determine the efficenty of production distribution and un-nesessary inventory holding will result in higher holding cost. Such facilities require large investments and are integral of the manufacturer’s supply chain strategy and thus proper planning is needed when making these decisions regardong the size, location which affect the overall operations. How manufacturers run their productions also determine how successful will they be in terms of productivity and quality levels. Different types of equipment and processes also affect the cost and output of the manufacturing plant. Information systems that flow both upstream and downstream affects the forecasting, planning, inventory and production levels, they must be robust to ensure the manufacturing firm is able to react accordingly to changing demands and variations. In addition to their internal environment,

The week four individual paper addresses the implementation of Activity Based Costing (ABC) by Super Bakery, Inc., a virtual corporation founded by Franco Harris. Specifically, management strategies, the reasoning behind an ABC system, and the alternatives of a job order cost system or a process order cost system are assessed for this enterprise.

While we are performing our analysis on different aspects of the company, we look at the three main types of cost. When we remain devoted to improving our costs, and the faults related, we show our same devotion to our consumers. This is portrayed by the quality of products we put on the shelves. Prevention costs, appraisal costs and Failure costs are areas

The week four individual paper addresses the implementation of Activity Based Costing (ABC) by Super Bakery, Inc., a virtual corporation founded by Franco Harris. Specifically, management strategies, the reasoning behind an ABC system, and the alternatives of a job order cost system or a process order cost system are assessed for this enterprise.

Bob Stetzel, Vice President of Information Technology (IT) at Vermont Teddy Bear (VTB), walked a tranquil path from his car to his Shelburne, Vermont office early one morning in mid-February 2010. The landscape outside his office, and the White Mountains beyond, were blanketed in a coating of fresh snow. Just a few days before, the scene was not tranquil at all; a small army of nearly 2000 temporary employees had descended on the company’s multi-building campus to help process and pack gifts ordered by tens of thousands of customers for delivery to their sweethearts for Valentine’s Day. Bob and his seven person IT organization had worked feverishly behind the scenes, ensuring that the company’s information systems could

One of the best aspects of the way the time-driven ABC system was put into place at Kemps was how efficiently and accurately management determined the main issues with the current cost system and responded with appropriate and relevant solutions. For example, one of the greatest problems the company was facing was that many of its operating costs were spread out equally over a customer base that was growing more diverse and demanding more personalized and varied service, effectively cutting or potentially eliminating entirely Kemps’ profit margins for a product. Therefore,

However, as a new member with a new product, electronic product in North American market, the reputation is also an important attribute. Especially, quick delivery time is a key attribute for this company, due to the demand of quick delivery in all markets. Moreover, the manufacturing process of the new product, electronic product, on which our company will definitely focus, has a lot demands. Such as, technology, innovation and quick delivery time even the ability to make the product be the first one appearing in the market (other company, which is developing the same product, may become our competitive opponents). Especially, technology is predicted to play the most important role in the manufacturing process. On the other hand, the traditional cost system has a lot of limitations. Traditional costing system focuses on the cost reduction and the efficiency, particular the products with relatively few standardized components; Clifton, however, produces a wide range of airplane components. In addition, nonfinancial aspects of

Because the product was leaving the warehouse and getting to stores quicker, I was able to reduce the storage space which was an initial problem so the increase of costs because of it decreased. The stores showed a moderate increase in profit.

We will examine the given data from the case and compare the unit costs from the company’s current costing system (traditional costing) and from activity-based costing. We will also highlight other qualitative data in consideration with the numerical factors that may result to a significant change on our recommendation.

with a number of strategic issues facing a capital-intensive, mature industry. Their product costing system was

Besides, decreasing the production cost is also important as the firm can then lower the price. So the decisions related to change in plant size, process improvement and the training are also important.

Lowering manufacturing cost for reasonable prices is a very crucial factor than needs to take into consideration because it not only reduces the amount of money needs to be invested to reach the company’s goal but it also helps them to invest that money in a department or areas that needs focusing on and it can help strengthened that area without having to put out more than the set amount of money For example, the promotion and advertisement department. Secondly which customers won’t want to pay for quality products with a reasonable prices that even a minimum wage worker will be fortunate to buy and get bargain for their money. By minimizing cost it reduced the chance of Lipton having to increase their prices on products which can run potential customers that wants to try their products. 
 The last and final step is how do Lipton go about ensuring the arrival of the goals they set out to accomplish. In order to do so Researching and Development is very crucial and important because they department in charge of this campaign needs to learn about the customer’s behaviour and what captures their attention whether it be lower product prices, upbeat and colourful

Traditional costing technique known as Conventional Activity Based Costing (CABC) had been used by large scale firms to measure their cost and customer profitability every month. It had been a successful ABC but mainly require a lot of manpower and time. Due to such reasons many companies avoided ABC, others completely ceased it. Contrast to this they implemented a new method of costing as Activity Based Costing(ABC) has originally originated in1980s to solve all the deficiencies with the conventional based costing. ABC uses the Enterprise Resource Planning(ERP) which automatically feeds the data to provide the data reports and customer profitability. Despite ABC is not accepted all over the globe, as it is ranked