ISSN 1940-204X SEWMEX: Short-Term Profit Planning in an International Setting Gus Gordon University of Texas at Tyler David E. Stout Youngstown State University Sarah Hartzog, Student Former Student, Milsaps College Matt Lusty, Student Former Student, University of Texas at Tyler In addition to SEWMEX, SEW has several other factories located in the southeastern part of the U.S. One of the factories (located in southeastern Mississippi) also serves as a distribution center and central warehouse where finished goods from all the other factories are stored and ultimately shipped. From this distribution center, SEW supplies customers in all 50 states and Canada. The controller of SEW recently resigned unexpectedly after a disagreement …show more content…
The controller had explained to you that SAMs are based on production engineers’ estimates of time needed to perform each sewing operation and therefore the total time required to complete a particular style garment. The estimates are derived from time-and-motion (i.e., industrial engineering) studies and take into account a number of variables, including the speed of each type of sewing machine required for a specific operation, the education/training of each operator, and existing technology used by the assembly workers at SEWMEX. Pants Shirts Jackets Other $ 7.00 $ 6.00 $25.00 $ 3.00 (Notes: The contract between SEW and SEWMEX explicitly states that SEW will pay SEWMEX in U.S. dollars, USD. Also, the above selling prices per unit represent averages within each product line, given an assumed mix of garments within each line.) BUDGETED SELLING PRICES In preparing you for this project, the president of SEW provided you with the per-unit selling price data presented in Table 1.3 The prices listed in Table 1 are expressed in U.S. dollars (USD) and are based on SEW’s transfer price4 determination for each garment and an initial sales mix of products obtained from the company’s marketing department. On the basis of discussions with the company’s audit firm, the selling prices represented in Table 1 were deemed acceptable for U.S. income tax purposes. Further, these prices are assumed to be valid within the shortterm planning horizon associated with
3- As we can see the company would loss 0.52 cent per 1 kg if it decides to sell at 6.85 price and allocates the fixed expenses at 1.20 per 1 kg.
If a company decides to help differentiate its branded footwear by offering buyers 500 models/styles to choose from, then company managers should evaluate the merits of trying to reduce the $14 million annual costs for production run setup costs associated with producing 500 models/styles at each plant by
Beginning a new business venture sounds like a easy task. All you need is a great idea, opportunity to select your team so you can begin to make some moves and find a few investors to invest in to this dream you have. Before you know it you are making a profit and moving onto a new location. Sounds easy but there is much more that goes into starting a new business than most people may know. To accomplish this, the business has to satisfy several objectives that exclusively add to the business. This paper will narrate some of the particulars of previous works from week two, three, and four with information such as the business and
| Use this information for questions that refer to the World Tennis Ball (WTB) Company case.
Sales (in $ 1000s)= 16,020.78118 + 149.15175 * %spanishsp – 44.16538 * %dryers – 112.48017 * %freezer – 79.84655 * %sch0-8 + 9,393.82229 * comtype1 + 3,802.26442 * comtype2 – 3,123.24462 * comtype7
14. A decision to work closely with a limited number of suppliers for the purpose of ensuring that the proper materials are available at the optimal time is an example of:
Rowe, Mark, Meryle Holdredge, Chip Bates, and Sally Martin. "Furman University: Thaddeus Stevens Papers On-line." Furman: Thaddeus Stevens Papers. Accessed October 23, 2017.
In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.
The sales budget is prepared by multiplying the expected unit sales volume for each product by its anticipated unit-selling price. As reflected in Exhibit A noted below and included in the overall Peyton Approved budget worksheet included in Appendix A, Peyton Approved expects sales volume to be 18000, 22000 and 20000 units in the month of July, August and September respectively. The budgeted sales in August exceeded July's sales units by 4000 units, however, sales declined in September by 2000 units from August. Peyten Approved budgeted sales price per units for the quarter was based on a sales price of $18 per unit. Thus, budgeted total dollars per month are
In production costs variance chart above, Direct labor price variance(sum of direct labor variances of round, square and oval) valued at $14,913, and Oval production cost variance valued at $8,381.
Pricing is a relevant issue in procurement at all levels. Individuals purchasing the commodities of an organization should receive clarity on pricing. There is confusion in this
A result on the next page shows that at sales price of $21.50, the sales quantity rises to 1,140,085 units and net profit turns to positive for the first time. Besides, if a company continues to reduce the price further, at the point of $15.50, it is where the company’s profit on product 101 is in the highest position as it gives the net profit of $3,901,908.
Now that the initial startup phase of our company is complete, our team of Analysts has determined what we have deemed reasonable costs, considering that our definition of “reasonable” aligns with yours. In order to defend our stance on what we feel is reasonable, we have considered the nature of costs, such as air travel for business meetings and the use of our high quality materials, by researching the market for affordable, high-quality materials and have put standards in place to keep air travel valid for these government contracts. With the understanding that although the nature of the cost may be considered acceptable, the amount of the cost may not meet standards when it comes to costs defined as “reasonable” (Murphy, John Edward; Guide to Contract Pricing, pg. 47). With this in mind, we continue to research the market to find adequate material at a much lower cost. We have used this data to create what we feel is a cost that would not and should not exceed what any prudent person would pay in a competitive business environment. We are aware of the competition and have made it a strong incentive of ours to save on costs for the items that we are providing to you. Allowability of our costs is guided by the 52 generally applicable cost principles that are based on specific laws and policies (Murphy, John Edward; Guide to Contract
For the customized products: we need to calculate the total amount of cost of ordering, production and delivery. We estimate the price of these products should be twice higher than our usual products. (I just guess this price thing, you guys decide it….)
1. Sales forecast – (at $ 30 retail price with the assumption of $15 whole sale price)